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Friday, 06 March 2015

BREAKINGVIEWS

A staff member counts Renminbi banknotes at a branch of Bank of China in Changzhi

Chinese FX intervention could be due a comeback

06 March 2015

For over a decade a weak yuan brought in export revenues. Then a rising currency attracted investment. The falling exchange rate helps the former but puts the latter in jeopardy. In order to avoid a financial crisis, stronger is probably better, even it means more meddling.

Lenovo CEO Yang Yuanqing attends a news conference in Sao Paulo September 5, 2012.

Lenovo smartphone market grab risks backfiring

06 March 2015

The Chinese group is planning to launch a new mobile brand in China just months after completing its $2.9 bln Motorola takeover. Juggling separate brands may help fend off domestic upstarts like Xiaomi. But with margins already razor-thin, Lenovo is in danger of overstretching.

A screen displays the share price for pharmaceutical maker AbbVie on the floor of the New York Stock Exchange July 18, 2014

AbbVie CEO may have overpaid again in $21 bln deal

05 March 2015

Richard Gonzalez, the pharma firm’s boss, shelled out $1.6 bln last year to get out of a hard-won bid for Shire. Now he has come out on top in an intensely competitive biotech auction. AbbVie may get a blockbuster drug, but at a high cost: It must share profits with rival J&J.

Etsy logo

Etsy knits up Brooklynesque facsimile of an IPO

05 March 2015

EBay’s artsy cousin promises to set aside stock for vendors, finance a non-profit, eschew guidance and “keep it real, always.” But the deal’s artisanal accounting, a staggered board, poison pill and wide discretion to issue super-voting stock is pure Silicon Valley greed.

Employees from the Continental tyre company of Clairoix, northern France stack tyres as they demonstrate in the Continental plant of Sarreguemines, Eastern France.

Auto industry shifts lift Continental

05 March 2015

The world’s largest tyre and car-parts maker has a bullish 2020 outlook. Suppliers stand to benefit greatly from the auto industry’s technological shifts. Yet investors should stay sober. Conti’s shares already price in the upside. And its dividend policy remains thrifty.

China

China's lower growth target is missed opportunity

05 March 2015

Premier Li Keqiang says GDP will grow about 7 pct this year. Though the lack of precision helps, the goal may still force the government into short-term stimulus or fudging the numbers. For all its progress, China is still not ready to scrap its big, reassuring objective.

The BlackRock logo is seen outside of its offices in New York January 18, 2012.

BlackRock should embrace its pushy tendencies

04 March 2015

Larry Fink, boss of the $4.7 trln asset manager, generally opposes activist investing. At the same time, BlackRock is finding new ways to needle corporate boards by, for example, leaning on long-tenured directors. The quiet approach can work, but it may be time to speak up.

Wall St.

Fed stress tests should induce less anxiety

05 March 2015

All 31 lenders passed phase one, imagining what might happen to their capital in a deep recession. Last year, Citigroup, BofA and others stumbled in round two. Experience and better guidance from regulators mean a fail this year could be especially ugly for bank chieftains.

Barclays

EU bonus policy becomes a comedy of errors

05 March 2015

Capping variable compensation makes scant sense for bankers; it makes even less sense for asset managers. Doing so, as European authorities are now proposing, will do little for stability but push up compliance costs. The final irony is EU lawmakers didn’t even want it. 

People enter and exit the AVIVA headquarters building in Dublin.

Aviva’s dividend and future get more sustainable

05 March 2015

The UK insurer’s 2014 results showed rising excess cash from operations. That’s reassuring, given tricky times for the sector and a 21 pct dividend hike. While the integration of Friends Life is a risk, Aviva doesn’t look to be doing the deal to cover up operating weakness. 

Carlos Slim

Carlos Slim buys Spanish real estate on the cheap

05 March 2015

The Mexican tycoon bought a 25 pct stake in property firm Realia at a discount and is eyeing a takeover. He is also the biggest shareholder of builder FCC, which in turn owns major stakes in Realia and Cementos Portland. Slim effectively controls all three. Minorities beware. 

JD.com tries Alibaba's route to e-commerce profit

05 March 2015

Transactions that match buyers with retailers on the Chinese group’s website grew 220 pct in the fourth quarter, far outstripping growth in direct sales. Acting as a middleman, like larger rival Alibaba, may offer better margins. Earnings are still absent, but look less elusive.

Singer-songwriter Bruno Mars (C) accepts the award for Song of the Year for at the 29th Annual ASCAP Pop Music Awards in Hollywood, California April 18, 2012.

Now (finally) playing: royalties for online music

04 March 2015

The oldest U.S. artists’ collective took in over $1 bln for the first time in 2014, much of it for songs streamed over the internet. That shouldn’t stop Congress or courts from revamping a system that underpays musicians. But it suggests such groups can survive in a Spotify era.

Videos

Columns

Edward Hadas

Edward Hadas: Negative rates and postmodern money

05 March 2015

Investors now pay Germany to take their money for five years. It’s a bizarre result of today’s fluid understanding of money, in which notes and coins are the real aberrations. Postmodern finance might work, but it’s risky, high-handed and not fair to savers.

Rob Cox

Rob Cox: Silicon Valley's boom-boom room moment

03 March 2015

These days the talk of the geek enclave isn’t the latest Mary Meeker report or mega-IPO but complex legal complaints alleging naughty behavior by leading venture capitalists. The lawsuits are the latest reminder that the tech industry’s moral exceptionalism is undeserved.

Features

A Google self-driving vehicle is parked at the Computer History Museum after a presentation in Mountain View, California May 13, 2014.

Tech drive strips old-school carmakers of clout

02 March 2015

Apple is the latest to take an interest. From Tesla to Google, the shift to connected, self-driving vehicles may take a while, but it could shake up everything from systems to materials to car usage. The winners may be able to rev up returns far higher than current performance.

Peter Thal Larsen

Review: Building HSBC's sprawling, flawed empire

27 February 2015

The Hong Kong bank grew into one of the world’s biggest financial institutions. But poor results and a furore over Swiss tax make for an unhappy 150th anniversary. A new history shows how hands-off management and breakneck M&A under former chairman John Bond are partly to blame.