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Monday, 06 July 2015

BREAKINGVIEWS

A Wall Street subway stop sign is seen in New York October 10, 2008.

Bank investors put too much faith in rate hikes

06 July 2015

Shares in U.S. lenders have been on a roll, but not because business is booming. The market is hoping rising interest rates will be a cure-all. That ignores risks from deposit flight to investment and trading snafus that could be exacerbated by years of pent-up frustration.

Greek Prime Minister Alexis Tsipras delivers a speech at an anti-austerity rally in Syntagma Square in Athens, Greece, July 3, 2015.

Euro zone markets and politics point to Greek exit

06 July 2015

European ministers could keep Greece in the single currency despite the country’s “No” vote. German Chancellor Angela Merkel has the domestic power to do a deal. Yet other member states have an incentive to punish populism. Calm peripheral markets are another reason to be tough.

Journalists work next to the Rolls Royce engine of an Airbus A350 on display at the Singapore Airshow February 11, 2014.

Rolls-Royce’s new pilot puts safety first

06 July 2015

The aero-engine maker’s brand new chief has halted a share buyback programme. The stock slid 9 pct. The decison flags growing cashflow woes but safeguards a crucial investment grade rating. Rolls-Royce’s Warren East is acting with the kind of boldness the company requires. 

Malaysia's Prime Minister Najib Razak is pictured after speaking to the media at a mosque outside Kuala Lumpur, Malaysia, July 5, 2015. Najib said on Sunday that he had referred "wild allegations" against him to lawyers and would decide any legal steps in

Graft crisis exposes Malaysia's macro weakness

06 July 2015

Prime Minister Najib Razak denies stealing state funds, and says his predecessor is trying to oust him. There’s little room to cut rates and the ringgit is plumbing 16-year lows. With growth slowing, exports falling, and Greece rocking world markets, Kuala Lumpur is in a bind.

A pharmacist counts pills in a pharmacy in Toronto

Aetna's bitter Humana pill is good long-term care

03 July 2015

The two U.S. healthcare insurers struck a $37 bln deal ahead of rivals in a race to consolidate an industry rapidly reshaping under Obamacare. Cost savings will fall short of the premium Aetna is offering. It may be a price worth paying to be first in line with trustbusters.

A leaflet which reads "Uber go home" is seen on a taxi as striking French taxi drivers block the traffic on the Paris ring road during a national protest against car-sharing service Uber, in Paris, France, June 25, 2015.

Uber's French lesson: disruption has limits

03 July 2015

The upstart taxi app has suspended its service in France after a fortnight in which it was the target of violence. Two executives were also detained. Uber’s truculent approach has driven growth. But agents of renewal sometimes have to work with the status quo to change it.

Lei Jun, founder and CEO of China's mobile company Xiaomi, shows the new features at a launch ceremony of Xiaomi Phone 4, in Beijing, July 22, 2014.

China pours cold water on Xiaomi's growth

03 July 2015

Falling sales over the past six months come as a nasty shock from a handset maker that commanded a $45 bln valuation just months ago. Xiaomi is grappling with a slowing home market and competitors catching up. China’s tech prodigy will have to look elsewhere for opportunities.

"No" supporters wave Greek flags by the parliament in Athens, Greece July 5, 2015.

What does that Greek "No" mean, again?

06 July 2015

The referendum question was as unclear as the consequences of each answer. A solid majority backed the government’s position against a deal with European creditors – but the deal wasn’t really on the table. Whatever does happen, it’s a poor electoral example for others to follow.

Chinese shares still look overvalued

06 July 2015

Mainland authorities are taking ever-bolder steps to prop up stocks which have dropped almost 30 pct in three weeks. Yet earnings growth is slowing and valuations are still high when compared with other markets. If fundamentals matter, Chinese equities have further to fall.

A woman exits a voting booth at a polling station in Thessaloniki, Greece July 5, 2015

Greek "No" vote means ECB can no longer sit on fence

05 July 2015

A convincing anti-euro zone vote means the European Central Bank must decide whether to cut the Greek banks off from crisis loans, risking financial meltdown. In theory the ECB may be able to keep the sector going while the dust settles. But that may be politically impossible.

Greek Prime Minister Alexis Tsipras

Tsipras departure could unlock Greek debt relief

03 July 2015

European creditors are wary of writing off Athens’ debts because it could set a precedent. Yet if Prime Minister Alexis Tsipras resigns after the referendum, a deal should be doable. Few politicians would follow his path of capital controls, economic strife and career implosion. 

A mill production supervisor samples some potash in the process of being refined.

Potash Corp may have to go too far to get K+S

03 July 2015

The Canadian fertiliser giant is willing to bid $10.5 bln for its German peer. It will need to improve its offer and give credible job guarantees to win over the target. But these concessions could become contradictory. A higher price implies Potash will need bigger cost cuts.

Guangzhou Evergrande's Zhang Linpeng (L) fights for the ball with Bayern Munich's Javier Martinez during their FIFA Club World Cup soccer match at Agadir Stadium in Agadir December 17, 2013.

Alibaba kicks China’s new tech board to big league

03 July 2015

The e-commerce group’s soccer club will list on the “New Third Board”, an upstart exchange with $200 bln of companies that could be China’s answer to Nasdaq. It’s a welcome source of capital for start-ups, but a lack of oversight means investments are only for the brave.

Videos

Columns

Hugo Dixon

Hugo Dixon: Blame game is spur for any Greek talks

06 July 2015

Athens and its euro zone creditors may restart negotiations in the next few days. But the gap between them is huge. The protagonists may go through the motions to show they have tried rather than because they expect a deal will be clinched.

Rob Cox

Rob Cox: Uber gets a pass on its Wall Street habit

30 June 2015

Big banks break rules and pay fines. Traditionally it’s just a cost of doing business. Uber, meanwhile, pays fines when drivers violate regulations that stand in the way of its business model. Nowadays banks attract outrage, but Uber is often forgiven in the name of disruption.

Features

Andy Mukherjee

Fear all working robots, not just big bionic arms

01 July 2015

SoftBank’s Masayoshi Son says automatons may outnumber humans in 30 years. It sounds far-fetched. But robots are 80 percent cheaper now than in 1990, and getting lighter and safer for people to use. That makes them a big risk to many of the world’s 6 billion future workers.

John Foley

Rising China: a required reading list

26 June 2015

China has towering international influence and a huge population. It will soon be the world’s largest economy too. But it’s hard to know what makes the People’s Republic tick. Enter the Breakingviews required reading list, eight works agreeably free of “dragon” in the title.