ValueAct’s reputation gamble in Japan pays off 23 Apr 2024 The U.S. fund prefers to chide companies in private but publicly lost its temper last year with Seven & i. Now the $34 bln owner of the 7-Eleven convenience outlet is spinning out its superstores. It vindicates an unusual move for ValueAct, though the financial reward is muted.
Buyout barons salivate at Toshiba job cuts 22 Apr 2024 They extract world-beating returns from deals in Japan often without reducing staff because lifetime employment is the norm. Now the private equity-owned conglomerate may cut 5,000 roles. A tight labour market helps, but if layoffs catch on acquirors could both pay and earn more.
An activist nudge is all it takes in Japan Inc 15 Apr 2024 Shares in the country's top property group, $31 bln Mitsui Fudosan, jumped 8% after it pledged to lift returns and halve strategic shareholdings. It partly answers Elliott's call for change, but peer pressure is at work, too. Pushy foreign investors can only claim some credit.
TSMC’s most complex engineering task is itself 3 Apr 2024 The $625 bln chipmaker has built a monopoly in advanced semiconductors by staying in Taiwan. Now it’s expanding abroad, spurred by subsidies and US-China tensions. Despite higher costs, it can generate decent returns. The bigger challenge will be keeping its technological edge.
Central banks’ noise helps dollar – and Joe Biden 28 Mar 2024 In February, traders’ hopes of rate cuts by the Federal Reserve sent the currency lower. But it has risen 1.8% in March, partly due to policymakers’ mixed messages. Until the fog clears, the greenback will rule forex markets. That curbs US inflation and may benefit the president.
Japanese investors becoming the life of the party 21 Mar 2024 ValueAct, Elliott and Berkshire Hathaway have deployed some $16 bln to uncover value in Tokyo-listed stocks. They’re receiving warmer welcomes than raider T. Boone Pickens did in 1989. Even better, the US trio’s success is helping inspire local funds to sustain the momentum.
US Steel tug-of-war threatens to pull it apart 19 Mar 2024 Cleveland-Cliffs has put its rival in a bind, rallying political and labor opposition to a $14 bln agreed sale to Japan’s Nippon while pushing its own questionable takeover bid. No deal at all would be bad news for the target’s union workers. A carve-up might be inevitable.
Japan’s first step to new normal is the easiest 19 Mar 2024 The central bank raised interest rates, ending 26 years of unconventional stimulus. Policymakers hinted they will keep borrowing costs steady for a while but the pressure to curb inflation, rather than unleash its virtues, may rise fast. The hard work for the country starts now.
Joe Biden out-MAGAs Donald Trump 14 Mar 2024 The US president is siding with union workers who oppose a US Steel takeover by Japan’s Nippon. He also said he would sign a bill forcing TikTok’s Chinese owner to sell the popular app or see it banned. The ad hoc approach to national security concerns sets a dangerous precedent.
Japan’s rate shift will hit zombie firms hardest 14 Mar 2024 The central bank could end an era of negative borrowing costs as early as next week. In this Viewsroom podcast, Breakingviews columnists argue that large companies are ready for the tightening, but many struggling small businesses could hit the wall even if policymakers go slow.
Japan faces a reckoning with its zombie companies 5 Mar 2024 Big firms are ready for the onset of higher wages and the end of negative rates. Smaller rivals, which employ 60% of workers, risk being crushed. One in six already struggles to cover interest payments. If too many fail, they can derail confidence and the economic recovery.
Europe shares’ granola rush will become thin gruel 26 Feb 2024 The STOXX 600 Index has hit a record, but local funds are seeing outflows. As in the US a small bunch of companies – the so-called GRANOLAS group – are behind the good news. But in the Old Continent they’re more dependent on weak economic growth rather than the AI revolution.
Japan loses a big title, and perhaps its way 15 Feb 2024 A surprise technical recession means the country is no longer the world’s third-largest economy. Even more unnerving is a slew of weak data that make it harder for the central bank to end an era of ultra-low interest rates. Companies’ wage negotiations will be a deciding factor.
Japan’s overseas tech deal crosses financial wires 15 Feb 2024 Electronics design outfit Altium has a smart product and is growing at a decent pace. That doesn't justify Renesas paying $6 bln for the Australian-listed company. Unless the buyer can supercharge revenue, it's another Japanese outbound deal that will generate meagre returns.
Toyota hitches a ride with the zeitgeist 7 Feb 2024 The car company’s bet on a slower transition is playing well. Shares hit a record high as third-quarter earnings grew 86% and sales of hybrids rose nearly 50%. Even a slowdown in China didn’t dampen the mood as expectations for the world’s largest auto market are fast fading.
Japan is the new Disneyland of global activism 7 Feb 2024 Elliott wants $24 bln property giant Mitsui Fudosan to offload its stake in the Tokyo theme park operator and buy back shares. Like many of his peers, Mitsui's CEO is a convert to shareholder religion. The new challenge for activists is getting company bosses to be more devout.
Nomura offers tantalising glimpse at mediocrity 1 Feb 2024 Japan’s vibrant market helped the investment bank churn out quarterly earnings in line with its 2025 target. Boss Kentaro Okuda’s job now is not just to sustain the performance but to improve the ho-hum 6.2% return on equity that came with it. History is not on his side.
US Steel calibrates depth of trustbuster discounts 24 Jan 2024 Before Nippon prevailed, Cleveland-Cliffs fought hard to seal a deal, new documents show. Even $1.7 bln of synergy value and a chunky $1.5 bln break fee couldn’t sway the target, however. It’s a revealing portal into how competition authorities are altering merger decisions.
Sony enters a painful new M&A season in India 23 Jan 2024 The Japanese giant is ditching the agreed union of its Indian unit with $3 bln broadcaster Zee. Sony dodges a difficult partner but it will prolong the slugfest in the country's cutthroat entertainment industry. The plot could thicken and disrupt rival Disney's dealmaking too.
Capital Calls: Greek airport IPO 16 Jan 2024 Concise views on global finance: State-backed Athens International Airport may be able to fetch a 3 bln euro valuation in a planned February listing.