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Wednesday, 02 September 2015

BREAKINGVIEWS

Volkswagen Chief Executive Martin Winterkorn

VW steers towards needed boardroom harmony

02 September 2015

Volkswagen is extending CEO Martin Winterkorn’s term to 2018, ruling him out as next chairman. This leaves room for an independent, external candidate to replace fallen patriarch Ferdinand Piech. VW’s flawed governance might then shift up a gear. 

A woman walks with a Louis Vuitton shopping bag as she leaves a Louis Vuitton store in Paris

LVMH's bite out of Apple is digital coming-of-age

02 September 2015

The French luxury group has poached a top Apple music executive to head its online operations. It’s a significant move in a sector that has been wary of the net. It also cranks up the heat on the sector’s e-commerce leader Burberry and recently merged Yoox/Net-a-Porter. 

Indian Prime Minister Narendra Modi (R) listens to Finance Minister Arun Jaitley during the Global Business Summit in New Delhi January 16, 2015.REUTERS/Anindito Mukherjee

India beats timely retreat from fiscal tyranny

02 September 2015

The finance minister has retracted a flawed plan to tax foreign fund managers’ past earnings. Jittery global markets may have hastened the truce. Settling similar disputes with Vodafone and Cairn would show the government is belatedly keeping its promise to end “tax terrorism”.

Netflix logo

Netflix places $5 bln bet on exclusivity

01 September 2015

The online video company is ditching content provider Epix. That’s bad news for armchair watchers of big movies like “Hunger Games.” Instead, Netflix is upping its spending on shows no one else has. As Apple, Amazon and others join the streaming wars, it’s a smart move.

The logo of Poland's Bank BPH, owned by General Electric (GE), is seen on their headquarters in Warsaw, Poland August 25, 2015.

Poland makes bank investors political playthings

01 September 2015

Warsaw could force lenders to cough up $5.9 bln to relieve borrowers with Swiss franc mortgages not obviously in distress. With elections looming, the party ahead in the polls wants to tax banks’ balance sheets. It may be pure politics, but the danger is that foreign money flees.

Focus Media logo

Focus Media relisting defies China's market rout

01 September 2015

The advertising group is trying to list again in Shenzhen after a previous attempt in June fell through. But despite the stock market slump, Focus Media’s $7.2 bln valuation is unchanged. Other U.S.-listed companies eyeing a return to the mainland may need to be more realistic.

40 percent rule

Silicon Valley rule of thumb points right way

31 August 2015

In a land that fetishizes revenue growth over profitability, there’s a new sanity check for software firms to see if the two rates add up to at least 40 pct. A Breakingviews analysis suggests it can be a useful guideline. Investors should just be wary of extrapolating too much.

A man walks past workers installing the new logo of Portuguese Novo Banco (New Bank) at their Lisbon office September 22, 2014. REUTERS/Hugo Correia

Novo Banco has issues - Chinese owner or not

02 September 2015

Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills. 

David Einhorn, founder and president of Greenlight Capital, speaks during the Sohn Investment Conference in New York May 4, 2015.

Hedge fund wobbles hand ammunition to fee fighters

01 September 2015

Big names from Greenlight to Pershing to Third Point have taken a pounding from recent market turmoil. It’s just a month’s bad performance. But if high-priced managers can’t provide a hedge to regular investments, it lends extra weight to Calpers and others who are ditching them.

Migrants sit in a train to Austria at a train station in Budapest, Hungary, August 31, 2015.

Migration crisis echoes age-old test of finance

01 September 2015

The flow of desperate people to Europe has a financial-world parallel. For companies, high returns attract new entrants who threaten incumbents’ comfortable state. The options for EU leaders are similar too: shut out competition, or find new, better ways to create profit.

A vintage camping caravan that was converted into a hotel room at the Base Camp Bonn Young Hostel.

Electra's 1 bln stg caravan deal gives it a break

01 September 2015

The UK private equity fund is merging its Park Resorts caravan business with Parkdean, a rival. The terms suggest it has more than doubled its money in around three years. That will help Electra if Sherborne, its uppity 29 percent shareholder, raises new complaints.

A security personnel stands near the logo of Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) during an investor conference in Taipei, July 16, 2014.

Taiwan chipmaker's woes mirror economic challenge

01 September 2015

TSMC faces tepid global demand and a slowdown in China, the world’s largest smartphone market. The $100 billion group is also losing market share to rival Samsung. The problems facing Taiwan’s largest company are shared by the island’s tech- and export-dependent economy.

Federal Reserve Vice Chairman Stanley Fischer speaks in Jackson Hole, Wyoming August 28, 2015.

Fed dilemma is mostly good news

31 August 2015

Vice Chair Stanley Fischer reckons inflation is only temporarily subdued. Along with the BoE’s Mark Carney, he also downplayed China’s deceleration. The Fed’s doves, meanwhile, remain wary of raising interest rates. The split is evidence the U.S. economy is finally mending.

Videos

E-book

A Tamer Lion: Singapore at 50

The city-state defied all expectations during its first five decades. Now it faces fresh challenges. As celebrations fade, this collection of views examines Singapore’s prospects including the outlook for its workforce, property market, role as a finance hub, and water supply.

Columns

Hugo Dixon

Hugo Dixon: Greek election may reopen can of worms

31 August 2015

Given that no party is likely to emerge from next month’s vote with a majority, it may be hard to form a strong government that can implement the country’s new bailout deal. There’s even a risk that there will be yet more elections. That could tip Greece back into crisis.

Rob Cox

Rob Cox: Double-duty CEOs are a worrisome trend

27 August 2015

Fiat boss Sergio Marchionne may don another hat to run Ferrari. Like Jack Dorsey and Elon Musk, however, he’s only human. Investors in public companies, especially young or challenged ones, require full attention from a leader. That’s all but impossible when he’s running two.

Features

Edward Chancellor

Review: Ben Bernanke and a global monetary plague

28 August 2015

Ever since the collapse of Lehman Brothers, the Federal Reserve has engaged in financial experimentation that has delivered the weakest rebound on record while spreading deleterious effects around the globe that author Brendan Brown, in a forthcoming book, likens to a plague.