BREAKINGVIEWS

UK government turmoil hardens Brexit dilemma

15 November 2018

Two cabinet ministers have quit, weakening Prime Minister Theresa May and reducing the already-slim chances that parliament will support her deal to leave the European Union. That makes the alternatives of a painful and chaotic Brexit, or a second referendum, more likely.

Aston Martin faces winding road to IPO promises

15 November 2018READY SOON

The luxury-car maker’s third-quarter sales almost doubled from a year earlier, but its hoped-for 30 pct EBITDA margin remains distant. The risk of a chaotic Brexit that would hurt production and sales is an added concern. The shares, down a fifth since listing, will languish.

China’s impact investing is an expat project

15 November 2018

Global institutions want to extend ESG criteria to the PRC. But domestic share owners simply expect returns. Meanwhile, reliable information is scarce, investors and companies talk past each other, and there are other governance priorities. For now it’s looking like a luxury.

Pharma upset derails remake of Samsung’s heir

15 November 2018

Jay Y. Lee championed the $20 bln Samsung BioLogics as a new engine of growth at the South Korean conglomerate. Now the arm faces delisting for breaking accounting rules ahead of its IPO. Such a punishment would be harsh but also fit with Seoul’s new resolve to rein in tycoons.

Chinese phenom Pinduoduo has some explaining to do

15 November 2018

The $19 bln favoured e-commerce site for frugal “aunties from Wuhan” is inflating its top line and understating its costs, alleges short-seller Blue Orca. If true, the charges are damning and threaten PDD’s superlative as the fastest-growing internet seller on the planet.

Private equity battens on the Asian state

15 November 2018

Australia’s Royal Commission, a P2P lending crackdown in China and a Korean tax overhaul were touted as opportunities at Hong Kong’s PE powwow this week. The industry usually leans on banks to find targets, but a surfeit of dry powder has it hoping governments can create deals.

PG&E woes show climate is clear and present danger

14 November 2018

The California utility may be to blame for the wildfire that’s claimed 48 lives. Its value has halved and it may run out of cash. The planet’s warming is already worsening fires, floods, and water scarcity. Yet most investors and companies still treat it as a longer-term risk.

Oil forecasting goes from tough to pointless

14 November 2018

In recent months crude has hit $86 a barrel, fallen to $65, and is now rising again. Oil prices drive other markets, but predicting them can be a waste of time. Changing demand outlooks, Saudi turmoil and Trump are only the most volatile of a series of uncertainties.

Goldman has half a defense in 1MDB mess

14 November 2018

Two former executives accused in the Malaysian corruption scheme openly lied to the bank, U.S. authorities say. Rival firms have found leniency in similar cases. But an indictment also cites a culture that favored deals over compliance. That could warrant a deferred prosecution.

Snap shareholders deserve little sympathy

14 November 2018

Some are suing the social-media firm for misleading them before its IPO about competition from Instagram. Now U.S. watchdogs are conducting a probe. Bad conduct deserves punishment. But investors willingly bought stock with no rights in an immature company with lots of rivals.

Tencent armour shines in battle with Beijing

14 November 2018

The $330 bln tech titan beat earnings expectations despite a regulatory crackdown on its videogames business. Investment gains helped, but strength in advertising and mobile services also shielded profitability. Now boss Pony Ma has a sword to swing at rivals like NetEase.

Brexit compromise confirms Britain’s hard choices

14 November 2018

Prime Minister Theresa May’s draft deal would bind the UK to the EU without the benefits of membership. Even if her cabinet backs it, parliament may not. Opponents have two options: crash out of the bloc next March, or call another referendum. The fight will only get more bitter.

Fluke contraction is least of German economic ills

14 November 2018

GDP shrank in the third quarter. One-offs were to blame so a quick rebound is likely. The real problems, like insufficient digital investment or too few skilled workers, are harder to fix. Chancellor Angela Merkel did too little and will drop the mess in her successor’s lap.