BREAKINGVIEWS

Pepsi’s fizzy water deal may have flat aftertaste

20 August 2018

As CEO Indra Nooyi departs, the drinks giant is buying SodaStream for $3.2 bln. Diversifying into the high-growth carbonated water market has strategic logic, and Pepsi has cash. But new boss Ramon Laguarta will need sparkling revenue growth to make a decent return.

Venezuela’s Maduro rearranges economy’s deckchairs

20 August 2018

The president’s plan to devalue the bolivar, peg it to an obscure state-backed cryptocurrency and raise the minimum wage will widen the already gaping hole in the OPEC member’s finances. Promised fuel-price hikes, if botched, could send his socialist government to the seabed.

Peloton’s funding breakout may not escape the pack

20 August 2018

The stationary-bike company may hit a $4.2 bln valuation in its latest round as it prepares to go public. Backers fancy it the Netflix of fitness, but investors favor firms that cater to the masses. Weekend warriors may not keep this outfit out of the peloton of tech wannabes.

BMW has good reason to take driver seat in China

20 August 2018

The German auto group may raise its stake in its Chinese JV, after the state moved to scrap foreign ownership rules. Spending $3.6 bln now would boost margins and give it a greater share of profit from China-made cars. That’s particularly valuable given U.S. trade tensions.

Italy’s Atlantia hardball comes at a price

20 August 2018

The government may strip the group of a contract to manage Italy’s motorways after the Genoa disaster. Tough action is needed, but the move could cripple Atlantia and looks premature. The stock plunge is a reminder of why investors need to apply a bigger discount to local assets.

Saudi’s investment fund: the view from 2023

20 August 2018

The kingdom wants to expand the assets of its Public Investment Fund by 60 percent by 2020 as it diversifies away from oil. That involves it taking some big, risky bets. Breakingviews imagines the letter its chief executive will write five years hence.

Mulberry hits every luxury branch on the way down

20 August 2018

Almost three-quarter of the bagmaker’s sales are in the tough UK market. That, and a costly push into Asia amid the threat of a China-U.S. trade war, explains why Mulberry’s shares are down 60 pct this year. A fresh hit from House of Fraser’s demise is par for the course.

Malaysia’s China reset imagines Byte and Road

20 August 2018

After months of fighting talk, Prime Minister Mahathir Mohamad is striking a softer tone. His PRC visit began in Alibaba's hometown of Hangzhou and included a new-energy deal with carmaker Geely. That suggests an effort to extract tech aid in exchange for infrastructure projects.

Even a cleaner China is tempted by old playbook

20 August 2018

Beijing is cracking down on rating agency Dagong over its cosy relationships, in a rare rebuke. Yet it is also telling banks to step up support for infrastructure in order to prop up growth. Beijing wants to stimulate the economy and to keep tidying: it may struggle to do both.

Brazil’s voters want firebrands, need the opposite

17 August 2018

Latin America’s biggest economy could use some competent fiscal stewardship. Geraldo Alckmin, a onetime anesthesiologist running in October’s presidential election, fits the bill. Many Brazilians, though, would prefer riskier choices: jailed leftist Lula, or a Trumpian demagogue.

Free press needs paywalls more than editorials

17 August 2018

Over 350 U.S. newspapers published articles on Thursday decrying President Trump’s attacks on the media, drawing a predictable retort from the White House. A coordinated effort by the news industry to explain why people should pay for their product might be more effective.

Trump adds new impetus to old short-termism debate

17 August 2018

The U.S. president wants the SEC to examine letting public companies report earnings every six months, rather than quarterly. Plenty of others, like BlackRock’s Larry Fink, had already slammed the practice. Trump’s tweeted directive should prompt some useful independent analysis.

Capital retreat turns light on Turkey lookalikes

17 August 2018

Other emerging economies also have lots of foreign currency debt or inadequate FX reserves. Some, such as South Africa and Argentina, are already hurting. Breakingviews ranks the countries that look the most vulnerable as flows to riskier markets go into reverse.