BREAKINGVIEWS

Succession cloud is one issue Glencore can clarify

22 October 2018

Boss Ivan Glasenberg may have talked to investors of retiring in up to five years. The company's driving force is a youthful 61. But the group has had a torrid 2018, including a U.S. subpoena, and lost some $16 bln in value. A clearer view of the next generation would help.

Altaba offers half a map to Naspers’ future

22 October 2018

The former Yahoo’s $55 bln holding in Alibaba eclipsed its other businesses, finally leaving only a planned unwind to do. Naspers’ $110 bln Tencent stake likewise far outweighs the South African group’s operations. Investors like the huge gains, but want to minimize the tax, too.

KKR throws autos shareholders into a spin

22 October 2018

The buyout group is paying $7.1 billion for a Fiat Chrysler-owned supplier. The double-digit earnings multiple is a coup for new FCA CEO Mike Manley. The big premium to where the industry trades needs some justifying. But regular investors may also be too gloomy about the sector.

Lloyds offers shareholders a binary Brexit dare

22 October 2018

The UK bank may buy back 2 billion pounds-worth of stock next year, according to the Financial Times. That could boost annual returns to nearly 15 percent and justify as much as a 40 pct boost to Lloyds' share price – as long as the UK can avoid a messy split from Europe.

Ryanair wings recovery on consolidation prayer

22 October 2018

Strikes, lower fares and higher fuel costs lopped 7 pct off the budget airline's earnings in its busiest season. Ryanair's high margins and oil hedges are a buffer. But it's relying on less well-protected rivals stalling for its own performance to take off.

Cooled coal IPO singes commodities exuberance

22 October 2018

Private equity-backed Coronado shrunk a $1 bln share sale Down Under to just $550 mln and priced it at the bottom of the range. A rosy comparison to Rio Tinto’s recent asset sales came up short. And it is the latest sign of shakier prospects for steel and China demand.

China’s tech hub warrants an upgrade from Beijing

22 October 2018

Shenzhen has morphed from tiny market town to a $320 bln economy. Conferring a province-like status on it would boost Xi Jinping’s plans to integrate the surrounding region. Having more power in the capital amid a trade war also could help champion the likes of Tencent and DJI.

Saudi turmoil is new twist on old C-suite dilemma

20 October 2018

The kingdom’s admission that Jamal Khashoggi died in its Istanbul consulate damages the crown prince’s ability to execute his Vision 2030 strategy. If Saudi were a company, its chairman would replace the CEO and continue with economic reforms. That possibility remains remote.

P&G’s innovation drive could use a boost

19 October 2018

Healthy consumers helped the consumer-goods giant report strong sales. Even its troubled razor business has sharpened up a little. P&G is following activist Nelson Peltz’s advice and trying new things. With costs rising and pricing power weak, it can’t afford to slacken the pace.

Facebook hires one weapon for two-handed fight

19 October 2018

Nick Clegg, former UK deputy PM, will lead global affairs at the $450 bln social network. His anti-Brexit stance and EU background could help with tribulations in Brussels. But he’s an odd choice to deal with Washington, where scrutiny may intensify after the midterm elections.

Spanish bank tax hit not as scary as it looks

19 October 2018

Shares in Spanish lenders dropped sharply after a court ruled banks may have to refund mortgage taxes. That could mean a collective hit to earnings of up to 1.5 bln euros, based on the last four years of new loans. With lending rates set to rise, that’s painful but manageable.

Italy tries risky EU gamble on budget

19 October 2018

The radical government wants to boost spending despite Brussels’ opposition. Lengthy procedures mean the spat will drag on until European Parliament elections in May. With radical parties gaining ground, the new Commission could be more lenient. But markets won’t wait that long.

ABB belatedly succumbs to industrial revolution

19 October 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.