BREAKINGVIEWS

Barclays has new ammunition for Bramson fight

21 February 2019

The bank’s fixed-income business outperformed Wall St peers in the fourth quarter. That’s a blow for activist investor Edward Bramson who wants to shrink the unit. But CEO Jes Staley has limited room to gloat: returns are below the cost of capital and the expense target slipped.

GAM employees outperform shareholders

21 February 2019

The scandal-hit Swiss fund group has lost three-quarters of its value in a year. Senior management’s bonus bill has nearly halved. A desire to hang onto staff in a crisis explains the relatively generous payoff. In asset management, shareholders bear more of the risks.

Nissan would be better off with its own chairman

21 February 2019

A panel enlisted by the Japanese carmaker opposes replicating the corporate governance model used under Carlos Ghosn. Uniting with Renault makes sense in the long run, but for now two separate board chiefs will be more effective at cleaning house and rebalancing the relationship.

European telco giants are cheap for a reason

21 February 2019

Deutsche Telekom, Orange and Telefonica appear undervalued relative to the past five years given their rising sales, stable EBITDA margins and M&A options. But they look less of a bargain once hefty network investment needs and the possibility of low returns are taken into account.

Agarwal’s Anglo carve-up has a new stumbling block

21 February 2019

The Indian tycoon’s rent of a fifth of the mining group’s shares implies he might want to lobby for a breakup. To do so he’ll need to get Anglo American’s next biggest investor, South Africa’s state pension fund, on side. That’s beginning to look less and less likely.

Man City’s long game in China can yield a win

21 February 2019

A consortium including the Manchester soccer club’s owner has acquired third-tier Sichuan Jiuniu FC. It's a modest punt, and the first by a Premier League heavyweight in the mainland game. Local allies and experience in multiple countries set the buyer up for financial success.

Storms won’t keep Qantas from higher flight path

21 February 2019

Australia's flag carrier said fuel costs pulled first-half earnings down by nearly a fifth to $559 mln. Domestic business proved resilient, though; its fleet and balance sheet are in good shape too. Choppy weather lies ahead, but Qantas looks sturdier than higher-valued rivals.

Lenovo’s reboot could run low on battery

21 February 2019

Quarterly pre-tax earnings more than doubled from a year earlier, confirming a turnaround at the world's top PC-maker. That's mostly powered by cost cuts in the $9 bln group's handset and server units. With demand cooling for both, this comeback may prove difficult to sustain.

Three digital ad giants are no better than two

20 February 2019

Google and Facebook’s combined share of U.S. online advertising is poised to fall for the first time this year. The reason: Amazon is taking a bite out of their slice. Even a muscular challenger does little to reduce the case for tighter regulation.

Brazil’s Bolsonaro hits pension bull’s-eye

20 February 2019

The new president’s plan to trim $270 bln from ruinous social-security spending is smartly aimed. Shoot much higher and supporters and lawmakers might balk entirely; much lower and foreign investors might not take him seriously. Now the congressional haggling begins.

Scale is no easy remedy for CVS price pressures

20 February 2019

The pharmacy firm slashed its profit forecast due to a squeeze on reimbursements and slower drug-price growth, wiping $7 bln off its market value. Buying Aetna was supposed to help it cut costs and improve patient outcomes, but that’s harder than banking on healthcare inflation.

EU banks keep stepping on old landmines

20 February 2019

A French court fined UBS a record $5.1 bln for helping clients evade taxes in the past, while Swedbank faces allegations about old dodgy transactions linked to Danske Bank’s money-laundering scandal. European lenders seem unable to avoid the damage from past compliance bungles.

South African power bailout puts consumers on hook

20 February 2019

A $4.9 bln government lifeline is the bare minimum needed to keep indebted utility Eskom afloat. Likely union resistance to mass layoffs means consumers will have to swallow higher electricity costs. President Cyril Ramaphosa can only hope hikes are delayed beyond a May election.