BREAKINGVIEWS

China’s M&A controls trap firms in a warped market

21 August 2017READY SOON

Officials have formalized guidelines curbing "irrational" purchases of foreign hotels, soccer clubs, film studios and so on. However, M&A is a small factor in China’s debt problem. Nor does this fix the margin-destroying distortions that encourage companies to venture overseas.

Economic nationalists still linger in White House

18 August 2017

Steve Bannon, who advocated protectionist, "America first" policies, is out. That's a plus for the economy. But other foes of trade and immigration continue to influence Donald Trump. The centrists’ fight waged by Gary Cohn and others will get easier but it’s not over.

Calpine $5.6 bln buyout puts chips on gas hegemony

18 August 2017

A consortium is taking the heavily indebted electricity company private at a 51 pct premium. It’s a bet natural gas will dominate the nation’s power grid. Problems with other sources justify that for now. Longer term, stagnant electricity prices and usage makes it a big risk.

Short-selling fee bastion will be hard to topple

18 August 2017

Wall Street makes $9 bln helping pension funds lend stocks to fuel hedge-fund bets. Now three public retirement plans are accusing Goldman, JPMorgan and others of collusion. It’s a business ripe for disintermediation. But it’s too lucrative for banks to concede without a fight.

P&G’s best defense shouldn’t be a takeover offense

18 August 2017

As the consumer giant faces a proxy fight with activist Nelson Peltz, one idea doing the rounds is to consider an acquisition. The trick is to find a target as alluring as Gillette once was. The more obvious candidates - Colgate, Clorox and Kimberly-Clark - don't really stack up.

Unilever can butter up price for margarine unit

18 August 2017

Private equity consortiums are reported to be circling the Anglo-Dutch giant’s spreads business. A bidding war and the rich price paid for Reckitt’s food brands may help Unilever pocket more money. But unappetising returns await any buyer who pays more than 7 billion pounds.

Barcelona attack targets Spain’s strongest spot

18 August 2017

Tourism is a pillar of the recovering Spanish economy, making the deadly assault on Las Ramblas a strike on prosperity as well as people. But previous attacks elsewhere in Europe show confidence bounces back, and the domestic economy is more resilient than it has been for years.

Bondholders can play hardball with Portugal’s Novo

18 August 2017

Bailed-out lender Novo Banco wants creditors to take a haircut, to smooth a sale to Lone Star. But creditors have numbers to block the swap, and could recapitalise the bank themselves. Novo has a history of scrapping with bondholders. This time creditors may have the upper hand.

Merkel matters less than her next coalition allies

18 August 2017

The German chancellor is poised to win a fourth term in September’s vote. However, Angela Merkel may well be forced to govern with a small majority in partnership with the Free Democrats. That party’s trenchant calls for even more austerity are bad news for Germany and Europe.

Jack Ma’s MassMutual deal shows promise

18 August 2017

The Alibaba founder’s unit Yunfeng Financial is buying MassMutual’s Hong Kong arm. The $1.7 bln deal with the U.S. insurer helps turn Yunfeng into a broader financial group, by adding insurance and pensions operations. Once again, Ma is melding online and offline businesses.

Founders’ coup leaves a void at Infosys

18 August 2017

Vishal Sikka delivered three years of outsize returns. Now the Indian outsourcer's first professional CEO has resigned, against the board's wishes, after criticism from founder shareholders. Finding a solid outsider who can put up with the backseat driving will be challenging.

India’s e-tailers burn bright in festival season

18 August 2017

Amazon India and SoftBank-backed Flipkart are going head-to-head for the first time in India’s months-long shopping season. Both will offer massive discounts despite New Delhi's dislike of the practice. The challenge will be growing the customer base enough to justify the losses.

South Korea’s Moon, 100 days in, moves too slowly

18 August 2017

The president's bold plans to revitalise the economy are off to a slow start, even allowing for distractions from North Korea and Trump. Populist handouts to boost consumption are no substitute for reforming the family conglomerates that dilute the nation’s economic energy.