BREAKINGVIEWS

Unilever and Nestlé’s growth tests pricing power

18 October 2018READY SOON

Higher prices helped the consumer goods giants boost revenue in the third quarter. Both need to keep charging more to offset rising costs. The risk is that price-conscious customers go elsewhere. It ultimately depends on whether the world economy can cope with higher inflation.

Wall Street offers no relief to European rivals

18 October 2018

On average, U.S. investment banks reported a 7 percent jump in equities revenue in the third quarter, while fixed income trading declined. If results from European peers follow the same trend, top-line growth will be minimal. That leaves more cost cutting to boost dreary returns.

SAP margin crunch comes with a silver lining

18 October 2018

The 120 bln euro software group’s results disappointed, with its operating margin declining. Yet that’s because its cloud computing unit is outgrowing the older, more profitable business. If that continues it will mean more stable revenues, faster growth, and a higher valuation.

TSMC can withstand a worsening trade storm

18 October 2018

The $200 bln Taiwanese chipmaker’s quarterly profit only dipped 1 pct in a tough market. U.S.-China tensions loom, but next-generation semiconductors are helping cushion the blow. Unlike fellow Apple supplier Foxconn, TSMC is also less vulnerable to customers moving production.

#MeToo has room to spread in India Inc

18 October 2018

Companies are rushing to improve practices after a wave of harassment allegations from film stars and journalists. That’s welcome: implausibly few complaints are reported. Where New Delhi has been relatively silent, firms can set the tone. It will help retain more talent too.

The sick man of Southeast Asia faces ill winds

18 October 2018

Thailand fared better than its neighbours in recent market ructions. Yet the ossified $460 bln economy is held back by an ageing population, poor education and high household debt. With an interest rate hike and a contentious poll ahead, there will be even fewer reasons to cheer.

China’s wink at punters hints at intervention

18 October 2018

Top officials are being trotted out to reassure investors after a near-25 pct stock slump this year. "Spring" is not far off, they say; a deleveraging campaign is already on hold. This is all in Beijing’s playbook: if markets keep falling, more active policy support comes next.

U.S. Treasury hasn’t yet been Trumped

17 October 2018

China again escaped being named a currency manipulator by the U.S. agency, despite pressure from the president. Although some trade-related penalties are already happening through other means, it’s a rational decision. Steady hands at Treasury and the Fed offer investors comfort.

SEC data-fee ruling hits exchanges where it hurts

17 October 2018

The U.S. securities regulator’s rejection of two increases won’t hurt NYSE and Nasdaq in the short run but it does challenge their business model. The fragmentation of equity trading has made data as valuable as execution or listings. Losing pricing power is a big risk.

Finance makes Apple and Google forced friends

17 October 2018

Steve Jobs once wanted to destroy Google for copying the iPhone. The company he founded is now dependent on the search engine and its parent Alphabet for around 10 pct of its profit. The growth of mobile search and the market for secondhand phones will bind the two even tighter.

Dollar Tree proves money doesn’t grow on mergers

17 October 2018

The $20 bln U.S. ultra-discount chain has lost a quarter of its value in nine months. That’s despite winning a fight to acquire Family Dollar in 2015 and beating merger cost-cut targets. Now activist Carl Icahn may be buying shares. Deals only buy time for struggling retailers.

Wall St seeks ambitious banker for lit new role

17 October 2018

Canada has legalized recreational marijuana, and other countries are likely to follow. That’s an investment-banking opportunity. Goldman Sachs and Bank of America have already dabbled in cannabis deals. It’s only a matter of time before a big firm hires its first “head of weed.”

Japanese banks sit quietly pretty in Saudi saga

17 October 2018

Top U.S. and European bank bosses have pulled out of Riyadh’s investment conference. Japanese rivals MUFG and Mizuho are relatively insulated from the same culture of protest. If anything, it’s a chance to court favour in the kingdom and increase their share of Saudi’s fee wallet.