BREAKINGVIEWS

Misfiring UBS traders are only part of the problem

23 July 2019

The $46 bln Swiss bank reported another tepid performance from its investment bank in the three months to June. A decline in wealth management profit poses a bigger problem for CEO Sergio Ermotti. With revenue subdued, he needs to cut more group costs if he's to hit 2021 targets.

Santander’s valuation discount looks out of date

23 July 2019

The Madrid-based bank posted an 11% annualised return on equity for the second quarter. Slow Spanish and UK markets mean shares in the 65 bln euro lender trade at around 0.9 times book value. Exposure to fast-growing Latin America means it should close the gap faster than rivals.

UK’s Huawei review amounts to an endorsement

23 July 2019

The outgoing government ducked making a call on whether the Chinese telecom supplier can build 5G networks. But its report makes a stronger case for Huawei than against. Probable next Prime Minister Boris Johnson will either have to ignore the findings or irk American hawks.

ByteDance charts a global path for China tech

23 July 2019

The $75 bln outfit behind video app TikTok is mending relations with Indian officials to avoid a ban. Even so, boss Zhang Yiming has outshone peers like Tencent's Pony Ma abroad, growing fast in the U.S. and beyond. Deep pockets and bold ambition could deliver a big payback.

Corporate activism tastes different in China

23 July 2019

Soft drink Pocari Sweat is caught in a firestorm after it pulled TV ads in apparent support of Hong Kong protests. Such statements can pay off for brands that have political influence, or stand to win more friends than enemies. With Beijing involved, neither is usually the case.

Gamer favourite Razer’s next level demands focus

23 July 2019

The Hong Kong-listed maker of pro-keyboards wants to widen its appeal beyond gamers. It already sells phones, and is dabbling in payments. Distractions can be costly, though, and Razer's main business is doing fine. Doubling down on e-sports instead might help it turn a profit.

Hedge funds just can’t cope with rising markets

22 July 2019

The industry has become a chronic investing laggard as most assets rise. Even the flagship fund of Ray Dalio’s Bridgewater was down some 5% this year. Ex-Harvard whiz Jack Meyer is closing shop after years of bad results. Hedge funds’ $3.2 trln of money looks under threat.

Disney movie mojo is tight squeeze on small screen

22 July 2019

The $250 bln media giant’s “Avengers: Endgame” is now the No. 1 grossing film in the world. The Mouse House is home to another six of the top 10 movies, too, thanks to boss Bob Iger’s savvy deals. Transferring the magic to its forthcoming video-streaming services may be hard.

Big Ski is a boon for investors, if not for skiers

22 July 2019

Vail Resorts’ $264 mln deal for Peak Resorts brings 17 mostly bunny hills to the operator of some of North America’s sweetest slopes. Like all things ski-related, the price is high. But Vail can justify the 100%-plus premium by jamming skiers into its premier mountains.

Equifax shows how little it values consumers

22 July 2019

The credit-scoring firm gathers troves of sensitive financial information, making it systemically important. Yet it’s paying less than $3 in compensation for each of the nearly 150 mln Americans affected by its 2017 data breach. That provides little incentive to tighten security.

Ted Baker offers tricky embrace for private equity

22 July 2019

Shares in the seller of colourful shirts rose 15% on hopes of a buyout. A low valuation, and the opportunity to expand in Asia may appeal. But the likely involvement of hug-loving founder Ray Kelvin could deter some buyers. And the group’s sluggish growth will limit returns.

Swiss currency ticks towards new showdown

22 July 2019

The franc hit a two-year high against the euro. Policy interest rates are already negative so cutting them further may fail to dent its strength. A return to major intervention risks U.S. ire. Traders will take advantage of central bank boss Thomas Jordan’s bind.

New Julius Baer CEO will start on lean note

22 July 2019

The $10 billion Swiss wealth manager reported weak first-half net profit. Outgoing boss Bernhard Hodler has worked on fixing some of its problems by cutting costs and ditching potentially dodgy clients. Successor Philipp Rickenbacher’s main job will be to attract more new money.