BREAKINGVIEWS

Challenge to Theresa May clarifies Brexit endgames

12 December 2018

If the Prime Minister is ousted by her party, the resulting turmoil could take Britain closer to a chaotic departure from the European Union. Even if she survives, her Brexit deal will still struggle to get through parliament. Either outcome makes a second referendum more likely.

Pernod Ricard served a shot of Diageo by Elliott

12 December 2018

The French booze group lags its rival on some counts, such as operating margins, but has bested it on others, notably share-price performance. Narrowing the gap on profitability, and improving corporate governance, as the activist urges, are worthy and achievable objectives.

Activism anxiety will grip French establishment

12 December 2018

Between the state and raiders like Vincent Bolloré, France is no stranger to meddling investors. But this year some blue-chips will face cage rattling. Pernod is just the start. The likes of Saint-Gobain, Danone, Renault - and even Bolloré’s Vivendi - are no longer off-limits.

Thiam’s bid to be boring rests on ditching traders

12 December 2018

The Credit Suisse boss plans to buy back shares worth 1.5 bln Swiss francs a year in 2019 and 2020. That should help the bank hit its 12 pct return target. Robust wealth management will offset lower trading revenue. The prospect of a 10 pct dividend yield also appeals.

Hyundai heir is tightening his grip on the wheel

12 December 2018

A radical shake-up in the upper ranks of the Korean autos conglomerate should help de facto boss Euisun Chung repair multiple dents. Flagging sales and restructuring demands from activist Elliott are top of his to-do list. A firmer hand should drive progress on both.

India’s new central bank boss starts on back foot

12 December 2018

Ex-finance ministry official Shaktikanta Das was chosen to run the RBI, a day after Urjit Patel quit. Top marks for a fast pick. There’s little to suggest, however, that a bureaucrat who backed the prime minister’s fateful demonetisation plan will resist pressure from New Delhi.

China-U.S. trade war will get a lot more personal

12 December 2018

Washington and Beijing’s tariff truce is looking fragile. The arrest of tech giant Huawei's CFO on U.S. behest complicates matters. Detention is a common business negotiation tactic in China, as a Canadian ex-diplomat just found out. U.S. executives have good cause to worry.

Stitch Fix models tech’s terminal problem

11 December 2018

The outfit-delivery service’s shares fell 29 pct despite profit that beat expectations. That’s because tech valuations hang on terminal value – the cash flows that come once the business is mature. Slowing customer growth raises doubt about whether this one will reach middle age.

Goodbye tracking stocks – don’t hurry back

11 December 2018

Dell’s $23.9 bln plan to buy back paper that mirrored the performance of subsidiary VMware received shareholder approval. Like most tracking stocks, it consistently traded at a discount because holders had few rights. That sounds like a bug; for Dell it proved a handy feature.

Google finds Congress still searching for a clue

11 December 2018

U.S. lawmakers who grilled company chief Sundar Pichai failed to land a blow, and showed themselves ill informed about what the search engine actually does. The knowledge gap is risky for tech firms, because it increases the risk of regulation that misses the mark.

Big Tech has a mission in U.S. flyover country

11 December 2018

Facebook and its rivals need friends in Washington, yet they mostly aid the urban elites. That’s a missed opportunity, because it’s in America’s interior that they can do more good, by creating jobs. That would be a slow but lasting way to build goodwill.

CVC’s $3 bln Nordic LBO do-over needs new tricks

11 December 2018

The buyout firm is taking control of Ahlsell again, two years after selling out of the Swedish distributor. Its recent ownership suggests there won’t be much scope to cut more costs. To get a decent return this time, CVC will have to pile on debt and hope for revenue to pick up.

General Electric can go from bad to worse in 2019

11 December 2018

The industrial group led by Larry Culp is mostly being propped up by its aviation arm as its power business sucks wind and its finance unit consumes cash. The risk is that cyclical, financial and competitive headwinds kick the strongest leg of the stool out from shareholders.