BREAKINGVIEWS

Renault is biggest loser in Carlos Ghosn debacle

19 November 2018READY SOON

The French carmaker’s CEO is being ousted as chair of alliance partner Nissan. Were cross-shareholdings unwound, Renault might enjoy a valuation boost. What is more likely before then is that a lopsided partnership will be recalibrated to the disadvantage of the Gallic company.

Euro budget is a withered carrot for fiscal rebels

19 November 2018

France and Germany want to set up a pot of money to fund investment in the euro zone. The fund will only be available to those who comply with EU fiscal rules. The idea is a nice one but there may be too little money and too much complexity for the incentive to be effective.

Renault-Nissan pays price for Ghosn key-man risk

19 November 2018

Both carmakers’ shares tanked after Nissan said its chairman had understated his income and might leave. With Carlos Ghosn also Renault CEO, the two groups are reliant on one big hitter to solve their lopsided partnership. That’s a big problem if he’s no longer there.

Telecom Italia’s new boss faces old challenges

19 November 2018

Luigi Gubitosi has replaced Amos Genish as head of the Italian telco. With backing from activist investor Elliott, he will try to engineer a complex network breakup and sell assets. But bitter opposition from 24 pct shareholder Vivendi will make the strategy hard to execute.

Xiaomi phones, not services, are eating the world

19 November 2018

A 50 pct surge in quarterly sales confirms the success of the nearly $50 bln Chinese group's smartphones in India and beyond. Xiaomi is mainly about hardware. Boss Lei Jun's bets in video-streaming, fintech and other internet plays may prove to be costly distractions.

Global hotel chains get Kentucky fried in China

19 November 2018

A video showing staff at Marriott, Hilton and other chains cleaning cups with dirty towels has gone viral, forcing local managers to apologise. As Yum Brands found, Chinese smear campaigns can become big business headaches. An escalating trade war only increases the stakes.

Anta deal would be a marathon not a sprint

19 November 2018

Tencent may join the Chinese sportswear company and others in their $5.3 bln approach for Salomon owner Amer. The price, plus initial hits to the margin and dividend, worry shareholders. And yet if Anta could replicate what it did with Fila, the acquisition might pay off in time.

M&A can bring relief to Asia’s crowded skies

19 November 2018

Too many carriers, with too many planes, offering cheap fares have left the industry on its knees, and put price controls back on the agenda. Consolidation is a better fix. With Indonesia’s Garuda taking over a rival and India’s Jet Airways in play, a turning point may be near.

Chip industry’s new paradigm looks like old one

16 November 2018

As cutting-edge semiconductors got harder to make and demand boomed from new fields like bitcoin mining, top manufacturers seemed invulnerable. Shrinking sales forecasts from Nvidia and Applied Materials show companies are as prone as ever to economic cycles and excess inventory.

Levi Strauss IPO would be financially retro

16 November 2018

The jeans group may go public more than 30 years after a family-led LBO. It has done well in the recent retail turmoil that hit the likes of Nordstrom and a mooted $5 bln valuation looks fair. But the skinny from Levi’s own ups and downs is that staying private is a better fit.

Watch UK bonds to see when there’s a real crisis

16 November 2018

The pound suffers every time concern flares that Britain may crash out of the European Union. But gilts strengthen since bleaker economic prospects make higher interest rates less likely. The clearest sign investors have had enough would be when both weaken at the same time.

Rates pain compounds UK banks’ Brexit misery

16 November 2018

Shares in British lenders fell after government resignations increased the chances of Britain failing to agree a deal with the EU. Investors are pushing back hopes for higher interest rates. That leaves banks stuck with low margins on top of political and economic uncertainty.

Europe can play a waiting game with Italian rebels

16 November 2018

Italy’s anti-austerity budget flouts Brussels’ fiscal rules. Declaring Rome in breach and imposing penalties would fuel euro scepticism ahead of key European elections. Better to tone down the rhetoric, and let a slowing economy and hostile markets weaken the executive’s hand.