P&G’s Lafley leaves second act only half finished 29 Jul 2015 The $217 bln nappies-to-razors giant’s CEO passes the baton barely two years after returning to the job. A.G. Lafley has sold divisions, cut costs and killed duff brands, but P&G’s shares barely budged. It now falls to David Taylor to reignite growth - or risk activists’ ire.
Clinton half-hearted on helping labor over capital 29 Jul 2015 The would-be U.S. president wants to tackle inequality. Proposals to tweak capital gains taxes, for example, are part of that. Things like raising minimum wages or abolishing the interest deduction might do more. Clinton’s problem is she can’t afford to knock business too hard.
Barclays’ new crash diet needs markets to be kind 29 Jul 2015 The UK bank wants to cut up to 8 pct more in costs, while shedding legacy assets fast. Given Barclays’ new expense target is expressed as around 55 pct of the top line, more revenue would help. Both that and a helpful environment for deleveraging are far from assured.
Varoufakis gives Greece the gift of a scapegoat 29 Jul 2015 The former finance chief’s alarming tales of trying to hack state computer systems might be just what the debt-stricken country needs. Ask China, which has long recognised the value of a strategic purge. Rogue elements breed discord, but once expelled, they can create more unity.
Euro Disney pricing is rational. It may still lose 29 Jul 2015 The European Commission thinks the amusement park’s nation-by-nation pricing policy goes against single market principles. Euro Disney is just looking for efficient ways to sustain its business. But the sound economics is up against political power. The latter is likely to win.
Improving VW can absorb looming China test 29 Jul 2015 Growing uncertainty over China is weighing on Volkswagen shares. Half-year results show that weaker demand in the world’s biggest car market is already slowing the 89 bln euro giant. But improving European operations and vast self-help potential mean it can absorb the shock.
Twitter’s mealy-mouthed strategy is hard to follow 29 Jul 2015 Interim boss Jack Dorsey said the micro-blogging site isn’t satisfied with just a 66 pct increase in Q2 revenue. His prescription for what ails Twitter, however, is cryptic. Companies that can’t express goals clearly, especially ones seeking a CEO, reduce chances for success.
China carbon vow shows change in political climate 29 Jul 2015 Beijing’s new emission goal is convincing and could be legally binding. It’s a change of heart for a country that frustrated climate talks in the past. The commitment to change is real – even if a recent stock rout underscores how vulnerable reform is to domestic stresses.
LaGuardia gets a refreshing clearance for takeoff 28 Jul 2015 One of the worst U.S. airports, in the country’s financial hub, is finally slated to be rebuilt, by 2021. At least $4 bln of funding will be public, private and local, but Washington played an important advocacy role. Absent a nationally led effort, it’s a decent model to follow.
DuPont’s fight against Nelson Peltz rages on 28 Jul 2015 The $50 bln chemical maker may have seen off the pushy billionaire in May, but its shares have since tumbled 20 pct. DuPont now expects lower profit, and dividends from spun off Chemours look shaky. Boss Ellen Kullman soon could find shareholders wondering what might have been.
New York commuter crisis may be good for America 28 Jul 2015 Major delays on some of the busiest rail lines into Manhattan from New Jersey have incited outrage. The overhead wires being blamed are emblematic of the decrepit infrastructure across the country. After so much partisan bickering, this episode could focus minds on funding.
Billionaire’s biotech IPO rides high on hope 28 Jul 2015 Patrick Soon-Shiong, whose NantKwest just fetched a $3.4 bln value, has made minority investors rich before but also treated them poorly. His new cancer treatment lacks supportive data for such a difficult task amid stiff competition. In this market, though, almost anything goes.
Ford shows why Marchionne’s M&A drive is stalling 28 Jul 2015 The U.S. carmaker revved up its best quarter since 2000, with a record showing in North America. Boss Mark Fields sounded optimistic, too. That makes it easy for Ford to ignore the Fiat Chrysler CEO’s pleas for industry consolidation – even if tie-ups make sense longer term.
The Economist’s elite owners seek elite print run 28 Jul 2015 The Agnellis, the Rothschilds, et al may buy more as Pearson sells. A 6 pct dividend yield has appeal. If the valuation – recently 730 mln stg – and payout are to keep rising, however, the weekly has to succeed where other publications have failed and turn its top line around.
London scrubs vainly at dirty money inflows 28 Jul 2015 Laundered cash hidden in UK property is an unwanted compliment to Britain’s open borders, stable politics and tolerance of anonymity. Privacy may be compromised if things are to be cleaned up. Full transparency, though, is neither in Britain’s gift nor lawmakers’ interest.
Austria pricked by court in Heta bail-in tangle 28 Jul 2015 A law which wiped out guaranteed creditors of bust bank Heta has been thrown out. The sums are small, but the court’s decision may embolden creditors in a bigger fight, over 10 bln euros of other state-backed debt. The verdict hurts Austria, but the legal logic is hard to fault.
UK reels in well-qualified rate-setter from Brevan 28 Jul 2015 Hedge funds are unlikely waters in which to fish for candidates for the Bank of England Monetary Policy Committee. But UK Chancellor George Osborne has landed a good catch. Brevan Howard economist Gertjan Vlieghe combines market nous with welcome economic heft.
Zurich should look hard before it leaps at RSA 28 Jul 2015 The Swiss insurer wants to invest free capital rather than give it back to shareholders. UK-based RSA, at 5 bln stg, is an attainable target. But Zurich Insurance might first examine the disastrous 1996 deal that created the company formerly known as Royal & Sun Alliance.
Fickle FX markets are a pain to trade 28 Jul 2015 Currency moves often appear arcane to outsiders. These days, insiders are also flummoxed. Plausible theories can fall apart overnight. A big problem is that traders lack conviction. They are hamstrung by patchy liquidity and reduced knowledge about market positions.
BP is making the best of a bad situation 28 Jul 2015 Underlying profit at the UK oil major fell 64 percent. The lower oil price is the main culprit. Costs and capital expenditure are coming down, and operating cashflow remains resilient. But with the oil price falling again, BP has more challenges than opportunities.
Gucci’s smart sales don’t yet signal new look 28 Jul 2015 Promising first-half sales at Kering’s main luxury brand sent shares up in early trading. A weak euro, Chinese shoppers in Europe and discounts in Asia boosted revenue 11.8 pct. But Gucci still needs more work to close the group’s 17 pct price-to-earnings discount to peers.
Market sirens lead China astray 28 Jul 2015 Regulators say they will keep supporting stocks. That unwise pledge is the high price of being a financial free rider. Like many governments, China’s authorities found the easy gains from a rising market irresistible, and have ended up its slaves.
Baidu reinvention needs a roadmap to profit 28 Jul 2015 The Chinese search engine giant has begun to explain its big bets on “online-to-offline” services. There’s promise, but competition is fierce and subsidies are rife. Investors have cut $15 bln from Baidu’s market cap in 2015. They need a clearer idea of where it is headed in O2O.
Allergan turns itself into M&A lab experiment 27 Jul 2015 The pharma giant has since 2012 racked up over $100 bln in deals and changed its name twice and its tax HQ once. Selling its once core business to Teva for $41 bln leaves Allergan free to pursue even bigger targets. But too much reliance on M&A could leave the Petri dish exposed.
Wacky $2.2 bln SNL deal puts investors in a tizzy 27 Jul 2015 Shares in McGraw Hill lost $1.6 bln of value after it agreed to buy the financial data firm for 53 times last year’s EBITDA. That suggests investors value the growing SNL at little more than the $550 mln of tax breaks it brings. The multiple is crazy, but that doesn’t compute.
McDonald’s can sizzle flipping double-3G burgers 27 Jul 2015 CEO Steve Easterbrook’s fast-food chain trades at half the valuation of the Burger King-Tim Hortons feast the Brazilian investment firm cooked up. That’s because 3G outdoes its super-size rival at beefing up sales with new products. Bolder recipes would help McDonald’s catch up.
Zegona debut puts new twist on telco M&A 27 Jul 2015 The UK-listed buyout shell is spending 640 mln euros on Telecable, a regional Spanish telco. The new owners aim to sell within five years. Value creation won’t be easy. Still, it is refreshing to see a buyer stress operational improvement over financial engineering.
FT’s rich price is a sign for the Times 27 Jul 2015 Media tongues are wagging about the sale of the Financial Times to Nikkei for $1.3 bln. If 35 times operating profit is a guide to the going rate, it’s worth wondering what’s next. The still family-led New York Times springs to mind. The Sulzbergers may not get a better chance.
Starbucks serves up a tepid brew in Johannesburg 27 Jul 2015 The coffee giant has been blitzing China, but its move into South Africa is more cautious. Although the country offers a growing middle class, GDP growth is slowing. And too few Africans can afford the “Starbucks experience” for rapid expansion across the continent.
Teva exits Mylan mess with $40.5 bln Allergan deal 27 Jul 2015 The Israeli pharma firm has been locked in a bitter battle to take over the Dutch drugmaker. Now it has agreed to buy the generic business from Allergan. The swap makes sense. Friendly is far easier than hostile, and the Allergan businesses are just as attractive as Mylan.