Chevron Q4 loss raises stakes for gas mega-project 29 Jan 2016 The $160 bln oil giant unveiled its first red ink since 2002. The CEO has cut capex, sold assets and borrowed to bolster dividends amid tumbling oil prices. Imminent production from a $54 bln Australian gas field should relieve some pressure. Any hiccups, though, could be costly.
Unselfish Xerox boss hands bragging rights to Icahn 29 Jan 2016 Ursula Burns says the activist wasn’t involved in the board’s decision to split the $9 bln company. But he’s getting board seats at one offshoot. And Burns, unusually, hasn’t yet grabbed a role in the new structure. That’s a shareholders-first approach other CEOs could emulate.
UK banks get capital clarity, plus BoE charity 29 Jan 2016 The Bank of England wants the largest UK lenders to hold only a touch more capital to lessen their systemic threat to the domestic economy. Given no big players will be hit badly, it looks like the latest reduction in bank-bashing. But the system also will be less opaque.
Barclays 2008 blessing still has elements of curse 29 Jan 2016 The UK bank’s former adviser Amanda Staveley is suing over aspects of an 11.8 bln stg capital raising. For Barclays, the financial positives from dodging a state bailout outweigh the negatives. But shareholders now also see reputational and ethical issues as more important.
Italy’s bad bank fit for its one real purpose 29 Jan 2016 The new plan to get bad loans off banks’ books is mind-bendingly complex. But the inputs are quite simple: banks’ desperation, investor greed and rating-agency whims. The lender where it’s most likely to work is Monte dei Paschi di Siena, which happens to be Italy’s biggest woe.
Murdoch’s second season could be good for Sky 29 Jan 2016 Four years after resigning at the height of a phone-hacking scandal, James Murdoch is back as chairman of the pay-TV group. That may rattle minority investors, but Murdoch has proven himself. It would be an odd move if Fox planned to buy the 61 percent of the company it doesn’t own.
Monetary policy enters mysterious quantum realm 29 Jan 2016 Japan’s foray into negative rates typifies a world where conditions are so loose that traditional relationships break down. Take bond yield curves, which used to be able to foresee recessions. This handy warning system no longer behaves as expected in the new quantum paradigm.
ThyssenKrupp salvation is right on its doorstep 29 Jan 2016 The German steel-making group’s turnaround has sputtered: shares are down 35 pct in a year and the outlook is tepid. A better corporate structure could create new oomph. A full-blown breakup may be tricky, but fellow Essen resident RWE’s spinoff plans may work for Thyssen too.
Bank of Japan’s new currency salvo could backfire 29 Jan 2016 The central bank has responded to turmoil in global financial markets by cutting interest rates below zero. The shock move weakens the yen and opens a new front in Japan’s battle against deflation. But it also risks adding to the international tumult that prompted the BOJ to act.
Reformed robot maker tripped up by tech slowdown 29 Jan 2016 Japan’s Fanuc smartened up after activist Dan Loeb took a stake: hiking dividends, cancelling stock, and actually talking to investors. But dismal results reflect the challenges posed by a slowing China and weaker smartphone demand. That’s not something financial policy can fix.
Samsung investors schooled on restructuring bets 29 Jan 2016 The heir to South Korea’s top conglomerate is selling part of his stake in Samsung SDS. That’s a disappointment for shareholders hoping for a merger between the IT services company and flagship Samsung Electronics. Guessing what Jay Y. Lee will do next is risky business.
Amazon could eventually face a Xerox moment 28 Jan 2016 The online retailer is growing rapidly, while the tech icon has faded fast. But both companies pair businesses that don’t fit together. Activist Carl Icahn persuaded Xerox to split off its more promising assets. If he’s still around, a similar move might someday work for Amazon.
Illinois flunks a fix for Chicago school finances 28 Jan 2016 The state’s push for a takeover and possible bankruptcy of the system may have foiled a needed $875 mln bond sale, making a bad situation worse. Illinois has shown it can’t handle its own budget and Mayor Emanuel is too weak to fight back. It’s a lesson in fiscal incompetence.
Argentine bank IPO beckons brave bulls 28 Jan 2016 Grupo Supervielle represents a rare stock issue from Buenos Aires that could capitalize on market enthusiasm for President Mauricio Macri, who took Davos by storm. Restrictive lending rules already are being loosened. Argentina’s checkered economic past nevertheless looms large.
What happens in Baku may not stay in Baku 28 Jan 2016 Azerbaijan is calling in the IMF as its currency plunges. Yet it isn’t the only one heavily exposed to oil and gas prices. Dependence on Russia for trade, growing debt and reliance on commodities could unsettle the region unless prices recover or financial holes are plugged.
EU tax reform is flawed – get used to it 28 Jan 2016 European measures to kybosh flagrant corporate tax avoidance schemes look broadly welcome. Without global agreements, though, disparities will always let the likes of Apple and Alphabet whittle down bills. And binding sovereign countries to one approach is akin to herding cats.
Alibaba offers two insights into China economy 28 Jan 2016 The e-commerce giant’s third-quarter revenue rose 32 pct, above expectations. It shows China shifting to more consumption. But it also shows that Alibaba, like China, needs new ways to grow. Forays into local services and the cloud make it a less useful proxy for the consumer.
Ford investors are driving at big drop in profit 28 Jan 2016 The humble six times earnings at which the automaker trades implies a 40 pct fall in the bottom line. GM and Fiat Chrysler look worse. China’s wobbles, a peaking U.S. market and autonomous cars warrant caution. At least Ford is better prepared for a downturn than a decade ago.
Deutsche Bank risks its own “keep dancing” moment 28 Jan 2016 Despite a rotten quarter in investment banking, Germany’s biggest lender will keep adding risk and rainmakers. CEO John Cryan is entitled to see fixed-income issues as cyclical. But in time his stance may echo ex-Citi boss Chuck Prince’s 2007 pledge to stay at the subprime ball.
Russia and OPEC only need to give an inch on oil 28 Jan 2016 Russia has given its biggest signal yet that a grand bargain with Saudi, Iran and the rest of OPEC to reduce oil output is possible. All sides want to avoid the economic catastrophe of $20 crude but none wants to sacrifice market share. A modest cut may be all that is required.
Japan’s Abe loses a shield but keeps his armour 28 Jan 2016 A funding scandal has claimed Economy Minister Akira Amari. Losing a close ally is embarrassing for Shinzo Abe. Still, the PM and his party remain strong. Abe’s plan to revive Japan faces challenges, but they are mostly financial and economic, not political.
H&M suffers from rare wardrobe malfunction 28 Jan 2016 The Swedish fast-fashion retailer said discounts on a glut of winter wear would weigh on sales. H&M is a little less efficient than chief rival Inditex, and the strong dollar isn’t helping either. Still, both are in a different league from most peers.
Aussie port and rail battle defies market gravity 28 Jan 2016 Takeover interest has kept Asciano’s stock afloat in falling markets. Now that local rival Qube has formalised its $6.3 bln breakup bid, original suitor Brookfield is under pressure to respond or lose the backing of Asciano’s board. The recent selloff raises the stakes further.
Goldman shuffles further from eye of 1MDB storm 28 Jan 2016 The Wall Street firm made outsized fees raising money for the fund at the centre of a scandal that nearly toppled Malaysia’s prime minister. Now a top banker involved in the deals has gone on leave. Though it distances Goldman from the controversy, reputations are harder to mend.
Zoomlion’s U.S. tilt shows power of state support 28 Jan 2016 The Chinese machinery maker’s $3.3 bln approach to rival Terex defies financial logic, but could make political sense. Beijing makes no secret of its desire to build global brands. Giving Zoomlion the green light suggests it has official backing to be one of China’s flagbearers.
Facebook mobile growth accelerates down open road 27 Jan 2016 Revenue from smartphone and tablet ads grew a whopping 81 pct last quarter year-over-year, accounting for most of the social-media giant’s $5.8 bln total revenue. With companies getting more comfortable touting wares on digital devices, Facebook still has plenty of room to expand.
Greenhill owners buckle up for roller coaster ride 27 Jan 2016 Delayed deals have sent the bank’s stock into a deeper dip of late than rivals’ shares. Positive signs in last quarter’s results may reverse the drop. If shareholders can’t grasp the boutique’s quirky business, though, they’ll keep ending up with their stomachs in their mouths.
United’s pesky investors chart risky flight path 27 Jan 2016 Altimeter Capital and another fund are pressuring the No. 2 U.S. airline, whose stock has sagged amid the CEO’s health problems and lower traffic at its Houston hub. Cheap oil creates room for share-lifting payouts, but United could use the cushion when future turbulence strikes.
Ackman inadvertently makes case for index funds 27 Jan 2016 The Pershing Square boss rails against passive portfolio managers in his latest missive. Bill Ackman also blames his own woeful 2015 performance on bad market timing and hedges that didn’t work. That encapsulates why most investors should stick to the likes of the S&P 500.
U.S. companies off-key singing strong-dollar blues 27 Jan 2016 Apple, DuPont, J&J and P&G blame the greenback’s rising value for lowering quarterly sales. They have a point, but a robust currency helps consumers, importers, service providers, real-estate sellers and others. That’s reason enough for Americans to whistle while they work.