AB InBev’s thirst grows for SAB’s stronger ales 25 Feb 2016 The Budweiser brewer missed quarterly estimates as U.S. profit fell. Boss Carlos Brito may pass it off as a case of hiccups, but his stock’s 10 pct drop this year suggests broader challenges. It makes the $100 bln deal for better-performing SABMiller look all the more important.
IBM’s Watson figures everywhere but the figures 25 Feb 2016 Big Blue’s investor day focused squarely on a big bet on artificial intelligence. Software that interprets floods of data is becoming the next big thing. The hard part will be making it profitable. Years of effort have yet to produce a real financial result or forecast from IBM.
Iran election is key driver of oil price recovery 25 Feb 2016 Iranians will on Feb. 26 vote in the first election held since a deal with the U.S. to lift sanctions. Elect moderates and Iran could increase output, keeping global oil prices low. Go for hardliners, and the gush could be a trickle – and help OPEC reverse the slump.
Cheap oil leaves Repsol contemplating plan C 25 Feb 2016 The Spanish energy giant has cut capital spending as well as its interim dividend just months after revamping its strategic plan. But a 1.2 bln euro loss in 2015 and low crude prices may push it to consider a painful option: selling its prized 30 pct stake in utility Gas Natural.
HSBC adopts the "just add Goldman" banking recipe 25 Feb 2016 The hiring of former Goldman Sachs executive Matthew Westerman coincides with a revamp of HSBC’s operations. Folding in hundreds of corporate clients from the commercial lender may accelerate cost cuts. But it also suggests second-tier investment banks are in for a struggle.
Hugo Boss growth plans are a size too big 25 Feb 2016 The German label’s chief of eight years is stepping down after a profit warning wiped a fifth off the company’s value. Conditions in the U.S. and China are getting tougher. But the brand’s global expansion and plans to move upmarket also look to have run out of steam.
Restoration Hardware gives new excuse for failure 25 Feb 2016 The U.S. furniture retailer said sales slowed because of January’s stock market jitters. Given the high prices of Restoration products, it’s not far-fetched to believe its affluent customers have some sensitivity to the wealth effect. But this sounds like the new bad weather.
Deutsche Boerse plays nicely with LSE – for now 25 Feb 2016 The 14 bln euro German exchange is yet to divulge what cost savings may come from a mooted tie-up with its slightly smaller UK peer, but on one estimate it is giving away all their value. It could also base its HQ in London. Such good manners will help overcome future obstacles.
Sharp deal with Foxconn is a messy milestone 25 Feb 2016 The ailing Japanese group picked a Taiwanese takeover over a domestic bailout. A $4.4 bln equity injection by the iPhone assembler shows Japan’s doors are not always closed to foreign buyers. Offering Sharp many safeguards helped. Now Foxconn has to make this pricey deal work.
Lloyds dividend sunshine offset by macro cloud 25 Feb 2016 The UK lender is distributing a chunky 2 bln pounds of earnings to shareholders. A regulatory deadline will limit punishing legal charges for mis-sold insurance. But low interest rates and febrile markets have delayed cost and return targets. That could crimp future payouts.
BT avoids a breakup but at a cost 25 Feb 2016 The UK telecoms group can keep its infrastructure arm, a watchdog ruled, though the unit must operate more independently and under tighter regulation. Whether or not that promotes efficiency, it may force the company to increase spending. And a split is still on the table.
Bayer CEO can bide time on agri-business spinoff 25 Feb 2016 A merger wave among agriculture-chemicals makers may entice incoming boss Werner Baumann to put the German drugmaker’s crop science unit in play. A sale or the like could fetch up to 39 bln euros and unlock value. Yet Bayer’s record revenue and rising profit mean there’s no rush.
AIA offers timely antidote to Asian worries 25 Feb 2016 The insurer’s net operating profit jumped 10 pct in 2015 despite slower economic growth and volatile equity and currency markets. The group has deep demographic trends on its side. A 50 pct dividend hike should provide further reassurance to skittish investors.
India can afford to loosen up for a bank recap 25 Feb 2016 That would be the only good reason to ditch a 3.5 pct fiscal deficit target in next week’s budget. An existing $26 bln plan to recapitalise wobbly banks with private help looks unworkable. Bad debts damage India’s status as a bright spot amid emerging market turmoil.
Central Asia needs life support as Russia suffers 25 Feb 2016 Tajikistan has appealed to the International Monetary Fund for help. Falling oil prices and sanctions have hit remittances from migrant workers in Russia that are the lifeblood of its economy. Other countries in Moscow’s economic orbit may need similar treatment.
Trump shows even U.S. elections have money limits 24 Feb 2016 The Republican front-runner for president has spent $60 per vote, less than his party rivals. America still splashes out vast sums to woo its electorate. But there is some comfort that financial largesse alone cannot win the White House. Ironically it’s a billionaire proving it.
EU’s new bank stress probe flunks Taleb test 24 Feb 2016 European lenders’ 2016 financial checkup looks too kind. Regulators will stress for negative rates, but only partially, while Brexit risk is ignored. But a bigger flaw is the use of a single adverse scenario. As Nassim Taleb has argued, stress tests need several.
Argentina debt deal end of the beginning for Macri 24 Feb 2016 The country’s new president appears close to a $5 bln deal with holdout investors. Ending a decade of legal wrangling over the country’s defaulted debt would hand Macri an early win. But a public-sector strike over job cuts augurs a long road ahead to right the listing economy.
U.S. shale on rocky road to swing-producer status 24 Feb 2016 Saudi Arabia has ruled out oil production cuts. That suggests crude prices will stay low until enough shale drillers cut output or go bust. Brimming stockpiles and the ability to restart wells relatively quickly should keep supply flexible and any price recovery subdued.
Brexit more complex than big versus small business 24 Feb 2016 The assumption is listed firms will vote to stay in the EU, while red-tape-throttled small firms will not. But only a third of the FTSE 100 signed a letter backing Brexit. A glance at UK farms’ subsidies, labour and low tariffs suggests many small firms will vote to remain.
Foreign minnows resist opaque U.S. penalties 24 Feb 2016 An Andorran bank has managed to erase its money-laundering black mark. Last year, the Chinese-backed owner of a U.S. wind-farm project won a settlement with D.C. over the secretive CFIUS group’s block on its activities. Overseas Davids can occasionally slay Washington Goliaths.
Peugeot could rev revival by scrapping luxury line 24 Feb 2016 The French group has become one of Europe’s most profitable mass-market carmakers under boss Carlos Tavares, with a 5 pct operating margin in 2015. But a costly plan for a new premium brand risks spoiling the performance. Junking the idea would speed an already healthy recovery.
Abu Dhabi shake-up closes door on oil majors 24 Feb 2016 Abu Dhabi is restructuring its national oil producer. The sheikhdom on Feb. 14 named one of its most capable technocrats, Sultan Ahmed al-Jaber, as director general of its state oil company to help lead the task. It could freeze global oil majors out of the emirate for good.
Portugal squall maps new territory in euro crisis 24 Feb 2016 The state’s left-wing government has reassured bond markets by passing an emergency budget and buying back debt. Yet the recent spike in bond yields shows Portugal remains vulnerable to high debt and low growth. And it shows that the calm from the ECB’s bond-buying can be broken.
Delta Lloyd sweetens investors’ bitter pill 24 Feb 2016 The Dutch insurer plans to raise only 650 mln euros through a rights issue, rather than the 1 bln euros many shareholders feared. If the firm can pull that off, its solvency headache will be eased. But owners are still being asked to cough up over half the value of the company.
China’s chip dream can survive U.S. setback 24 Feb 2016 Beijing-backed Tsinghua Holdings dropped its $4 bln investment in Western Digital after a U.S. body said it would review the deal. Officials in America and elsewhere will scrutinize China’s chip acquisitions. But barring an outright ban, the likes of Tsinghua will keep shopping.
Myanmar’s "lady" faces challenge of a lifetime 24 Feb 2016 Aung San Suu Kyi will realise a long-held dream when she takes effective charge of the Asian country on April 1. The democracy champion’s first test will be to build on rapid reforms undertaken by her predecessor. Suu Kyi also needs to act to fill a leadership vacuum around her.
JPMorgan "tech company" claim nixed by reality 23 Feb 2016 That’s what the CFO dubbed the lender at its investor day. It may employ thousands of developers and use technology better than rivals. But its business is banking. The market reaction to a predictable deferral of profit targets and an increase in energy losses reinforces that.
M&A cycle reaches "running out of ideas" phase 23 Feb 2016 Time Inc’s interest in Yahoo’s bits, a Deutsche Boerse-LSE marriage and merger talks - however unlikely – between Honeywell and United Technologies are all variations of deals that have been tried but failed for regulatory and other reasons. They may fare no better this time.
Sinophobic U.S. politics sting Western Digital 23 Feb 2016 CFIUS, the shadowy body that reviews deals on national-security grounds, is ostensibly apolitical. But the decision that scuppered a PRC firm’s $4 bln purchase of 15 pct of Western Digital looks like election-year pandering. It’s another headache for M&A sellers to contend with.