Credit Suisse beats Deutsche despite rotten year 29 Jun 2016 The banks' stocks are down 50 pct since they switched leaders last July. Deutsche boss John Cryan had the harder task. But while Credit Suisse's Tidjane Thiam botched an investment bank revamp, geographic and business mix suggests he's more likely to restore shareholder value.
Kuka shows bargaining power of China’s M&A targets 29 Jun 2016 Foreign companies with prized technology can demand much more than a fat premium from Chinese bidders. That is the message from Midea's extensive binding agreement to keep the robotics maker's headquarters, factories and jobs in Germany for the next seven and a half years.
Local brands lead race for China’s savvy consumers 29 Jun 2016 From shampoo to snacks, upstart Chinese companies are challenging foreign rivals, a new report shows. They heed digital trends, adapt to local tastes and respond to customers' increasingly sophisticated demands. Western firms that don't follow their lead risk being left behind.
Lending Club financial innovations skipped culture 28 Jun 2016 The cratered online loan marketplace says its founder and ex-CEO inflated loan volumes on top of other failings. Only 18 months after its IPO, the supposed disruptor is retrenching. To move fast and break things is risky in finance – especially so when mixed with self-dealing.
McKesson finds skilled surgeons to revive tech arm 28 Jun 2016 The $40 bln drug distributor is carving out its languishing healthcare IT business and merging it with one owned by LBO firms Blackstone and Hellman & Friedman. Cost cuts and attentive management should help make it more valuable. Only excessive debt might impede a full recovery.
America’s top cops can still take a bite out of VW 28 Jun 2016 The German carmaker will pay a record $15 bln for its emissions scandal. It’s a lot of money but in line with regulatory tallies. But a criminal case is still pending that offers to test the Department of Justice’s pledge to better hold individuals liable for company misconduct.
SolarCity governance torched by bid mini-committee 28 Jun 2016 The clean-energy company could find only two directors independent enough to assess Tesla’s $2.8 bln takeover offer. And one of them is a venture capitalist whose firm has backed Elon Musk’s companies. This lack of proper board engineering shortchanges SolarCity shareholders.
Chancellor: Brexit can make a stronger, fairer UK 28 Jun 2016 The British elected to pop the UK’s bubble economy, which delivers appalling productivity growth and unequally distributed gains. Turmoil unleashed by the vote could put the economy on a sounder footing. As asset prices deflate, the distribution of wealth becomes less unequal.
Lyft mulls trip out of capital destruction 28 Jun 2016 The $5.5 bln ride-hailing app has hired Frank Quattrone’s Qatalyst – an adviser with a knack for selling tech firms at hefty premiums. With rivals Uber and Didi raising and burning billions in an attempt to gain control of markets, M&A discretion may prove wiser than valor.
Bank stress exams may test investor patience 28 Jun 2016 Results are due this week from the Fed on how 33 financial institutions performed in a simulated bad economic downturn. Countercyclical factors included this year could mean even banks that ace the tests will be required to keep more profit rather than pay out bigger dividends.
After Dieselgate, VW faces new big bad 28 Jun 2016 A $15 bln settlement with U.S. regulators all but buries the German carmaker’s emissions fraud. Now for the next crisis: falling sales. Since Britain plunged Europe into uncertainty, markets have priced in a 13 pct drop in 2017 earnings. That calls for zealous cost-cutting.
Football apart, UK has no reason to envy Iceland 28 Jun 2016 The Nordic nation outshone England on the pitch but its EU trade ties are nothing to emulate. It has the single market access that Britain already enjoys, only without any say over the rules. Nor can it dodge the free movement of people or contributions to the bloc’s budget.
Post-EU Britain could address North-South divide 28 Jun 2016 Ditching EU state aid rules means Britain can in theory set different corporate tax rates around the country. That could ease regional economic disparities - a key flashpoint from the referendum. The catch is such a move would require a cleaner break with the single market.
Nestle no closer to the medicinal Kit Kat 28 Jun 2016 The Swiss consumer giant’s new boss spent the last decade running medical company Fresenius. It’s a nod to the convergence between food and healthcare. But it makes more sense when the transfusion runs the other way. Nestle’s unhealthy governance, meanwhile, remains untreated.
Steel deal will test China’s reform mettle 28 Jun 2016 Combining Baosteel and Wuhan Steel would create a global giant. If cost and capacity cuts followed, that would underline how serious China is about industrial reform, and suggest a flood of cheap exports could recede. For now, though, it’s easy to be sceptical.
China has more to lose from Western turmoil 28 Jun 2016 As voters in developed countries reject globalisation, Premier Li Keqiang has called for more international economic cooperation. That makes sense: rising protectionism and resistance to foreign investment will hurt Chinese business and exacerbate its own economic slowdown.
China’s innovators set to ratchet up patent wars 28 Jun 2016 Homegrown firms have been busy building a war chest of patents. A recent ruling in Beijing against a design of Apple’s iPhone suggests local tech rivals are increasingly willing to wield them too. As competition for market share heats up in China, more skirmishes will follow.
Trump and UK’s Leave campaign are peas in a pod 27 Jun 2016 Like the Brexiteers, the presidential nominee says things often disproven by facts. He makes promises without plans to enact them. When these prove unworkable, there’s regret and backtracking. By invoking NATO’s future, the stakes may be as high or higher for a Trump victory.
Guest view: U.S. inaction on Puerto Rico risks chaos 27 Jun 2016 The island territory can no longer make debt payments, its economy is in free fall, foreclosures are surging and citizens are fleeing, says Moody’s Analytics Chief Economist Mark Zandi. To avoid a humanitarian crisis, the Senate needs to pass the PROMESA act without delay.
Britain was lost on the playing fields of Eton 27 Jun 2016 The school’s alumni include outgoing Prime Minister David Cameron and Boris Johnson, who hopes to replace him. The Duke of Wellington supposedly attributed his victory at Waterloo to an Eton education. Cameron’s folly in calling an EU referendum suggests less desirable aspects.
“Frack Master” suit is a sign of bezzle shrinkage 27 Jun 2016 The U.S. SEC says Chris Faulkner inflated his shale-oil company’s prospects, then blew $80 mln of investors’ money on dodgy expenses. Hard times tend to reveal bad boom-era behavior. The oil patch’s lax governance makes it an obvious place for regulators to hunt for culprits.
Sterling destined for more measured misery 27 Jun 2016 After voting to quit the EU, Britain faces an economic slowdown that will warrant more monetary easing, a pickup in inflation, and huge political uncertainty. It’s a toxic mix for any currency. Spectacular plunges in the pound will give way to steady falls to new lows.
Austerity has no place in post-Brexit Britain 27 Jun 2016 Chancellor George Osborne has since 2010 aimed to cut public debt and deficits in the name of financial stability. He may now need to row back to cope with any post-vote economic slowdown. Investors’ reaction so far suggests his fiscal rigour was over-zealous in the first place.
The City’s future is in lap of EU gods 27 Jun 2016 Britain’s Leave vote could strip so-called passporting rights from domestic banks and asset managers. One solution is to claim the UK merits equivalent status as its rules match Europe’s. But even if euro peers okay that, London will lose control over future policy-making.
UK profit pain to spread beyond airlines, housing 27 Jun 2016 Warnings by British Airways’ owner IAG, easyJet and Foxtons show the referendum shock is already hitting some sectors hard. Yet travel and housing are both leading indicators for the wider economy. Investors can brace for worse, and safe havens are in short supply.
Spanish politics a little less muddled 27 Jun 2016 The ruling conservatives won Spain’s second election in six months, with more seats but still short of an outright majority. The socialists held second place above radical Podemos. What comes next is horse-trading, but the wane of populist parties is a positive for investors.
Italy best to avoid sneaky bank bailout 27 Jun 2016 The chaos from Britain’s vote to leave the EU could be a prime opportunity for Italy to dodge European rules on recapitalising lenders. Yet such a move might undermine the idea that creditors not taxpayers should stomach losses, and weaken the region’s half-baked banking union.
Dixon: Follow Merkel on Brexit – and keep cool 27 Jun 2016 While other EU leaders are pressing Britain for a quickie divorce, the German chancellor is advocating a more measured approach. This is right. There’s no need to rush as the EU can protect itself from the immediate fallout. There’s even a chance the UK could change its mind.
Japan could use British fallout as spur for action 27 Jun 2016 Market ructions are once again undermining Japan’s economic revival. That could help drive bolder reform, more state spending and looser monetary policy. Officials could even resort to selling yen. Amid so much uncertainty, though, it would be wise to keep some powder dry.
Europe exit dulls Britain’s appeal to Asia Inc 27 Jun 2016 Asian companies have typically viewed the United Kingdom as a stable and open market. Now they must grapple with a weak sterling, political chaos, and likely recession. Until they have more clarity on the terms of future trade with the European Union, investment will suffer.