Qualcomm lawsuit is test of its China standing 27 Jun 2016 Less than two years after a record antitrust settlement with Beijing, the U.S. chip giant is suing a local handset maker for breaching patent agreements. It's a big gamble on China's legal system. The outcome will set the tone for the market where Qualcomm earns half its revenue.
Energy Transfer finds better to be lucky than bad 24 Jun 2016 The U.S. pipeline operator can wriggle out of its disastrous $20 bln takeover of rival Williams. A Delaware judge says a botched tax interpretation by lawyers was a genuine mistake, not part of a scheme to prevent the deal from closing. There may yet be a price to pay, however.
Review: “Gray Rhino” rambles into financial lexicon 24 Jun 2016 A new book uses the nose-horned beasts as a metaphor for obvious threats ignored by corporate and political leaders. Myriad examples enlisted by author Michele Wucker are engaging, but the solutions come off oversimplified. The gray rhino may not keep pace with the black swan.
Bank shares take a bit of a random Brexit walk 24 Jun 2016 Globally, they’re down about 8 pct. Local pain explains Lloyds and Bank of Ireland. Sovereign debt exposure is a problem for Intesa Sanpaolo and others. Santander has a Spanish election to worry about. The likes of BofA and SocGen, though, seem swept up in a sea of confusion.
Qunar’s cut-price buyout might just fly 24 Jun 2016 The travel agent is the latest U.S.-listed Chinese group to get a buyout proposal from back home. A 15 pct premium to a depressed stock price is hardly generous. But if major shareholder Ctrip can be persuaded to hop aboard, this deal could work.
Lesson from Brexit: unthinkable isn’t unpriceable 24 Jun 2016 Britain’s referendum decision is an unwelcome blow to an already fragile world economy, but the real change is that it forces companies and investors to reconsider other once-remote risks. A Donald Trump presidency or the break-up of the euro zone may deserve more consideration.
Brexit fails to deter Henkel’s lust for detergent 24 Jun 2016 Amid the worst market meltdown in ages, the German consumer goods giant is forking out $3.6 bln for U.S. home-care rival Sun Products. The price is rich and the timing bold. But at least today Henkel looks smart to lower its European exposure and transform its position in America.
Cameron exit sends UK towards investability vacuum 24 Jun 2016 Prime Minister David Cameron says he will resign. He and his finance minister, George Osborne, stood for competent economic management and stability. Britain lacks obvious replacements who have experience as well as mass appeal. The economy and UK assets will pay the price.
How Europe can contain damage from Brexit 24 Jun 2016 There are two ways for the EU to avoid copycat referendums. One is to doggedly insist that free movement and free trade are inseparable. The other is to flex that ideal. Doing so could neutralise populism and avoid a breakup of the euro zone.
UK stocks brace for self-inflicted recession 24 Jun 2016 Shares in banks and homebuilders fell sharply as investors reacted to Britain’s referendum vote. As leveraged bets on the domestic economy, the selloff reflects fears of a contraction. But at least lenders are now better equipped to deal with financial turmoil than a decade ago.
Breakup of the UK is question of when, not if 24 Jun 2016 England saw 53 pct of voters opt to leave the EU, but in Scotland and Northern Ireland, a majority wanted to stay in. A second referendum on Scots leaving the UK now looks logical, while a united Ireland poll has been mooted. Economic issues will stop these occurring soon.
Britain has written a cheque it cannot cash 24 Jun 2016 The public wants to exit Europe. Political upheaval is likely. Beyond that, Britain’s future ties with the EU depend on whether it enters negotiations feeling economically strong or weak. But the victors will struggle to deliver on promises, and the country is deeply divided.
Market meltdown to test discredited central banks 24 Jun 2016 Asset price turmoil unleashed by Britain’s vote to leave the EU is a foretaste of things to come. Policymakers have their work cut out to pour oil over such troubled waters. Rate-setters have singularly failed to revive inflation despite their best efforts.
Cox: How about a referendum on ending referendums? 23 Jun 2016 Rather than take hard decisions, politicians are putting issues like Brexit, constitutional reform and even peace treaties directly to the people. How democracy works best is an ancient debate, but plebiscites undermine the representative variety. They’re also bad for business.
America is squandering a big immigrant investment 23 Jun 2016 Nearly $10 bln gets spent each year educating undocumented children legally in public schools. Two valedictorians and a Supreme Court ruling shine a light on the human capital being wasted. With employers braying for skilled workers, fixing this policy could deliver big returns.
Twilio IPO gallop suggests unicorns can run free 23 Jun 2016 The U.S. software firm debuted even as Brexit, interest rates and other global concerns have stalled most new listings. A 75 pct pop in the shares gave the fast-growing but unprofitable enterprise with lousy governance a $2.2 bln value. Silicon Valley’s hold on investors endures.
Stars may finally align against buyout-baron taxes 23 Jun 2016 A group of self-proclaimed “patriotic millionaires” wants to close a loophole that allows private-equity partners to pay lower taxes on investment profit. Clinton and Trump both back the idea, too. Though efforts in Congress have failed for years, fresh momentum is building.
Swedish solvency scuffle ominous for EU bank peers 23 Jun 2016 Sweden’s regulator has played down a report that Nordea faces a $9.8 bln capital hole. But fears of solvency standardisation still riled investors, who had assumed watchdogs were rolling over. With global standard-setters mulling “capital floors”, expect more discombobulation.
Spanish election offers only weak choices 23 Jun 2016 The second round of elections since December will either produce a weak centre-right minority, or hard-left coalition. Neither is what the economy needs, but the second would make investors far more nervous.
Tesco finds chink in cheap rivals’ armour 23 Jun 2016 The UK grocer delivered a second consecutive quarter of like-for-like sales growth. Its new strategy? Sell low-priced produce but brand it as if it were expensive. Simple as it sounds, shoppers are duly buying more goods. Tesco is finally getting to grips with its competition.
UK banks have range of Brexit shock absorbers 23 Jun 2016 British lenders can weather the storm if Britons vote to leave the EU. Banks will no doubt be hit should the economy slow. But it’s harder for them to go bust than it was in 2008. They have bigger liquidity backstops to cope with any bank run - and so does the Bank of England.
Britain’s EU vote: a guide for the perplexed 23 Jun 2016 The UK is voting on whether to leave the European Union. In many ways, Britain is already a euro-anomaly. No matter which way the public votes, the referendum will leave scars, and usher in big changes that go beyond the EU’s borders – whatever shape those may take.
Australia’s rebalancing act can survive politics 23 Jun 2016 Rival parties campaigning for election on July 2 are short on solutions to eliminate the country’s fiscal deficit. But with net debt at just 18 percent of GDP and enviable growth, the next government will have room to manoeuvre. The pivot from mining to services is well underway.
India prizes fiscal prudence over corporate debt 23 Jun 2016 A share buyback by a state-owned miner and an auction of telecom spectrum suggests companies may have to borrow to help the government meet its deficit targets. New Delhi seems intent to meet its pledge to raise $23 billion for the state coffers - even if it upsets India Inc.
Musk’s clean-energy deal runs on fossil governance 22 Jun 2016 The entrepreneur may see possibilities from uniting Tesla and SolarCity that others are missing. They seem, though, to share little beyond big ambitions, cash outflows and stakes owned by Elon Musk. Easier to spot are similarities to a dreadful mining and oil merger from 2012.
White House wannabes slip through safety nets 22 Jun 2016 America’s healthcare fund for the elderly will run out two years sooner than expected while Social Security resources are depleting fast, too, new research finds. Retirement savings already fall well short. These subjects are amazingly missing from the presidential campaign.
Facebook’s indie owners send upside-down message 22 Jun 2016 Shareholders not named Mark Zuckerberg gave more likes than frowny faces to just three members of the board. Puzzlingly that included Gawker-hunter Peter Thiel and not key executives like COO Sheryl Sandberg. It’s a head-scratcher probably explained by investors ticking boxes.
“Bremain” Italy trade only for the fleet of foot 22 Jun 2016 Forget the pound, Italian debt could be a beneficiary if Britons vote to stay in their EU referendum. Fears over a European breakup should abate, and less money will flow into safe heavens like German debt. The snag is that Italy itself is a cauldron of political risk.
Saudi Arabia opens door to OPEC fightback 22 Jun 2016 The kingdom’s new energy minister just implied it may resume its role as the world’s swing producer. Oil prices have suffered since it stepped back in 2014. If Saudi wishes it - and OPEC’s recalcitrant members play ball - a production cut will be back on the cards.
EU rethink of bank debt better late than never 22 Jun 2016 The European Commission wants to harmonise rules for bank bail-inable debt. The current patchwork of different national regimes is confusing and impedes resolution. A single model would be simplest, but could limit flexibility. At the very least more standardisation is desirable.