RBS’s grand relaunch in danger of running aground 5 Aug 2016 Since CEO Ross McEwan took over in 2013, the state-owned UK bank has been slowly sorting its issues. But Brexit, low rates and ongoing high conduct charges are big problems. Throw in new losses from the tortuous Williams & Glyn disposal, and RBS looks hobbled for years to come.
Novo Nordisk premium will survive drug wars 5 Aug 2016 The Danish pharma group's shares fell more than 8 percent after it lowered profit and sales guidance and warned of lower prices in the key U.S. insulin market. Such pressures won't abate. Still, in a growing market, Novo warrants a premium over peers. Just a less hefty one.
Hugo Boss offers preview of luxury retrenchment 5 Aug 2016 The German brand's new CEO is cutting 20 stores and 50 million euros of costs to deal with falling sales. While second-quarter revenue beat expectations, net profit fell 84 percent. Hugo Boss's peers will also face a painful reckoning after their own rapid expansions.
Egypt’s IMF cure poses health risk for Middle East 5 Aug 2016 The most populous Arab state wants a $12 bln IMF deal, but not the harsh austerity sometimes attached. Funding would boost the economy, but reforms could also stoke unrest. In a country at the centre of uprisings that swept across the region six years ago, that's no small risk.
Evergrande share raid cements love-or-hate status 5 Aug 2016 The Chinese developer has waded into the power struggle at rival Vanke, grabbing a 4.7 pct stake for $1.4 bln. The motive is unclear, and the group's leverage and sprawl should worry investors. Yet Evergrande's aggressive stance still appears to have plenty of fans.
Mixed messages will hamper China’s SOE mergers 5 Aug 2016 Consolidation is picking up amongst state-owned enterprises. Executives running enlarged companies have to meet a plethora of contradictory goals to keep their Communist Party bosses sweet. The confusion means China's state-run giants could end up pleasing no one.
Golf retreat helps incumbents win a declining game 4 Aug 2016 Nike followed Adidas in getting out of making drivers, putters and the like. That gives rivals Callaway and Titleist, whose parent is going public, a short-term opportunity to boost market share. But a decade-long slump in the sport’s participation still obscures the fairway.
Fox, Viacom heirs mop up messes of the patriarchs 4 Aug 2016 James and Lachlan Murdoch are coping with the aftermath of Fox's lascivious TV boss Roger Ailes. Shari Redstone is trying to oust ineffective Viacom CEO Philippe Dauman. The next generation is wrangling with rogue execs who once had the ears of their fathers, Rupert and Sumner.
Economic models compete for Olympic gold 4 Aug 2016 The Goldman Sachs forecast is in: the United States will win the most medals in Rio, with China next and Brazil outside the top 10. Breakingviews put Russia second and predicts a much better result for the host nation. It's all games, but macro factors do drive sporting prowess.
UK’s new bank crutch betrays post-Brexit jitters 4 Aug 2016 The Bank of England's Term Funding Scheme is a reasonable attempt to make UK lenders pass on now-cheaper funding. The bigger their loan book, the cheaper their borrowing. But opting not to restrict cheap funds to specific sectors reveals how concerned the BoE is about a slowdown.
Chancellor: Rates sow seeds for greater inequality 4 Aug 2016 Unorthodox monetary policy may have stopped a depression forming after the Lehman Brothers bust but it has had adverse distributional effects. If central bankers continue pushing the cost of money lower, they risk further undermining the social order on which capitalism rests.
Mark Carney’s sledgehammer isn’t up to the job 4 Aug 2016 The Bank of England boss deserves credit for trying. He has halved the policy rate, will resume asset purchases, and done his absolute best to limit the perverse effects of ultra-low rates. But the economic shock of Brexit is probably bigger than anything his toolbox can handle.
RSA and Aviva have hedge against Brexit gloom 4 Aug 2016 Both UK insurers can dodge post-EU referendum blues. Falling rates pose a risk to their half-year positions, but operations are solid and sterling's slide helps groups with big overseas earnings. Losing EU market access is also less of a threat than it might appear.
SAF-Holland lacks firepower in truck bidding war 4 Aug 2016 The truck parts maker’s $490 million offer for Swedish peer Haldex was trumped by Germany’s ZF Friedrichshafen, which offered just 6 percent more. SAF is already stretching itself and will struggle to outbid a much bigger rival that has the target’s support.
Renzi’s MPS gamble works win or lose 4 Aug 2016 The Italian premier chose not to haircut the bank's debt for fear of losing a crucial referendum. The alternative - raising over six times MPS' market cap - is hard, but not impossible. If the rights issue fails, Matteo Renzi still wins: it parks the issue until after the vote.
Hong Kong’s special status is in need of renewal 4 Aug 2016 The former colony has mostly thrived in the 19 years since China took charge with a promise to leave it alone until 2047. But society is divided and the rule of law under strain. Without reassurances about its long-term future, Hong Kong faces an exodus of citizens and companies.
SoftBank takes maverick option on financing 4 Aug 2016 Selling $10 bln of hybrid bonds would build on SoftBank's cachet with retail investors. It could also help keep headline debt levels in check after the $32 bln bid for ARM. But this is hard to square with boss Masayoshi Son's belief that he knows better than rating agencies.
Fiat supplier sale talk nails Marchionne’s dilemma 3 Aug 2016 Offloading Magneti Marelli to Samsung Electronics might raise $3 bln. But it would shrink earnings while leaving a truckload of debt, just as the profitable U.S. car market may be peaking. Tinkering won't for long distract the Fiat Chrysler CEO from bigger goals - like a merger.
Wal-Mart has long unicorn ride in Amazon chase 3 Aug 2016 The $220 bln retail titan is reportedly in talks to buy Jet, a fledgling online-shopping site. Wal-Mart has been accelerating acquisitions of tech startups in a bid to beef up digital efforts. Amazon, however, keeps moving ahead with efforts like one-day shipping and groceries.
Biogen is a risky $90 bln buyout target 3 Aug 2016 The biotech giant could be available, with its CEO stepping down, and potential acquirers are circling. Closing the gap between the Alzheimer's drug optimism built into Biogen's valuation and an acceptable price for a buyer may, however, prove a challenge too far.
Standard Chartered thrives on low expectations 3 Aug 2016 The UK bank will take longer than planned to hit pretty modest return targets. Yet shares surged. Relief that the turnaround is on track and a bombed-out valuation explain why. If it can sell $7 billion of toxic assets for a good price, investors may even be pleasantly surprised.
Note to D.C.: Jack-hammer away on infrastructure 3 Aug 2016 With interest rates at record lows, there's growing support on the campaign trail for rebuilding U.S. roads and bridges. Donald Trump called for at least doubling the $275 bln in spending proposed by Hillary Clinton. To grow jobs, wages and GDP, it's a policy deserving of a deal.
Time Warner as sous-chef may enhance Hulu broth 3 Aug 2016 The media conglomerate bought a 10 pct stake in the digital-TV service at a $5.8 bln valuation. Hulu gets Time Warner programs but not another board member at a table crowded by rivals Disney, Fox and Comcast. This sort of arrangement may give the JV a better shot at success.
Deutsche Post 2020 goals face delivery challenge 3 Aug 2016 The German logistics group is playing catch up. Results surpassed analysts' expectations for the second quarter in a row. Yet CEO Frank Appel's ambitious medium-term operating profit targets are still a stretch after 2015 setbacks. He will have to run faster to deliver on time.
EU banks give notice that they’re not all hapless 3 Aug 2016 Dutch lender ING and French peers Societe Generale and Credit Agricole all increased second-quarter earnings. Stake sales in Visa Europe helped, and low interest rates hurt in French retail banking. But it’s a reminder that recent EU bank stress tests had a positive message too.
Rio Tinto’s best is not yet good enough 3 Aug 2016 The Anglo-Australian miner has slashed debt but can't take its eye off the ball after posting its worst earnings in 12 years. No wonder Rio is trading at a discount to peers. New boss Jean-Sebastien Jacques is paying out dividends, but has his work cut out to win over investors.
Struggling HSBC has grounds for its payout pledge 3 Aug 2016 The UK bank is holding its dividend and buying back shares, despite scrapping a timetable for hitting an RoE target in a world of lower-for-longer rates. A sky-high dividend yield would usually imply an imminent payout cut. But stronger capital gives HSBC grounds to hold firm.
Tax overhaul boosts Modi’s reform credentials 3 Aug 2016 India is set to pass a bill paving a path to a long-awaited goods and services tax. Exemptions will dilute the potential boost to growth. But the bill is evidence that the prime minister can compromise to get things done. That bodes well for a long wish list of other reforms.
China’s draconian IPO rules squeeze foreign banks 3 Aug 2016 Local media say the securities watchdog may seize licences from brokerages that don't properly audit firms that come to market. Other recent rules leave underwriters exposed to botched listings. That might help cut the IPO backlog. It also further sidelines foreign banks.
Cox: Trump’s taxes underscore bizarre campaign 2 Aug 2016 The GOP candidate is being goaded reality-TV style by Warren Buffett and Mark Cuban to disclose his IRS returns. At stake isn't just whether he paid enough as with Mitt Romney. Rather, Trump's billionaire bona fides are in question despite an election pegged on income inequality.