Making pilots shareholders may save Lufthansa 23 Nov 2016 The carrier's pilots are striking to get a 20-pct pay rise that Lufthansa, dogged by high costs, cannot afford. Paying them in shares might end the gridlock. The airline would save cash, and entrepreneurial spirit in the cockpit could soften the pilots' outlandish demands.
Chinese insurer’s board battle could backfire 23 Nov 2016 The mass resignation of CSG's management team after a hostile takeover by activist conglomerate Baoneng Group puts the profitable firm's fate in limbo. If Baoneng wants to prove itself as a strategic investor, it should look before leaping into boardroom battles.
U.S. visa pain could be ugly for Indian IT firms 23 Nov 2016 President-elect Trump is stacking his cabinet with immigration sceptics. It heralds a serious crackdown on visas for skilled foreign workers at a time when growth for Indian giants like TCS and Infosys is weak. Cash piles and fat margins provide only limited room to adapt.
Cox: Building walls is economically stupid 22 Nov 2016 Take a trip to Danbury, Connecticut, once the world's hat-making center, whose mayor became a poster child for immigrant bashing way before Trump made it his signature. A decade later, it's the state's fastest-growing city, thanks in large part to the folks he tried to lock up.
Snap IPO developing into a photo op 22 Nov 2016 The messaging app is laying groundwork to go public next year. At just five years old, its growth roughly matches Facebook's and Twitter's when they were the same age. Their divergent paths may worry investors, but in the big picture Snap's $25 bln valuation could be a bargain.
U.S. election resurrects Fannie, Freddie fiasco 22 Nov 2016 Shares of the two bailed-out mortgage agencies have rocketed on hopes the Trump administration might end government oversight. Big political roadblocks remain, though. Letting them keep any profit to prepare for the next crisis would be a simple and smart first step.
Hadas: Trump effects might reach to finance theory 22 Nov 2016 The next U.S. president may not be interested in the conceptual underpinnings of the risk-free rate of return. But his election could expose the idea's fundamental flaws. Financial risk is unavoidable and no asset is truly safe. Radical policies would make that painfully clear.
Record KKR buyout is fresh sign of changing Japan 22 Nov 2016 The U.S. investor plans to buy Nissan-backed Calsonic for about $4 bln. It has already persuaded other Japanese bluechips to shed non-core businesses. Still, this is both bigger and falls within the sacrosanct auto industry. That highlights a sea-change in Japanese attitudes.
EU unwise to play at banking tit-for-tat 22 Nov 2016 Brussels could insist foreign lenders trap more capital locally. There's logic from a stability point of view in forcing U.S. banks to do what European lenders already have to in New York. The risk is that American lenders don't see the EU as quite so integral to their business.
VW’s big-is-beautiful strategy is misguided 22 Nov 2016 The carmaker’s troubled core passenger-car brand is rightly cutting costs and focusing on newer technology, such as electric vehicles. Yet the gameplan unveiled on Nov. 22 repeats past errors by placing too much emphasis on how many cars are sold and too little on profitability.
Enel finds safety in disruption 22 Nov 2016 The Italian energy producer faces waning demand and tough competition. So it is trying to cut costs and attract customers by spending 4.7 bln euros on digitising the grid. That may be more than just jargon. Enel’s undemanding valuation at least gives it room to experiment.
Irish lack ammo in corporation tax battle 22 Nov 2016 Theresa May and Donald Trump’s plans to slash UK and U.S. corporation tax rates are ominous for Ireland. Cutting its headline rate further is toxic politically and would reduce a key source of revenue. It leaves Dublin reliant on EU access as competition for investment grows.
Trump crony capitalism jars with Modi’s India 22 Nov 2016 Donald Trump's meeting with Indian real estate tycoons gives the impression he's using the presidency to further his business interests. That's exactly the type of dealings that Prime Minister Narendra Modi is trying to stamp out, and more tarnish on U.S. moral leadership.
KKR burnishes establishment credentials in Japan 21 Nov 2016 Buyouts are nearly taboo in Japan and blue chips hate selling non-core businesses. So KKR's 2013 purchase of Panasonic Healthcare broke new ground. Now Mitsui, a pillar of Japan Inc, has sunk $500 mln into the healthcare firm. That further validates KKR's collaborative approach.
Facebook follows blue-chip playbook for stumbles 21 Nov 2016 The $340 bln social network launched a $6 bln buyback program as it wrestles with more ad-metric flubs, a fake-news problem and a slowing top line. Though Facebook can afford it, the timing suggests Mark Zuckerberg is addressing disruptive matters with old-school maneuvers.
Sherwood exit highlights wider Goldman transition 21 Nov 2016 The investment bank’s European co-head Michael Sherwood is retiring. A brush with bust retailer BHS, while maybe not the reason, could have hindered a possible step up to CEO. In any case, Europe and fixed income, his other area of expertise, face uncertain futures.
Energy Transfer lands investors in another tangle 21 Nov 2016 A Sunoco pipeline group wants to buy Energy Transfer Partners for $20 billion. ETP's parent Energy Transfer Equity tied itself in knots trying to buy rival pipeline operator Williams last year. The sour reaction to the latest deal suggests ETP may also be headed for trouble.
Credit markets ill-prepared for Trump presidency 21 Nov 2016 The U.S. president-elect may boost spending and growth. But higher interest rates would also push up funding costs for companies and emerging economies. Though credit investors have largely shrugged off Trump’s victory, the end of loose monetary policy could prove a shock.
Elliott hack sparks $2.3 bln cyber security deal 21 Nov 2016 The activist firm has pushed LifeLock into selling to Symantec after putting up a bid itself. Elliott also owns a stake in the buyer. The merger stacks up financially but doesn't resolve the murky future of the newly enlarged security specialist.
Wells Fargo ushers in next stage of banking shame 21 Nov 2016 The lender embroiled in a fake-accounts scandal now needs regulatory approval to hire and fire execs and directors. The OCC is playing catch-up with the SEC and others. But targeting Wells is the strongest signal yet that watchdogs have new ways to crack down on recidivist firms.
Trump voters may settle for less than his students 21 Nov 2016 The U.S. president-elect agreed to pay $25 mln to resolve accusations that his education venture was a scam. Averting trial lets Trump focus on picking his advisers and policies. Early choices suggest Americans who backed him will feel duped, too – and have almost no recourse.
U.S. banks less worried by too-big-to-fail stigma 21 Nov 2016 Regulators' annual ranking of systemic lenders shows Citi, Bank of America and Wells Fargo have become riskier, while the likes of HSBC and Barclays have pulled in their horns. The shift implies American stress tests are a bigger constraint on capital ratios than global lists.
Britain’s brave new world hits post-Brexit reality 21 Nov 2016 Prime Minister Theresa May wants capitalism to work for the little guy. But in a speech to UK business she softened ideas like putting workers on boards, while promising low corporate taxes. Pressure to rein in the deficit and migration leaves less room for policy innovation.
French far right can make hay if Fillon shines 21 Nov 2016 Unabashed economic reformer Francois Fillon has a good chance of becoming the opposition centre-right's presidential candidate. His proposals risk alienating swathes of voters and give far-right leader Marine Le Pen a better chance of capitalising on her statist manifesto.
Aussie bet on U.S. building boom stacks up 21 Nov 2016 Building materials firm Boral is buying peer U.S. Headwaters for $2.6 bln. Savings easily cover the premium paid. The timing could prove savvy if president-elect Trump delivers an anticipated boost in infrastructure spending and a broader lift to the housing market.
China can’t dodge Asia trade leadership role 21 Nov 2016 Asian nations, dismayed by American disarray on free trade, are warming up to China-backed alternatives to the U.S.-led TPP. Beijing says it doesn't want a "leadership role" in forging new pacts. Given China's recent overtures with its neighbours, that sounds like false humility.
Merkel can win new term, but won’t finish it 20 Nov 2016 The German chancellor's decision to run for re-election in 2017 is a gesture of much-needed stability. Angela Merkel is likely to win despite the rise of the right-wing AfD party. After that, her best bet is to quit while she is ahead.
Trump’s four phases will guide next four years 18 Nov 2016 The reality-TV star is upending the global order in real time. As CEOs, world leaders and investors try to interpret what's in store, a new Breakingviews e-book chronicles Trump the businessman, candidate, populist and president-elect. Who he surrounds himself with is paramount.
Fake-news vortex envelops Corporate America 18 Nov 2016 Facebook's Mark Zuckerberg is no longer alone with the problem. In the days after the U.S. election, New Balance, Pepsi and Ford have been caught out by the spread of bogus information. Donald Trump's willingness to distort the truth creates a boardroom risk that is all too real.
Review: A prophet for the age of endarkenment 18 Nov 2016 John Gray foresaw the Trump era. "Enlightenment's Wake", published in 1995, predicted that grand ideas would be replaced by ethnic and religious conflict, authoritarian regimes and great power rivalries. Still, the newly-relevant book offers some hope for despairing liberals.