CICC swaps independence for broking fix 7 Nov 2016 The Chinese investment bank once backed by Morgan Stanley is buying retail-focused China Investment Securities for $2.5 bln in stock. CICC is paying a low price to address an important weakness in its brokerage business. The trade-off is handing majority control to Beijing.
Hong Kong tax only a breather for property bubble 7 Nov 2016 The territory nearly doubled stamp duty to 15 pct to cool surging prices. It's the toughest measure yet, but continued capital inflows from China will blunt the impact. Barring a big increase in supply, the world's least affordable housing market is likely to remain that way.
Och-Ziff turns paper-shuffling into winter sport 4 Nov 2016 The hedge fund's property arm and EPR are paying a Florida REIT $830 mln for 15 ski resorts. The deal has plenty of twists and turns, like EPR giving Och-Ziff a mortgage to fund part of the transaction. Long-term leases, though, mean the new owners can do little but groom the slopes.
Drug probe is caboose of consolidation train 4 Nov 2016 U.S. prosecutors are investigating Mylan, Allergan and others for colluding over generic-medicine prices. Lawmakers are on the case, too. But proving conspiracy is hard as barriers to entry and limited competition mean companies can raise prices in sync without acting illegally.
U.S. employers deliver an early Christmas gift 4 Nov 2016 They added a modest 161,000 new jobs last month. Wage gains accelerated, however, bringing the annual increase to 2.8 pct, the biggest since 2009. That could help lift consumer spending, an important engine of economic growth, heading into the holiday shopping season.
Review: The folly of shorting the American dream 4 Nov 2016 "Betting on Zero" dramatizes Bill Ackman's battle to prove Herbalife is a pyramid scheme that dashes most recruits' hopes of prosperity. The short-seller is still down on his $1 bln wager. But the nutrition marketer's attempts to muzzle the documentary could backfire.
Breakdown: Electionomics beyond Clinton vs. Trump 4 Nov 2016 The worlds of business and finance have other ballot-related cost-benefit analyses to consider. Hanging in the balance are the House speaker, the Senate banking chair and an important Wall Street ally. Important marijuana and Obamacare state votes also feature prominently.
Richemont earns reprieve from negative watch 4 Nov 2016 The Cartier owner's first half was less alarming than it had warned. Shedding executives and stores should bring greater focus in an era of faltering watch sales. It all lends weight to a sum of the parts analysis that implies the Swiss luxury group is undervalued.
Erste sobers up over-ebullient investors 4 Nov 2016 The Austrian lender warned of flat revenue next year, despite its presence in fast-growing European economies. Fast deposit growth cut Erste's loan margin by 5 pct in the third quarter. The bank's valuation was too rosy, but investments in digital should eventually bear fruit.
ProSieben’s golden M&A formula merits more credit 4 Nov 2016 The German broadcaster's 515-million-euro capital increase has got the thumbs down from investors. Their dilution anxiety is overdone. Judging by the group's successful 1.1-billion-euro digital M&A spree since 2014, its replenished war chest can quickly yield decent returns.
UK bonds offer scant recompense for messy politics 4 Nov 2016 Investors are keeping faith with Theresa May's government. Though sovereign yields have climbed in the past month, the shift is largely down to rising inflation expectations and fading hopes for lower interest rates. The relaxed stance leaves few buffers against political shocks.
Golden Globes make problematic prize for Wanda 4 Nov 2016 Wang Jianlin's company is already big in Hollywood. Now it is buying Dick Clark, the U.S. TV awards producer, for about $1 bln. The sellers should be happy. But Washington's Sino-sceptics may not want to see Wang rolling out the red carpet for many more entertainment firms.
Lenovo could follow Dell’s buyout blueprint 4 Nov 2016 Sales keep falling at the Chinese PC giant, and its stock has shed nearly 40 pct this year. If Lenovo's bosses and main shareholder think the market is too pessimistic about its turnaround, there is a ready-made solution: mimic U.S. rival Dell and take the $7 bln group private.
Hong Kong can stand up to Jack Ma 4 Nov 2016 Jack Ma has threatened to list the $60 bln Ant Financial elsewhere if Hong Kong won't innovate. That sounds like code for allowing something like the special sway he enjoys over Alibaba. Conceding to Ma won't fix the exchange's problems. Nor does Ant have someplace better to go.
Unblocking DoCoMo’s Tata exit is New Delhi’s job 4 Nov 2016 Turmoil at the Indian group was fueled by Ratan Tata's wish to pay the Japanese telco $1.2 bln it is owed for its stake in a JV. But retroactive regulations make honoring the payment illegal. A wily workaround would add to governance concerns. Policymakers need to fix the rules.
California voters guinea pigs in drug-price trial 3 Nov 2016 The electorate decides next week whether to cap the cost of prescription medicine. If approved, Proposition 61 may initially be hard to implement. But as with reducing car emissions and legalizing marijuana, a yes vote from the Golden State could prompt a nationwide debate.
Auto-industry hazards wreck parts-maker deal 3 Nov 2016 American Axle's stock fell 15 pct even though its $1.6 bln agreed acquisition of Metaldyne should diversify earnings and bring hefty cost savings. Debt will be high, but manageable absent a nasty recession. Investors have become understandably cautious when it comes to cars.
Viewsroom: What to watch for beyond Clinton-Trump 3 Nov 2016 Americans aren't just voting for the 45th president. House and Senate elections affect everything from Wall Street to the Supreme Court. And marijuana and healthcare figure prominently in state ballots. Meanwhile, there's more brouhaha around Brexit. And GE is shaking itself up.
The Exchange: Anthony Scaramucci 3 Nov 2016 Support for Donald Trump is thin on Wall Street. One exception is SkyBridge fund chief Anthony Scaramucci, now an economic adviser to the Republican candidate. Scaramucci explains why he's with Trump, and how it has affected his profile among the financial community.
Brexit divergence puts Bank of England in a bind 3 Nov 2016 The pound has fallen as investors brace for the economic pain of Britain’s exit from the EU. Meanwhile consumers are behaving as if nothing has changed. Rising prices will squeeze spending, leaving BoE Governor Mark Carney trapped between slower growth and higher inflation.
European bank surprises are not all unpleasant 3 Nov 2016 Deutsche Bank's vulnerability to a big U.S. fine led onlookers to tar EU peers with the same brush. As it happens, SocGen, ING and BNP all beat third-quarter expectations, and profitability pressure may have eased somewhat. The outlook is still bleak – just not uniformly so.
Whole Foods founder may have to break his own mold 3 Nov 2016 John Mackey is becoming sole boss, ending a rough six-year run for the $9 bln grocer under a co-CEO structure. Sales have been falling amid stiff competition. Starbucks and Apple proved an entrepreneur's zeal can revive a company, but Whole Foods could use radical rethinking.
Guest view: Ending easy money may aid productivity 3 Nov 2016 Where there's unconventional monetary policy, growth in worker output has fallen to worrying levels. This seems to confirm some so-called Austrian economic theories, argues ex-banker Martin Hutchinson. Reversing the trend will be painful, but could get rich nations back on track.
UK government court loss is no bar to hard Brexit 3 Nov 2016 Prime Minister Theresa May needs parliament's approval to trigger the EU exit process, judges ruled. She could win the vote even if she loses any appeal, and restricting May's negotiating position risks weakening her hand. The legal ruling is no roadblock to a damaging divorce.
Credit Suisse’s margin pains undo diet gains 3 Nov 2016 Cost control helped the Swiss bank earn 41 mln Swiss francs in the third quarter despite a hefty legal provision. Yet profitability is under pressure in Credit Suisse's wealth management and trading units. Stock-based lending losses in Asia also blot its push into the region.
Adidas can’t keep up with Olympian expectations 3 Nov 2016 The German sports brand's revenue is growing fast, and its operating margin is increasing. Still, the 15 pct rise in earnings in the third quarter fails to justify a 55 pct rise in the share price this year. Adidas doesn’t deserve a 35 pct premium to more profitable Nike.
Russia austerity budget is no antidote to low oil 2 Nov 2016 Moscow wants to freeze spending to cut the country’s deficit amidst a low oil price. Yet the three-year budget doesn’t tackle Russia’s dismal growth, or wasteful spending on damaging conflicts. And President Vladimir Putin may not stick to the cautious plan.
Bear-market patience helps Cubs break the drought 3 Nov 2016 Chicago's lovable baseball losers won the World Series for the first time since 1908. Owner Tom Ricketts bought the team for $900 mln in 2009, spent heavily when the franchise was scraping bottom, and probably tripled his money. It's a story with lessons for other investors.
Scandal in Seoul masks bigger economic problems 3 Nov 2016 A furore over a quirky confidante is buffeting South Korean President Park Geun-hye. The regularity of such crises attests to poor governance. But that's only part of a larger challenge: avoiding Japan-style stagnation despite heavy debts, weak exports and an ageing population.
Malaysia’s pivot to China is payback plus 3 Nov 2016 The country is not as desperate as the Philippines for investment. But cozying up to Beijing is one way to express gratitude for China's continued support during the 1MDB scandal. Outside funding can also help Najib meet ambitious development goals - and win re-election.