Closing jaws of China cash trap bad news for MNCs 5 Dec 2016 Multinationals in China can bring money in any time they like, but it may never leave. Tightening capital controls will be a major problem for foreign companies in mature sectors, especially for U.S. firms planning to remit profits if Trump cuts taxes on offshore earnings.
Italy’s vote is for uncertainty but not for crisis 4 Dec 2016 Matteo Renzi resigned as prime minister after losing his constitutional reform referendum. The immediate challenge facing his successor is to make sure banks in need of capital still get it. Longer term, Italy will hobble on without the change-minded strong government it needs.
Austria’s “nein” to far-right buys time for reform 4 Dec 2016 The presidential election ended in a clear defeat for Norbert Hofer's Freedom Party. Chancellor Christian Kern has just under two years to deliver a "new deal" including lower tax and more infrastructure spending. His right-wing opponents have taken a knock, but remain strong.
Financial startups may soon storm gate 2 Dec 2016 New ventures like SoFi and Betterment could become banks under a new charter regime. The OCC's plan initially may please established lenders by leveling the regulatory field. It also, however, should help upstarts breach the industry's last line of defense: cheaper funding.
S&P’s sleight of hand is South Africa’s gain 2 Dec 2016 The credit ratings firm has downgraded the sub-Saharan state's local currency bonds but spared its foreign debt. This allows South Africa to escape junk status for the time being. Almost as important, there's no excuse now for firing respected finance minister Pravin Gordhan.
CEOs don’t deserve bonuses just for going shopping 1 Dec 2016 Activision's Bobby Kotick will receive an extra payout for doing a "transformative" deal. Investors have to benefit, but only for a limited time. Sensible M&A is part of what CEOs are already paid for. There's no need to reward them twice – or to encourage risky acquisitions.
Chess: a 1,500-year-old startup that doesn’t scale 2 Dec 2016 A fresh push to popularize the game at this year's championship between Magnus Carlsen and Sergey Karjakin faltered. Pay-TV won't woo fans who can watch board movements for free and broadcasts are too technical for novices. Poor governance and few sponsors are hindrances, too.
Richmond sharpens up Britain’s Brexit divide 2 Dec 2016 The victory of a pro-EU liberal in a UK local election hints at a potential swing back to the centre. Stronger opposition could keep the government honest as it negotiates Brexit. Yet Richmond is wealthy, and voted strongly to stay in Europe. More clarity doesn't mean more unity.
Hollande’s problem was bigger than Hollande 2 Dec 2016 France's president saved his ruling Socialist Party from electoral annihilation by saying he won't seek a second term. His flaws had become obvious. But whoever seeks the country’s highest office faces the same challenge of reconciling modernisers with those opposed to reforms.
South Korea can offer roadmap to cashless Asia 2 Dec 2016 The country wants to go coinless by 2020. That sounds achievable. Electronic payments are already commonplace in one of the most wired nations in the world. It’s the latest currency experiment in the region that offers valuable lessons for a continent hooked on cash.
Review: China’s doomed anti-corruption campaign 2 Dec 2016 Tales of Chinese officials enriching themselves are so prevalent they no longer astonish. President Xi Jinping's anti-corruption campaign has penalised bad behaviour. But in "China's Crony Capitalism", Minxin Pei argues that state ownership makes any sustained crackdown futile.
Starbucks brews a stronger succession plan 1 Dec 2016 CEO Howard Schultz is stepping back to serve as chairman and help roll out upscale coffee shops. Since returning to run Starbucks in 2008, the shares have gained 550 pct. New boss Kevin Johnson faces fresh challenges, but the company's mission and tech nous give him a hot start.
Trump’s AC activism more hot air than cold jobs 1 Dec 2016 The president-elect is touting a deal to keep over 1,000 jobs at heating and aircon maker Carrier in Indiana, after blasting a planned move to Mexico during his campaign. It's a partial win that cost a state subsidy. Trump will milk the PR, but as policy it won't easily scale.
Wells spotlights rivals’ chairman-CEO double duty 1 Dec 2016 Under investor pressure, the $280 bln U.S. lender has formally separated its top jobs. It's no sure way to avoid crises like Wells' fake-accounts scandal. But better governance and performance tend to go together. Peers combining the roles, like BofA, now have explaining to do.
U.S. housing revival remains under construction 1 Dec 2016 Home prices just surpassed their 2006 peak, boosted by more buyers amid tight supply. Further gains could be tough – or slow. Rising interest rates and privatizing the government agencies that back mortgages, as Trump's Treasury nominee wants to do, could impede affordability.
Viewsroom: Is Trump’s dealmaking already working? 1 Dec 2016 The president-elect brought in a rare bipartisan player as Treasury secretary, Steven Mnuchin and saved 1,000 jobs in Indiana. But bigger economic challenges await. And he has yet to solve his business conflicts. Elsewhere, Dallas' pension woes put a $4 trln industry on notice.
Starboard takes tricky tack with Rockwell deal 1 Dec 2016 The activist wants the aircraft-parts maker to consider ditching a $6.4 bln tie-up with B/E Aerospace. Grounding the merger has merit, but Carl Icahn and others have had mixed results agitating against M&A. A Trump-inspired rally in Rockwell's stock complicates Starboard's case.
Daily Mail submits a vague New Year’s resolution 1 Dec 2016 The UK tabloid's parent wants to slim down a portfolio which spans media, events, education, and property information. Weak advertising makes a new svelte form a priority. But if boss Paul Zwillenberg doesn't offer more detail the pledge could end like many post-Christmas diets.
Politics hampers delivery of good postal bid 1 Dec 2016 Belgium's Bpost has made a final offer of 2.5 billion euros for Dutch rival PostNL. The deal is a play for the fast-growing parcel business. With the target's shares trading below the offer, Dutch government opposition may scupper delivery of a good deal for investors.
Europe’s long weekend presents a triple threat 1 Dec 2016 In the space of just 48 hours Italy's premier will face a make-or-break referendum, Austria could elect a far-right president, and Greek debt talks will reach a head. All three have the potential to revive the centrifugal forces that could send Europe spinning out of control.