Sports Direct undercuts exec pay ideals 6 Jan 2017 The retailer’s bosses receive an apparently model mix of low salaries and performance-based awards. The former CEO’s fixed pay was less than a twentieth of Martin Sorrell’s at WPP. Yet an exemplary pay mix has failed to deliver either shareholder returns or good governance.
Toyota tantrum may mark peak Twitter-Trump 5 Jan 2017 The president-elect got his facts wrong tweet-threatening tariffs if the carmaker sells Mexican-made Corollas in the US. Hence the stock's limited reaction. A contrasting crash in Constellation Brands shares shows investors starting to focus on more concrete cross-border issues.
It’s past time for Japan to tackle overwork 6 Jan 2017 A suicide at a top advertising firm shines an ugly spotlight on Japan's dangerously long hours. Relaxing a culture of workaholic conformity won't be easy. But official plans to curb overtime are a good start. And a better work-life balance would bring real economic dividends.
Samsung hits a sweet spot in new technology cycle 6 Jan 2017 The world's biggest smartphone-maker expects fourth-quarter operating profit to top $7.7 bln, smashing expectations. As more devices move to new-generation memory chips and displays, Samsung's early investments in those areas are starting to pay off. That bodes well for 2017.
Amazon may hold Trump card in retail mess 5 Jan 2017 The e-commerce giant is mulling a bid for bankrupt American Apparel as Macy's and others lose sales and staff. CEO Jeff Bezos would bag a clothing brand to help his fashion ambitions and show a president-elect suspicious of Silicon Valley that he's saving thousands of U.S. jobs.
Viewsroom Predictions 2017: Part 2 5 Jan 2017 Breakingviews columnists offer their take on the year ahead: magic mushrooms could be an economic and investment hit, big business will take drones to the skies and Uber's IPO faces an uphill struggle. Plus: Harry Potter's 20th anniversary is a lesson in preparing for surprises.
$18 bln U.S. tool rollup crafts another smart deal 5 Jan 2017 Stanley Black & Decker is paying flailing retailer Sears $900 mln for the Craftsman brand. The serial acquirer is protecting itself by paying in stages and partly basing the price on new sales. Unlike, say, the discredited Valeant, it's building prudent additions to its platform.
Gartner enters Magic Quadrant of merger jargon 5 Jan 2017 The $8 bln IT consultancy is paying $2.6 bln for CEB, a fellow purveyor of advice. Gartner says the combination will cover "all major functions in the enterprise" and help "capture an expanded addressable market." Investors aren't convinced the words add up to any real value.
Volkswagen’s legal risk is rising in two ways 5 Jan 2017 U.S. investors can sue the German carmaker for Dieselgate damages on their home soil, a domestic judge has ruled. The first problem: VW’s 8 bln euros of unprovisioned legal liabilities will go up. The second: American litigation may have a lower bar to success than in Germany.
Buyout firms find new sauce to sweeten returns 5 Jan 2017 Private equity managers are borrowing against their own stakes in companies on margin, according to bankers. The leverage helps spruce up their returns. But investors could also face new kinds of risks.
Le Pen’s post-euro pitch is naïve but beguiling 5 Jan 2017 Far-right presidential hopeful Marine Le Pen wants to reintroduce a national currency in France alongside the euro. Her plan would face huge obstacles and involve big risks. Yet the idea of a painless reversal of the single currency project may seduce voters in France and beyond.
Bank fine-fighting begins to have some logic 5 Jan 2017 Barclays is battling U.S. authorities over charges it mis-sold mortgage bonds. UBS has contested accusations it aided tax evasion in France. With fewer outstanding legal bills and regulators habitually levying huge penalties, lenders have more to gain from pushing back.
Fidelity gets first dip in China fund shark tank 5 Jan 2017 Fidelity International is the first foreign asset manager allowed to create onshore funds and sell them to select mainland buyers. It enters a brutally competitive sector hobbled by capital account controls, and it can't sell to retail investors. This is still a strategic win.
Seoul’s top buyout firm dodges missile-shield hit 5 Jan 2017 MBK wanted to sell ING Life Korea for $3 bln. But Chinese buyers fled after a U.S.-South Korea defence pact riled Beijing. So the private equity group plans to float it. After more than doubling the value of the once-struggling insurer, MBK can still profit nicely.
Blackstone’s new investment tune hits right notes 4 Jan 2017 For its first foray into buying and holding for longer, the private-equity firm is taking over a group that manages song rights for the likes of Bob Dylan. The growth of streaming provides a steady outlook. With some financial improvisation, it's easy to compose a healthy return.
Brazil, Mexico to ramp up pro-market oil makeovers 4 Jan 2017 State-controlled energy behemoths Petrobras and Pemex, which owe more than $220 bln between them and face falling crude output, need help doing their jobs. Mexico's auctions of exploration rights show a business-friendly way forward. Brazil will try to catch up in 2017.
Goldman scores inside straight with SEC chair pick 4 Jan 2017 Avowed swamp-drainer and President-elect Donald Trump named Jay Clayton, the ultimate Wall Street legal insider, to run the financial watchdog. At Sullivan & Cromwell, Clayton worked on bank rescues and bailouts, including Goldman's. Hope and change cede to plus ca change.
Privatizing Medicare would be bad elective surgery 4 Jan 2017 The federal program is a relatively solid part of the U.S. healthcare system. Republicans nevertheless want to revise it so the elderly buy subsidized insurance privately. That'd satisfy a smaller-government ideology, but at a price of greater inefficiency and worse coverage.
Climate change will unclog water’s pipes 4 Jan 2017 The $1 trln H2O sector is growing slower than hoped despite rising threats to cities and companies from drought, flooding and population growth. But efforts to cut greenhouse gases could boost demand in 2017. General Electric is quitting the business at the wrong time.
Breakingviews predicts a shaken-up world in 2017 3 Jan 2017 After the upheavals of 2016, governments, companies and investors face unfamiliar terrain. Once-unthinkable scenarios, good or bad, now seem possible. From the U.S. economy to European elections, from M&A to magic mushrooms, our financial insights offer a guide to the year ahead.
Euro zone revival carries sting in tail 4 Jan 2017 After years in the doldrums, increased business activity and slightly rising prices are good news for the single currency area. Besides, inflation is still a long way below the European Central Bank target. But a sustained pickup would expose the euro zone's two-speed recovery.
More EU banks will be bailed out rather than in 4 Jan 2017 Monte dei Paschi's 9 bln euro recap using public funds seems at odds with reforms making creditors pay. Various loopholes make it just about kosher. Yet these fudges - plus the difficulty of nailing down when a bank is truly bust - imply more states will pay for lender follies.
Next’s retail crisis has distinctly British twist 4 Jan 2017 The clothing chain warned pre-tax profit may fall 14 percent this year. As well as Next's own problems, that's down to Brexit-related inflation, higher business rates and wage bills. British shoppers have also embraced online retail more readily than in some other markets.
Shadow banking and Chinese bonds are dangerous mix 4 Jan 2017 China's bond sell-off was aggravated by a scandal at a securities firm. That's made regulators worried about the role non-bank financial institutions are playing in fixed-income markets. Untangling links between shadow banking leverage and bonds could cause economic shocks.
China’s search dinosaur struggles to find new life 4 Jan 2017 The search engine arm of Sohu, known for its online portal in the early 2000s, wants to list. That could free up resources for its parent to push into areas like video streaming, competing with giants like Baidu and Tencent. But Sohu's costly reinvention looks like a long shot.
Gene therapy is ready to become hereditary 3 Jan 2017 The prospect of treating diseases like hemophilia and cancer by tinkering with DNA has a long history of both promise and frustration. Steady progress means 2017 should be the year the technology finally hits the U.S. market. The problem may be figuring out how to pay for cures.
Trump stimulus will only delay next U.S. recession 3 Jan 2017 The president-elect inherits an economy that's in fairly good shape. His planned tax cuts and infrastructure spending will give growth an added short-term boost. Though that may postpone an overdue downturn, Trump is still likely to face a crunch before the next election.
Trump adds attack-dog bite to global-trade bark 3 Jan 2017 GM is the latest target of the president-elect's ire for outsourcing to Mexico. His pick for U.S. trade rep knows how to impose import restraints and tariffs. Robert Lighthizer's nomination heralds a more comprehensive assault on free trade than Trump's Twitter tirades.
Germany’s thriving job market no solace for Merkel 3 Jan 2017 Unemployment has fallen to its lowest since 1981, and the number of people in jobs is at a record. Chancellor Angela Merkel presided over this happy state but will struggle to leverage it in upcoming elections. Voters are more focused on less predictable flows of migrants.