Trump sends investors more conflicting signals 28 Feb 2017 Speaking to Congress, the president repeated his criticism of foreigners after telling journalists earlier he’s open to legal status for illegal immigrants. There also were scant details on tax and healthcare reforms. A still-hazy message bodes poorly for the economic agenda.
Harry Potter conjures Japanese growth for Comcast 1 Mar 2017 The U.S. cable giant is paying $2.3 bln to buy out Goldman Sachs and other partners in Universal Studios Japan. The theme-park operator's success highlights a part of the Japanese economy where growing domestic consumption is no chimera. A boom in tourism helps too.
Luxury watch deal builds on Hong Kong shell pile 1 Mar 2017 Luxury watch retailer Hengdeli wants to sell its prized China business to its chairman and leave stakeholders Swatch and LVMH with a gutted listed entity. Proliferating empty shells is a real problem in Hong Kong. Better to force a buyout, or block such sales.
Philip Green pays 363 mln pounds for a quiet life 28 Feb 2017 That’s what the British apparel billionaire has put into the pension pot of defunct retailer BHS. It ought to calm politicians who painted Green an enemy of the state. And, anyway, the return from reinvesting his jumbo dividends should cover it nearly twice over.
Signet’s gender defense rings hollow 28 Feb 2017 The jeweler’s acknowledgement of a 2008 class-action suit alleging pay discrimination helped push its stock down 13 pct. A muddy rejection of sexual harassment allegations didn’t help. Signet’s long-winded statement raises more questions than it provides reassurances.
JPMorgan dangles Trump-hued carrots to investors 28 Feb 2017 At its annual investor shindig the bank run by Jamie Dimon dangled the prospect of a 25 pct profit boost even before any White House cuts to taxes or red tape. The prediction is tantalizing but ignores the risks inherent in the new president's jingoistic America First policies.
Snapchat valuation requires different filters 28 Feb 2017 Parent Snap is set to go public this week. The traditional market cap at the top of the indicated range is $18.5 bln. Including stock promised to staff, that shoots up to $22.3 bln. Blocking out new money, it's $20 bln. All tallies demand heart-shaped, rose-tinted lenses, though.
SoftBank satellite bid orbits optimistic creditors 28 Feb 2017 The Japanese telecom group wants to merge its OneWeb startup with industry titan Intelsat. A combination depends on bondholders accepting haircuts on much of the $14 bln in debt. There's a juicy quid pro quo: long-term backing from Masayoshi Son’s giant tech fund.
What Christine Lagarde might say to Marine Le Pen 28 Feb 2017 The presidential candidate wants France to quit Europe’s single currency. The possibility that she might win is already spooking markets. Breakingviews imagines the advice Le Pen might get from her compatriot, International Monetary Fund head Christine Lagarde.
Starbucks embarks on ultimate market test: Italy 28 Feb 2017 Howard Schultz wants to woo espresso-mad Italy, which inspired his $82 bln creation, with its first-ever swanky "Roastery" in Milan. Italians have long resisted filter coffee. But depressed real estate and a partnership with an artisan baker could give Schultz the jolt he seeks.
Pared Tudor fees still in hedge-fund royalty zone 28 Feb 2017 Paul Jones' $10 bln firm, once among the most successful and expensive, is cutting fees to 1.75 pct of assets and 20 pct of gains. That's finally inside the archetypal "2-and-20" but it remains above average. Like other hedgies, the veteran needs to rediscover elusive returns.
Target’s wobbly aim will take time to correct 28 Feb 2017 The U.S. retailer reported unexpected top-line weakness and forecast more pain, wiping $5 bln from its market value. Pressure from the likes of Wal-Mart is hurting. A 34 pct jump in online sales is encouraging, but Target will continue to struggle with changing shopping habits.
Trump’s “European Apprentice” is a real-life sequel 28 Feb 2017 The president’s support for Brexit and criticism of the European Union makes its members nervous. Though leaders publicly pledge a united front, they are privately jockeying for influence in his administration. It’s a closed-door version of the TV contest that made Trump famous.
ECB asset purchase rules are self-inflicted wounds 28 Feb 2017 The central bank’s bond-buying scheme has mechanistic rules that are driving German bond yields to record lows well below zero. This makes losses likely. While past gains may offset such hits, loosening the rigid constraints would reduce the risk of losses and market disruption.
Pilot error poses biggest risk to Thales ascent 28 Feb 2017 A successful restructuring has left the French defence and aerospace group well positioned to benefit from any increase in governments’ defence spending. The biggest hazard is that growing financial strength may tempt boss Patrice Caine into value-destroying big-ticket M&A.
Old crisis quick fix could be real Samsung reform 28 Feb 2017 The group said it dismantled its secretive strategy office as its heir was indicted for bribery. Samsung has dissolved its "control tower" before, only to rebuild it. But this time pressure to reform is far stronger. The move could be a step toward lasting change.
Takata’s future is full of moving parts 28 Feb 2017 The Japanese auto supplier has concluded a $1 bln U.S. plea deal over deadly airbag inflators. That opens the door to a sale, probably to a Chinese buyer. Yet unanswered questions span legal risks, deal structure, commercial prospects and the fate of existing shareholders.
China’s soccer frenzy has early signs of fatigue 28 Feb 2017 A unit of LeEco has lost the rights to screen top Asian matches after missing a payment on a $100 mln-plus deal. The cash-strapped group has unique problems. Still, Chinese investors have poured record sums into the sport. Some others have probably over-stretched too.
Canada Goose IPO may lead investors on wild chase 27 Feb 2017 The fast-growing maker of downy winter coats will be controlled by backer Bain Capital using super-voting shares. High-end Italian rival Moncler offers an aspirational comparison and suggests a possible $1 bln valuation. Trendy fashion companies, however, can be fretful pursuits.
Trump wraps U.S. budget flaws in $54 bln flag 27 Feb 2017 Boosting military spending by that sum largely at the expense of diplomatic soft power may please ardent supporters. Fixing Defense Department mismanagement would be wiser, though, and avoid a clash in the president's own party. Jingoism risks bringing higher costs in many forms.
Masayoshi Son could make easy work of $100 bln job 27 Feb 2017 His SoftBank may plunk $4 bln into office-space upstart WeWork. Son blanched at two earlier opportunities to invest at valuations lower than the $20 bln now on offer. One big difference is the Vision mega-fund. Perspectives can change when other people's money gets in the mix.
Buffett’s $1 trln target for Apple is in sight 27 Feb 2017 The Berkshire Hathaway boss reckons the iPhone maker might be the first company worth that much. Growth has slowed, but Apple will continue to churn out huge profit for the foreseeable future. Just valuing the underlying business in line with the S&P 500 would hit the mark.
Fund cannibalism is a chewy meal for activists 27 Feb 2017 Asset manager GAM has been urged to shake up its board by an activist fund. The Swiss group’s performance and governance make it vulnerable, but fund managers are tricky targets: the industry's fee structure is challenged, costs are high, and regulators demanding.
PwC might have seen Oscars mixup coming 27 Feb 2017 The accounting firm presided over an error that saw the wrong movie initially named as best picture before "Moonlight" took the prize. PwC's audit work for numerous scandal-hit companies has shown how even established processes are no match for human sloppiness, buck passing and vacillation.
Rate tweak whiplashes UK insurers 27 Feb 2017 Insurance companies will have to pay more for injury claims after the government said payouts must be discounted at a negative rate. The metric was too high before, and arguably still is. The real mystery, though, is why financial risk ends up with claimants, not insurers.
LSE and Deutsche Boerse get a gift neither wants 27 Feb 2017 The exchange merger looks sunk after European regulators demanded a sale of an LSE trading platform. That’s not so bad - especially for LSE, which might find suitors elsewhere once Britain’s future is clearer. Besides, investors had only priced in a sliver of the deal’s benefits.
Intesa’s Generali drama leaves it needing encore 27 Feb 2017 The Italian lender’s abandoned bid for insurer Generali puts both under pressure to appease shareholders. The former target can cut costs, and slim down. Intesa chief Carlo Messina’s challenge is harder - to diversify from banking in an unstable political environment.
Vietnam’s banking malady threatens star status 27 Feb 2017 Local lenders need to keep pumping credit into the economy to sustain the country's 6 pct growth. But banks are short of capital. A plan to allow more foreign investment will only help if Vietnam is willing to let outsiders take control of healthier banks as well as weak ones.
China’s unicorn shortcut sidelines IPO reform 27 Feb 2017 The securities watchdog is mulling faster listing approvals for big tech firms. Letting Jack Ma's $60 bln Ant Financial jump the queue may convince other entrepreneurs to follow, eschewing New York and Hong Kong. But this would be a poor substitute for meaningful IPO reform.
Warren Buffett risks losing his own winning wager 26 Feb 2017 The Berkshire Hathaway boss devotes a big portion of his latest missive to extolling the virtue of index funds. He has proved his point in a successful bet with a market pro that hedge funds wouldn't overcome the S&P 500. By one metric, Buffett is struggling to do the same.