German wanderlust intensifies U.S. grocery wars 24 Feb 2017 Discount supermarket Lidl is following rival Aldi with plans to open 100 U.S. stores. Armed with an extra-lean business model, Aldi is already succeeding where Tesco, for one, failed. That will add to pricing pressures on traditional food retailers and even the likes of Wal-Mart.
Review: Steven Cohen’s enduring edge 24 Feb 2017 Sheelah Kolhatkar’s “Black Edge” is a compelling tale of the U.S. government’s decade-long failed attempt to charge the billionaire fund boss with insider trading. As Cohen prepares to open a new firm and politicians embrace deregulation, the epic struggle is clearly in the past.
Hollywood’s Oscar glow could be dimmed by China 24 Feb 2017 Some $5 bln from the People's Republic has been pumped into U.S. movie production since 2014. The infusion has been a big help as studio margins shrink. A Beijing crackdown on financing presents a threat, however, and could mean more belt-tightening after Tinseltown's big night.
Vivendi problems even bigger at home than in Italy 24 Feb 2017 Shares in Vincent Bollore’s media group fell over 5 pct on news of an Italian probe into its Mediaset dealings. The wider problem is results showing weak pay-TV performance. A breakup of the conglomerate, which might improve matters, is the opposite of what’s likely to happen.
Local election results mark peak for Theresa May 24 Feb 2017 The prime minister’s Conservatives confirmed their lead over rivals Labour with a landmark by-election victory. Acrimonious Brexit negotiations and squeezed incomes will test May’s popularity in the coming year, though. Not calling an early general election could prove a mistake.
StanChart struggles to match even low expectations 24 Feb 2017 CEO Bill Winters is making some progress fixing the emerging market bank: income stabilised last year and it’s on track to hit 2018 cost targets. Fourth-quarter expenses were higher than forecast, though. StanChart’s poor return on equity looks out of kilter with its valuation.
RBS’ less ambitious returns goal still a stretch 24 Feb 2017 The loss-making UK lender has pushed back its 12 percent return on tangible equity target by one year, to 2020. Even this will be challenging, barring a marked pickup in revenue, which looks unlikely. RBS’ sensitivity to interest rates means more disappointment may lie ahead.
China regulator reshuffle leaves turf intact 24 Feb 2017 The People's Republic is shaking up top financial and economic positions, with veteran watchdog Guo Shuqing poised to take charge of supervising banks. Yet there is still no sign of the much-discussed super-regulator, and central bank chief Zhou Xiaochuan remains in place.
Britain’s takeover regime is worth exporting 24 Feb 2017 “Put up or shut up” rules tightened after Kraft’s Cadbury deal have led to more deals where the bidder makes a firm offer, UK data shows. Generali, currently being stalked by Intesa Sanpaolo, will be envious. It would benefit if something similar was implemented in Italy.
Breakdown: China swaps bad debt for faint hope 24 Feb 2017 The People's Republic is trying to ease its huge corporate debt burden by letting some state-owned groups switch bank loans for equity. Over 300 billion yuan has already been exchanged. Breakingviews explains how, if the companies cannot be saved, taxpayers will still be on the hook.
AIA’s bullish talk contrasts with cash caution 24 Feb 2017 The Asian insurance juggernaut has weathered the clampdown on Chinese capital outflows well, clocking up another bumper year. New business soared 28 pct and a key profit measure rose 15 pct. But management's confidence is not quite matched by its dividend plans.
Holding: In praise of merger appraisals 23 Feb 2017 Dissenters to payday lender DFC's $1.3 bln sale proved they didn't receive fair value. The company appealed, saying a judge's flub shows why courts shouldn't second-guess deal prices. Even so, Delaware's top tribunal owes the investors some love for helping keep M&A honest.
Carlyle hedges against American greatness 23 Feb 2017 Tax-cut fever may be gripping Wall Street but the buyout firm led by David Rubenstein is embarking on its biggest quest for distressed assets. The $2.5 bln fund is a good reminder that lofty valuations, an aging recovery and a chaotic new administration can produce bad outcomes.
Viewsroom: We need to talk about Uber 23 Feb 2017 A former employee accused the ride-hailing company of sexual harassment and gender discrimination. It’s not only bad form but yet another roadblock for money-losing Uber. Plus, where do Kraft Heinz and its owner 3G go after their failed $143 billion bid for Unilever?
Rodrigo Rato jailing is weak crisis coda 23 Feb 2017 The ex-IMF chief has been sentenced to over four years in prison for fiddling expenses while head of Spain's Bankia. It's a rare instance of severe banker punishment. For investors globally, though, this case will offer little satisfaction and even less deterrent value.
RSA flies the flag for insurance simplicity 23 Feb 2017 The UK group’s operating profit rose by a quarter in 2016, pushing its shares up 6 pct. The results vindicate CEO Stephen Hester’s small-is-beautiful strategy. Diversified giants like Axa and Allianz should benefit from scale. But performance - and valuations - suggest otherwise.
Mnuchin’s stock-market brag is double-edged sword 23 Feb 2017 The new U.S. Treasury chief says the equities rally reflects faith in Trump and his promises of tax reform and fiscal stimulus. Both need Congress's say-so, and may bring higher inflation. Anti-immigrant and trade policies could also mute market gains. Mnuchin's boast is risky.
EU veto could do LSE and Deutsche Boerse a favour 23 Feb 2017 It's a year since the two exchanges proposed joining forces. The European Commission will soon decide if the tie-up is anti-competitive. A thumbs-down would spare both sides the need to navigate post-Brexit political waters, and force them to do the sensible thing: wait.
Hadas: Statistical tricks are easy and dangerous 23 Feb 2017 The Trump administration might take up the new autocratic practice of fiddling with standard economic measures. That’s easy to justify, because the data really are arbitrary and can be misleading. But falsifying disagreeable official numbers is a modern kind of tyranny.
Modest goals show why Peugeot lusts for Opel 23 Feb 2017 After a stellar 2016, the French carmaker lifted its target for operating margins to 4.5 pct. That’s still well below the 6 pct it achieved last year, suggesting current earnings are unsustainable. It helps explain why boss Carlos Tavares is keen to snap up GM’s European brands.
Glencore’s biggest foe is its swashbuckling self 23 Feb 2017 The mining giant has recovered from its near-death experience a year and a half ago. Net debt has halved to $15.5 billion and higher prices mean its mines are generating mountains of cash. Resisting the urge to spend it will be Chief Executive Ivan Glasenberg’s biggest challenge.
Pearson buyout would be a study in low returns 23 Feb 2017 The UK education publisher's stock is down 22 percent this year, and its sprawling global business looks ripe for a breakup. Factor in the chance that the core U.S. textbook market is in terminal decline, however, and private equity would be brave to write the cheque.
Staley’s auctioneering is paying off for Barclays 23 Feb 2017 The UK lender bounced back into the black in the fourth quarter and will close most non-strategic asset sales six months early. Despite market share gains, economic profit may elude its investment bank. But boss Jes Staley's brisk dealmaking has girded Barclays' balance sheet.
Rugby fumble will hurt Vodafone’s NZ partner most 23 Feb 2017 New Zealand's antitrust tsar has blocked a planned merger between Vodafone's Kiwi unit and Sky Network. That's irksome for the UK giant but far worse for its local partner. Despite owning rugby and other great sports rights, Sky is bleeding pay-TV subscribers. It needs a Plan B.
Ctrip maps route to become China’s next web giant 23 Feb 2017 A near-monopoly in online travel makes Ctrip an attractive bet on Chinese tourism. Better-than-expected results and punchy growth targets have also impressed investors. If the $24 bln outfit stays on course, it may join Baidu, Alibaba and Tencent among China's online elite.
Ceding Nissan CEO role is a good start for Ghosn 23 Feb 2017 Four chairmanships and three CEO roles spanning Nissan, Renault, the Renault-Nissan Alliance and Mitsubishi Motors is too much even for a boss as indefatigable as Carlos Ghosn. Stepping back from the day-to-day at Nissan is laudable; losing a few more titles would be even better.
Tesla investors shift into new cultish gear 22 Feb 2017 The $45 bln electric-car maker's latest results fail to help explain the huge recent jump in its share price. More calls for capital are likely, production targets are tough and the SolarCity deal remains a mystery. More than ever, owning Tesla means revering boss Elon Musk.
Latin America trumps populism – for now 22 Feb 2017 Ecuadoreans denied a first-round election victory to their leftist president's chosen successor. As in Brazil and Argentina, that opens the door to a traditional pro-business candidate. But growing U.S. demagoguery gives the region's politicians an excuse to ramp up nationalism.
U.S. immigration crackdown bets the farm 22 Feb 2017 The new president is moving hastily to deport more illegal workers as part of his America-centric policy. In the process of trying to protect industries like manufacturing, stricter rules will hit an agricultural sector already suffering from labor shortages and falling profit.
Unilever may be tempted by artificial sweeteners 22 Feb 2017 After escaping Kraft Heinz's $143 billion bid, the Marmite maker said it will focus on boosting shareholder return. The assumption is that it does so organically, or via small deals. But a big move, like buying Colgate, could get the share price up - if Unilever could stomach the execution risk.