Review: A disappointingly tepid Circle of hell 28 Apr 2017 The movie of Dave Eggers' 2013 novel "The Circle,” starring Emma Watson and Tom Hanks, explores a cultish, all-seeing internet company. The film's take on the near future reflects real privacy and surveillance issues. But like its protagonist, its sense of identity is weak.
Credit Suisse bonus vote exposes two problems 28 Apr 2017 Two-fifths of shareholders at the bank’s AGM rejected its short-term bonuses. Yet 91 pct approved the reappointment of Chairman Urs Rohner. Credit Suisse lacks two things a good company needs: a chair who holds the CEO to account, and investors who kick up a fuss if he doesn’t.
Oil majors surge into mid-cycle sweet spot 28 Apr 2017 Exxon and Chevron reported sharp first-quarter upswings thanks to higher oil prices and better margins. Prudent asset sales helped too. It’s a turnaround from early 2016. Now, though, the risks go both ways: crude could slump again or, if prices hold up, costs will start rising.
Cautious consumers provide new sort of Trump bump 28 Apr 2017 The U.S. economy grew slower than expected, at just a 0.7 percent pace in the first quarter. Less spending on cars was a big factor. The year typically starts slowly, but consumers have been less confident than investors. That could put a hitch in the president's ambitious plans.
Theresa May has a way out of UK pension pickle 28 Apr 2017 The prime minister is dithering over whether to keep guaranteeing above-inflation hikes to pensioners. The triple-lock is nonsensical, inequitable and unfit for an era of Brexit and stagnant wages. May has the political capital to adopt a fairer single-lock, tied to earnings.
French vote may spring one more plot twist 28 Apr 2017 Presidential favourite Emmanuel Macron enjoys a huge poll lead over far-right Marine Le Pen. But the margin could be eroded by any missteps, his rival’s media savvy, and what the hard-left does. With a week to go, there is still time for the election to rattle financial markets.
UBS valuation lead over Barclays looks too wide 28 Apr 2017 The Swiss bank trades at 1.3 times tangible book value, while its UK peer languishes at 0.7 times. First-quarter results, which saw UBS beat expectations and Barclays disappoint, support investors’ logic. But Barclays is on the mend, while wealth management is not trouble-free.
Bayer exemplifies Germany’s too-powerful boards 28 Apr 2017 A big institution is unhappy the chemicals group didn’t give it a say on its value-burning $66 bln purchase of Monsanto. German companies can do deals without putting them to a vote and often have carte blanche to raise capital. The wound is self-inflicted and possibly avoidable.
Safran can wiggle out of Zodiac mess in own time 28 Apr 2017 The French engine maker clearly needs to reduce or scrap its 8.2 billion euro bid for the plane-seat maker. The current offer, a third above Zodiac’s share price, is financially and politically daft. But there’s no rush to renegotiate. Clever timing might produce a better result.
Hillhouse makes cautious pass at China’s Belle 28 Apr 2017 The Chinese investment manager has joined with CDH and bosses to take the struggling mainland shoe retailer private. At $6.8 bln, this could be one of Asia's largest management buyouts. The offer isn't extravagant, but making Belle's results pretty again won't be easy.
RBS return goal hinges on ambitious cost cuts 28 Apr 2017 The state-owned UK bank reported its first quarterly profit since 2015. To reach its target of a 12 pct return on tangible equity by 2020, however, it will need to push through further savings. Given many of the obvious efficiencies have been found, that seems a stretch.
Evergrande’s buyback blitz raises new red flag 28 Apr 2017 The Chinese property developer spent over $800 mln buying back shares in the last month, pushing its free float down as low as it could go. That may help ease a planned backdoor listing in Shenzhen. It is also fresh evidence of Evergrande's financial aggression.
MSCI’s China plan is clever window dressing 28 Apr 2017 The index provider has slashed the number of mainland stocks to include in benchmarks tracked by $1.6 trln in assets. This should win support after prior failed attempts. But resulting flows into China will amount to a rounding error. It's a very tiny step in the right direction.
Amazon well of web profit may gush a bit slower 27 Apr 2017 The online giant’s retailing arm shredded rivals in the first quarter, and investors cheered a 41 pct increase in earnings. Yet web services, lately a seemingly limitless source of revenue, showed decelerating growth. It could be that rivals are finally sipping from the firehose.
Alphabet ad autopilot heads for profit and bother 27 Apr 2017 The $610 bln Google parent racked up another strong quarter with a 22 pct increase in revenue. Its deepening digital-advertising duopoly with Facebook helps make growth more predictable – but may also bring the companies closer to a face-off with antitrust watchdogs.
Viewsroom: Europe’s electoral frenzy 27 Apr 2017 France is about to choose a new president. The UK has called a surprise election. Germans head to the polls soon and Italians and Greeks could be close behind. As Brexit gets in motion and President Trump settles in, Europe’s election season will bring risks and opportunities.
Henry Kravis finds polite barbarian at his gate 27 Apr 2017 ValueAct disclosed a nearly 5 pct interest in KKR. Jeff Ubben's firm is usually friendlier than many activists and sounds positive on the buyout shop's prospects. Private-equity stocks have lagged bullish valuation hopes, though, and that could lead to a push for bigger changes.
Pharma deal offers new buyout double-dip trial 27 Apr 2017 Carlyle and Hellman & Friedman are swapping stakes in drug tester PPD while increasing its paper value 2.5 times, to $9 bln. The firm’s growth may justify the valuation but shuffling buyouts is opaque and can harm returns. As fund-to-fund deals grow, this risk will loom larger.
Archived tax plan could help White House close gap 27 Apr 2017 Donald Trump's bullet points, summarizing earlier campaign ideas, would add trillions to U.S. deficits over 10 years. Ex-Congressman Dave Camp sketched out a more balanced plan three years ago. It may offer a blueprint, albeit with smaller business-rate cuts than Trump wants.
Lazard’s buy-side bets deserve shareholder love 27 Apr 2017 Roger Altman’s Evercore trades at a higher multiple than rival Ken Jacobs’ firm due to faster M&A growth. But equity-market upheaval is hitting its trading business while Lazard’s asset-management unit is weathering industry changes far better. Its shares should reflect that.
For credit, ECB is more perilous than Le Pen 27 Apr 2017 The dwindling likelihood of far-right Marine Le Pen becoming French president has sent the cost of borrowing for risky companies to near-record lows. A correction could come once the European Central Bank withdraws support for bond markets – which is more likely if Le Pen loses.
Abu Dhabi cure has limits for Mediclinic investors 27 Apr 2017 The emirate has thrown a sop to citizens by agreeing to pay more of their healthcare costs. That's good for local hospital operators like UK-listed Mediclinic. But a near-20 percent jump in its share price looks exuberant. Abu Dhabi may try to recoup its money in other ways.
Cox: Proximity to Trump no blessing for stocks 27 Apr 2017 Equity-market winners and losers from the president's first 100 days are surprising. "Failing" New York Times shares have surged. White House talent providers Goldman Sachs and Exxon are down. Blackstone and Fox are flat. Distance from the Oval Office may prove a virtue.
Deutsche Bank shares are cheap for a reason 27 Apr 2017 The German lender's investment bank had weaker first-quarter revenue growth than peers. Deutsche has raised capital, cut costs and survived a torrid 2016. But the more the top line struggles, the tougher it will be to get its valuation above book value.
Lloyds hits peak Horta-Osorio 27 Apr 2017 The UK bank is outperforming on things investors care about: costs, net interest margins and capital generation. Its recovery under boss Antonio Horta-Osorio has been impressive. From here, his efforts start to matter less in relative terms than what happens to Britain’s economy.
AstraZeneca reaches point of maximum pain 27 Apr 2017 The drugmaker's revenue fell 10 percent in the first quarter, despite a boost from non-recurring sales. Losing patents has hurt Astra's pricing power. Winning approval for new drugs would help boss Pascal Soriot rebuild. Investors are not fully factoring in that possibility.
Ducati is one VW trophy worth selling 27 Apr 2017 The German carmaker may offload the iconic Italian motorcycle brand. Few synergies, thin margins and VW’s need for cash are good reasons to ditch its former chairman’s vanity purchase. It’s a way for CEO Matthias Mueller to show he’s serious about simplifying the byzantine group.
Malaysia throws cheque book at 1MDB problem 27 Apr 2017 A deal with Abu Dhabi puts Malaysia on the hook for $3.5 bln of the disgraced fund's debt and leaves a dispute over a further $3.5 bln unresolved. That is a costly attempt to patch up relations between the states and avoid potential embarrassment before an election.
Samsung’s choice of Plan A doesn’t quite add up 27 Apr 2017 The South Korean giant's board rejected a restructuring pushed by Elliott, the hedge fund. Possible legal changes do indeed threaten the transformation. But that does not justify ruling out any future overhaul. Investors deserve an answer on how it will fix its odd structure.
Tech exuberance drives Didi to a $50 bln valuation 27 Apr 2017 China's top ride-hailing app is raising up to $6 bln. With no competition at home, the extra firepower seems unnecessary. A big chunk of the cash will probably go into counterparts abroad. It’s a fresh sign the huge sums raised by SoftBank and others are inflating startup values.