European market reboot depends on more than Macron 24 Apr 2017 Stocks and the euro rose sharply amid relief that the French centrist made it to the second round of presidential elections. The gap between Gallic and German bond yields remains wider than six months ago, though. That reflects lingering political risks to the single currency.
Saudi austerity U-turn highlights reform hurdles 24 Apr 2017 The kingdom has restored perks for public sector workers in an attempt to preserve its broader economic agenda. Though the unpopular measures helped cut the deficit the social costs outweighed the benefits. Riyadh is learning that austerity and reform rarely work in tandem.
Jimmy Choo seeks new owner for scuffed brand 24 Apr 2017 The high-heel label is for sale less than three years after its IPO. Owner JAB may need cash following its $7.5 billion purchase of Panera Bread. There is room to increase Jimmy Choo’s operating margin, but with slow sales growth, it already looks expensive.
Reinvention of Philips is on a healthy track 24 Apr 2017 The Dutch group’s transformation from a conglomerate into a focused maker of health kit is in its final stage. After carving out lighting, boss Frans van Houten is making headway in lifting poor margins. The surgery is needed to close the valuation gap with pure-play rivals.
Activist in Japan ups the ante and gets results 24 Apr 2017 Hong Kong hedge fund Oasis forced Panasonic to change tack and sweeten its offer for the rest of subsidiary PanaHome. Floating its own counterbid made the difference. But the new $839 mln cash offer is still far from a knockout. There could be more moves and countermoves ahead.
Taiwan, not China, is its own worst enemy 24 Apr 2017 Complacence has left the island in an economic funk. China-sceptic President Tsai, elected on a tide of domestic discontent, has a $29 bln stimulus package to bolster growth, but bolder reforms are hobbled by politics. That may leave Taiwan even more dependent on its neighbour.
Winning French presidency is easy part for Macron 23 Apr 2017 Projections show the centrist reformer will face the far-right Marine Le Pen in the election's second round. Macron is the clear favourite – a relief for investors who feared the rise of anti-EU candidates. They risk ignoring how hard he will find it to deliver economic change.
Schlumberger exposes oil’s geographic fault lines 21 Apr 2017 The $100 bln drilling-services company grew first-quarter revenue in North America while in regions elsewhere it shrunk dramatically. New technologies also helped catapult fracking efficiencies in the Permian Basin. Global operators probably can't get to west Texas fast enough.
Soccer attack weirdly converges risk factors 21 Apr 2017 A bombing of Borussia Dortmund's team bus was carried out by a man using leveraged options to bet against the club’s stock, prosecutors say. A similar unsuccessful plot recently involved U.S. retailer Target. The mix of financial weapons and real ones is a disturbing new trend.
White House sends new mixed message to Wall Street 21 Apr 2017 Donald Trump wants Treasury reviews of rules that discourage so-called inversion deals and set out how to resolve a failing financial institution. The orders themselves are innocuous. They may, however, encourage lax tax enforcement and fresh changes to the liquidation framework.
Review: Lessons from ghosts of tax reform past 21 Apr 2017 Donald Trump wants to overhaul the U.S. tax code. “Showdown at Gucci Gulch” chronicled the last successful revamp 31 years ago. Its tales of lobbying and partisan battles seem quaint compared with today’s polarization and political spending. Still, the saga offers useful tips.
Markets back Dimon not Kashkari on too-big-to-fail 21 Apr 2017 JPMorgan's boss reckons banks are no longer irresolvable while the Minneapolis Fed president argues debt designed to absorb losses is flawed. One is putting too much confidence in the workout process and the other too little. Dimon has been more persuasive with bond investors.
SNC-Atkins implies more risk for buyer than seller 21 Apr 2017 Canadian engineering firm SNC-Lavalin is forking out 2.1 bln pounds for UK peer WS Atkins. Given that the synergy benefits cover the premium, it looks mutually beneficial. But while Atkins gets a 42 pct cash premium, SNC’s rich cost-saving targets are less set in concrete.
How tech pushed finance into a status crisis 21 Apr 2017 Top programmers are outdoing dealmakers in pay, rivaling them in political clout and even stealing their reputation for hard graft. Cue hand-wringing from banks worried about retaining the brightest and best. They shouldn't worry: post-status industries make for better employers.
Deutsche offers investors a too-big-to-fail test 21 Apr 2017 The German lender’s latest U.S. regulatory thwack comes as it asks creditors to swap bail-in bonds for SEC-registered ones with clearer terms. It implicitly tests Berlin’s model for resolving banks. It’s also a reminder of the benefits Deutsche gets from being a global bank.
Heineken ought to depose the King of Good Times 21 Apr 2017 The Dutch brewer is the largest shareholder in India's biggest beer maker. An embarrassing agreement with arrested tycoon Vijay Mallya leaves Heineken bound to accept him as chairman. Heineken should lead a charge to sack him anyway and hope to win any resulting legal battle.
Markets are wary of new blot on Japan Inc’s image 21 Apr 2017 Fujifilm has discovered dodgy accounting in its Kiwi unit. It is merely a $200 mln flub. But investor anxiety is understandable. What looked like a manageable accounting problem at Toshiba spiralled out of control. The photocopier-maker's mediocre governance is unhelpful too.
Viewsroom: Theresa May’s big Brexit gamble 20 Apr 2017 The UK PM wants an early general election to strengthen her majority in parliament, stoking market hopes of a friendly exit from the EU. Those may be misplaced. Elsewhere, Trump’s Buy American, Hire American plan is deeply flawed. And Goldman takes a beating from Morgan Stanley.
Greifeld finds Virtu in crossing the street 20 Apr 2017 Nasdaq’s soon-to-depart chairman and ex-CEO is trading his exchange role for a market maker’s hat. He’s helping finance Virtu’s $1.4 bln KCG purchase and joining the board. It’s a high-frequency change of loyalties: the company’s planned cost cuts target Greifeld’s bourse.
Tech fund overflow may swamp deal discipline 20 Apr 2017 Silver Lake just closed a $15 bln fund, one of the largest ever. It will compete with SoftBank’s war chest, worth up to $100 bln. The private-equity shop knows its patch. But there are only so many SoFis, and fewer Dells. Too much capital plus too few deals equals disappointment.
Cox: Ugly global paint battle drips with irony 20 Apr 2017 PPG's $24 bln hostile bid for Akzo Nobel has devolved into a colorful war of words and investor presentations. Both sides are hypocritically seeing red over defensive tactics and strategic steps each has used itself. Strip it down, though, and the only hue that matters is green.
UK proves itself a so-so green energy investor 20 Apr 2017 The government has sold its Green Investment Bank to Macquarie for 2.3 bln pounds. A 5 pct annual return over five years gives taxpayers some benefit. But as with other recent public sales, the risk is private capital reaps benefits that could have stayed with the public purse.
Trump finds one ex-Goldman banker he doesn’t love 20 Apr 2017 The White House wants to rein in the Financial Stability Board and its chairman, Bank of England Governor Mark Carney. U.S. officials question the international body’s authority to identify systemically important firms. It’s another step towards global regulatory fragmentation.
Verizon’s M&A signal comes in a little clearer 20 Apr 2017 The U.S. telecom titan reported a 20 pct decline in quarterly profit as a new unlimited data plan failed to attract customers. Its strategy behind buying AOL and Yahoo is perplexing. It's no wonder boss Lowell McAdam is open to the idea of a bigger deal. Verizon could use one.
Economic heresy is real winner in French election 20 Apr 2017 Investors are nervous the presidential contest will be a choice between far-right Marine Le Pen and hard-left rival Jean-Luc Melenchon. That’s unlikely. Still, candidates who are blasé about debt and hostile to the EU could get two-fifths of the vote. Their ideas may catch on.
Unilever wins battle in shareholder value war 20 Apr 2017 Consensus-beating first quarter results add impetus to the Anglo-Dutch group’s goal of a 20 pct operating margin by 2020. Hitting the target would help justify a share price above the spurned offer from Kraft Heinz. That hinges on it cutting fat rather than bone, though.
Publicis revenue reprieve could prove fleeting 20 Apr 2017 The French ad group suffered a smaller-than-expected hit to its top line in the first quarter, as growth in Europe offset account losses and weaker spending in the U.S. The risk is a greater backlash to murky industry pricing practices that spreads beyond America.
China’s Aramco pitch puts pressure on Tokyo’s bid 20 Apr 2017 A Chinese consortium is angling for a cornerstone role in Saudi Aramco's IPO, Reuters says. This bolsters the case for a Hong Kong listing. Riyadh will like the prospect of easy money with few strings attached. Japan, also competing for the deal, may need to step up.
Samsung’s enemies pick the wrong battle 20 Apr 2017 Politicians in Seoul want to stop Samsung restructuring using treasury stock. They argue it's a trick for the ruling Lee family to gain more control cheaply. But the resulting firms would be worth more, and be better run. Keeping the status quo would be a Pyrrhic victory.
Belated O’Reilly exit shows Fox still on back foot 19 Apr 2017 The U.S. cable channel's star anchor is out after a catalog of sexual-harassment allegations prompted advertiser boycotts and protests. The channel's chief architect, Roger Ailes, was booted amid a similar scandal nine months ago. Rupert Murdoch's empire is changing only slowly.