Takata’s failure remodels auto-safety industry 26 Jun 2017 The airbag-maker filed for Chapter 11 with $10bln-plus of liabilities. Like Toshiba, this scandal reflects badly on Japan Inc’s governance and technical competence. This is a big opportunity for smaller Chinese-backed rival KSS, which gets most of the business for $1.6 bln.
Hong Kong market is caught between two worlds 26 Jun 2017 Twenty years of Chinese listings have turned the ex-colony into a $3.7 trln market and a top IPO venue. But valuations are low. And while it has first-world regulations, it cannot effectively police rogue mainland firms. To clean up its act, Hong Kong will need more Chinese help.
Nestle gives Dan Loeb an Alpine peak to climb 26 Jun 2017 The pushy billionaire has set his sights on the Swiss Alpo-to-Perrier producer. Consumer groups such as P&G and Pepsi have proven tough activist targets. Loeb clearly likes a challenge, having recently agitated in lethargic Japan. And $263 bln Nestle may be a movable mountain.
India’s fintech marvel acquires an Orwellian tinge 26 Jun 2017 Biometric IDs have cut corruption and helped villagers get bank accounts. But the database may also hand too much power to the state, or hackers. Limiting its mandatory use, and introducing a data-protection law, will help retain faith in a system that helps speed up development.
U.S. debt ceiling’s only value is as a warning light 23 Jun 2017 The Treasury wants lawmakers to raise the $20 trln cap on federal borrowing or risk a default. The 100-year-old idea of the limit is no longer practical, especially when Congress won't link it with budgeted outlays. Still, the ceiling is a symbol of America's growing debt burden.
Natural gas inflicts fresh wounds on old victim 22 Jun 2017 Southern risks a new writedown after regulators tired of waiting for a novel “clean-coal” plant. As with its troubled nuclear project, the $50 bln U.S. utility tried untested designs. Efforts to diversify fuel sources are admirable but cheap gas prices continue to crush them.
Review: We’re all behaviorists now – so what? 23 Jun 2017 A decade after the financial crisis started, the lessons are still being debated. Two new books by leading financial practitioners say human irrationality and unpredictability hold the key to understanding. Their reasoning is compelling, but the practical takeaways are slim.
Brexit one year on: an alternative history 23 Jun 2017 It has been a year since Britain voted narrowly to remain in the EU, a (fake) bank CEO writes in a memo to staff. Few expected uncertainty would linger so long after the referendum. Austerity and populism point to challenges in the UK. Thankfully, the euro zone looks attractive.
Oil markets too calm over Qatar ultimatum 23 Jun 2017 Doha’s Gulf neighbours have imposed a 10-day deadline to comply with demands including reparations, closing Al Jazeera and regular inspections. Markets have assumed the standoff won’t turn violent and impact oil supply from the region. That assumption is looking less secure.
Bolloré clan’s deal sums don’t add up 23 Jun 2017 Vincent Bolloré’s Vivendi is buying ad group Havas, run by his son Yannick. The younger Bolloré says it may create at least 390 mln euros of value, justifying the premium. That’s dubious: the premium is arguably bigger than he claims, and the return on investment still looks low.
Italy’s broadband farce risks state overreach 23 Jun 2017 Ministers are threatening to punish Telecom Italia for building broadband in poor areas. The snag is that it is competing with government-linked rival Enel. Telecom Italia’s French ownership also adds complexity. Whatever the motive, attacking private investment is a risky move.
Sale of Singapore’s GLP seems to stack up 23 Jun 2017 Buyout firms are boycotting an auction they think favours insiders, the FT says. That is embarrassing for the $10 bln warehouse giant and top backer GIC. But GLP appears to be playing it straight. Securing a full price for shareholders would draw a line under the matter.
Markets call Trump’s bluff with Indian IT rally 23 Jun 2017 The value of the top outsourcing firms has risen about 9 pct, or $12 bln, since the election of U.S. President Donald Trump. Investors have reason to doubt his hard talk on immigration, and to believe Premier Narendra Modi can help his counterpart see the mutual benefits.
Reasons to fret about Hong Kong’s post-2047 future 23 Jun 2017 China’s promise to uphold “one country, two systems” does not expire for three decades. Yet property owners and citizens have little idea of what comes next. Drastic changes to the legal system are unlikely. Still, there is ample room for a crisis of confidence long before 2047.
Weibo walks blurry line between censors, investors 23 Jun 2017 Beijing has cracked down on politically-sensitive videos on the microblog, wiping $1 bln off its market value in a day. Other Chinese internet outfits are exposed to similar risks. But Weibo's business model will keep putting it at odds with the country’s unpredictable censors.
Next test for big U.S. banks is self-restraint 22 Jun 2017 All 34 lenders and Wall Street firms cleared the Fed’s annual health hurdle. Next year’s checkup may be less strict on operational risk and other areas. If banks want to make aggressive payouts to investors, future stress tests may give the central bank less power to stop them.
Viewsroom: Helping Uber hail a new CEO 22 Jun 2017 Filling departed founder Travis Kalanick’s seat is no easy task, so we offer some suggestions. Elsewhere, Amazon CEO Jeff Bezos’ seemingly crazy $13.7 bln offer for struggling grocer Whole Foods has some logic. Anbang lands in hot water in China. And the lure of 100-year debt.
Argentina grinds toward economic credibility 22 Jun 2017 Within just a couple of days Latin America’s third-largest economy sold a rare 100-year bond and was then surprisingly snubbed for inclusion in a major stock index by MSCI. Amid all the noise, President Mauricio Macri is slowly asserting the dullness of competence.
IPO puts Altice USA’s best program behind it 22 Jun 2017 Bankers directed a flawless show for the public offering of the Dutch-based cable-TV company’s American business. Altice USA now trades at a higher multiple than Charter and Comcast yet has more onerous debt and no clear path to expand. Shareholders may want to change channels.
Qatar’s American Airlines ticket not just politics 22 Jun 2017 Buying a stake in the carrier has all the hallmarks of a politically motivated deal. Flexing its financial muscles in the United States sends a defiant message to its enemies circling in the Gulf. But American Airlines also offers commercial value on top of diplomatic leverage.
U.S. Senate’s “better” healthcare is still worse 22 Jun 2017 Upper-chamber Republicans unveiled their hitherto secret Obamacare alternative. Unlike the House bill it keeps income-based subsidies, but there are big cuts to Medicaid. Millions would probably lose insurance coverage. With costs ballooning, that's what Trump might call "mean."
Buffett reaffirms value of his seal of approval 22 Jun 2017 Berkshire Hathaway is buying up to 38 pct of Canada's Home Capital and extending it C$2 bln in credit. It’s a rescue out of Buffett's 2008 playbook that promises to steady the troubled mortgage lender. The favorable terms illustrate how his imprimatur is as coveted as his cash.
Blackstone may have to financially engineer itself 22 Jun 2017 The buyout shop's units are trading close to the $31 IPO price of exactly a decade ago. Even with dividends, Blackstone's owners have fared no better than if they'd bought the S&P 500. Getting anywhere near boss Steve Schwarzman's $100 price target probably requires big changes.
Cox: Milan is dark horse in post-Brexit bank race 22 Jun 2017 The city that taught London about lending lags Paris and Frankfurt in pitching its appeal as a financial center. Fashionable lateness is a Lombard charm. So are fine universities, clever financiers, tax incentives, a strong work ethic – and easy access to beaches and mountains.
China web giants stuck with telco reform bill 22 Jun 2017 Alibaba and Tencent will join a group investing $10 bln in struggling China Unicom, Reuters reported. It’s part of Beijing's plan to increase private investment in state-owned firms. Unicom is the clear beneficiary of the boost. How the internet giants will profit is unclear.
Saudi Aramco IPO is exercise in reverse valuation 22 Jun 2017 The oil producer is worth $2 trillion, say its owners. The question might not be whether that valuation is right, but what Aramco’s owners and bankers will have to do to get it. A Breakingviews calculator suggests this will be a stretch of reason.
China underscores new hard line on outbound M&A 22 Jun 2017 The banking regulator is probing loans made to serial acquirers Anbang, Fosun, HNA and Wanda, reports say. Following the detention of Anbang's chairman, the message is clear: bold foreign M&A is out of bounds. The puzzle is why the authorities let the splurge last for so long.
Harley-Davidson’s Italian drive could prove pricey 22 Jun 2017 The U.S. motorcycle maker might pay up to 1.5 bln euros for rival Ducati, Reuters reported. The racy Italian brand would bring younger riders and more international customers. But unless Harley can rev up Ducati’s lacklustre earnings any deal would be financially corrosive.
Hong Kong needs actual fintech, not just IPOs 22 Jun 2017 The city is trying to lure hot financial technology listings. But it's a slow mover when it comes to mobile payments and e-commerce. In stark contrast with mainland China, much of Hong Kong still shops on foot and pays with paper. That reflects a broader struggle with innovation.
Oracle’s cloud warrants a partly sunny forecast 21 Jun 2017 Larry Ellison's software titan increased web-based storage and services revenue quickly. Oracle's retreat from traditional databases also isn't hurting as much as expected. Remixing the way cloud results are reported is suspect, though, and rival Amazon keeps growing fast, too.