Congress will point way to China’s future 1 Sep 2017 An October date has been set for the biggest event in China’s political calendar: the twice-a-decade party congress. A reshuffle of the Communist Party’s top ranks will show how determined President Xi Jinping is to consolidate power – and hint at how long he plans to stay on.
Pyongyang turns yen into a very strange safe haven 1 Sep 2017 As Kim Jong-un’s missiles fly and Donald Trump threatens to respond, investors are taking cover in the yen. Odd choice, given Japan’s economic challenges and its awkward proximity to the action. That shows a lack of options among traders and complacency about escalating risks.
Soft tech dominance brings on hard fight 31 Aug 2017 The exit of internet-monopoly researchers from a Google-funded think tank signals a larger battle. Tech firms have reaped fortunes controlling search, data and advertising. The companies and regulators are slowly taking the concentration of influence more seriously.
Trump may unite Congress – against him 31 Aug 2017 The U.S. runs out of money in a month and the president is attacking lawmakers in his own party. That could prompt Republicans and Democrats to work together to keep the lights on. Plus: Rupert Murdoch could be overpaying for Sky.
Wells Fargo CEO exposed by supersized scandal 31 Aug 2017 The U.S. mega-bank uncovered another 1.4 mln potentially fake accounts. With the board and sales practices grudgingly refreshed, boss Tim Sloan, a 30-year Wells Fargo veteran, sticks out as a vestige of the old regime. New Chair Betsy Duke should rethink the case for keeping him.
Harvey’s damage will long outlast the storm 31 Aug 2017 The sun is out over South Texas but the toll from the hurricane’s record rains keeps rising. With refinery closures extending eastward and a chemical plant exploding, the governor says losses could top Katrina’s. Gas shortages and surging prices will spread the economic fallout.
Macron’s labour reforms are a gutsy start 31 Aug 2017 Changes such as greater bargaining freedom for employers will make the economy a bit more dynamic. The symbolism is as important. Introducing a highly unpopular cap on unfair dismissal payouts shows President Emmanuel Macron is willing to reform at the expense of poll ratings.
Elliott’s Stada shakedown is cheeky but rational 31 Aug 2017 The hedge fund wants the private equity firms buying drugmaker Stada to pay 74.40 euros for its minority stake. That’s nearly 50 pct above the firm’s value before Bain and Cinven began bidding. Yet Elliott has a point: the buyers could pay up and still make a respectable return.
Carrefour’s ills demand Tesco-like revamp and more 31 Aug 2017 The French supermarket said full-year operating profit could fall 12 percent, partly due to stiff competition at home. The grocer’s new CEO faces even more challenges than Tesco’s Dave Lewis did three years ago. Domestic market share is shrinking and its online offering is weak.
China’s big banks dig deeper into housing market 31 Aug 2017 ICBC, Bank of China, CCB and AgBank are extending new credit, though not as quickly as the wider financial system. Their restraint is welcome, as are signs of improving bad loans. But continuing to lend heavily into the country’s property boom could be storing up fresh trouble.
United Technologies’ avionics bid looks airworthy 30 Aug 2017 The conglomerate’s potential acquisition of Rockwell Collins should deliver enough cost savings to justify paying a reported $23 billion. Greater size also promises increased negotiating heft with Boeing and Airbus. Investors have good reason to clear this deal for takeoff.
India’s big-cash call generates surprise dividends 30 Aug 2017 Nearly all $242 bln of high-value notes scrapped nine months ago were turned in to banks. It also led to an unexpected jump in reported suspicious transactions. That gives the taxman a useful paper trail that may lead to benefits from this unorthodox monetary experiment.
Silicon Valley takes the slow lane to Washington 30 Aug 2017 The likes of Facebook and Amazon are desperately playing catch-up in the policy-shaping game. AT&T, Comcast and other internet providers have spent more than $100 mln lobbying over the last 18 months. It may give them an edge in the nasty battles over net neutrality and privacy.
U.S. tax reform plan can contain hidden loopholes 30 Aug 2017 The GOP no longer wants to tax worldwide corporate profits, which pushes companies to move overseas. It’s a good idea but may create other ways to dodge Uncle Sam. Accounting for assets like patents would help ensure firms, especially in tech, don’t game their government bills.
Russian bailout rekindles too-big-to-fail angst 30 Aug 2017 Otkritie, one of Russia’s biggest lenders, is being rescued by the central bank. It shows the perils of aggressive expansion and Russia’s incomplete system for winding up financial giants. The state has tried to draw a line, but the fact a systemic bank is in trouble is worrying.
German car industry may become Merkel’s nemesis 30 Aug 2017 Re-election in September will lumber Chancellor Angela Merkel with the challenge of managing a crisis that is looming in the auto sector. The fight for clean air in cities could accelerate the shift to electric vehicles and jeopardise up to a tenth of Germany’s industrial jobs.
Samsung Electronics is due a board upgrade 31 Aug 2017 The $300 bln tech giant is in disarray after the third-generation leader of its founding family was sentenced to jail. This would be a good time for other shareholders to push for a stronger board, bolstered by experienced outsiders and led by an independent chairman.
India’s tax attack on Li Ka-shing is a bad call 30 Aug 2017 New Delhi wants to wring the same taxes out of buyer and seller in an old telco deal. Slapping a $5 bln demand on Hong Kong’s CK Hutchison, while also chasing Vodafone, is farcical. If India really wants to end “tax terrorism” it should change its law and rein in bureaucrats.
Blackstone hunts Japanese deals – and pensions 30 Aug 2017 The U.S. private equity giant has hired a chairman in Tokyo and may earmark a chunk of a new Asian fund for Japanese buyouts. That should help it land money from local institutions, as they prepare to put billions of dollars into alternative investments.
Hadas: Economists aren’t as sexist as economics 29 Aug 2017 Insulting comments about women economists on an online forum have shocked the profession. The problem exists in other fields. The difference here is the dismissive attitude embedded in a discipline that tends to ignore cooperation and the care work usually done by women.
U.S. housing hangover shows few signs of lifting 29 Aug 2017 Home prices keep climbing as inventories sit at historic lows yet the pace of construction lags. What might stimulate builders is worsening affordability for millennials, and may be persuading boomers to stay put. A decade after the crisis, the market is still dysfunctional.
Harvey intensifies brewing flood-insurance storm 29 Aug 2017 The Texas disaster will put U.S. federal coverage, already $25 bln in debt, further under water. Among other snags, the subsidized program encourages building in high-risk areas. Climate change will worsen future events, too. Houston’s crisis is the ideal catalyst for reforms.
Permian fracking risk takes new reptilian form 29 Aug 2017 Using local sand to squeeze oil from stone rather than bringing it in would let West Texas drillers cut costs, offsetting the tab for transport, permits and water. In an illustration of the challenge, however, that may endanger a local lizard. It’s a novel threat to profit.
British banks edge closer to painful PPI clarity 29 Aug 2017 The UK watchdog is encouraging consumers to claim for mis-sold loan insurance by Aug. 2019. If it works, the 36 bln pounds big banks have set aside so far may not be enough. A firm deadline could make the final bill larger but is a necessary step in fixing finance’s reputation.
ProSieben flags slow-motion crisis for European TV 29 Aug 2017 Media stocks sagged after the German broadcaster cut ad-revenue forecasts for its main market. The optimistic reading is that a few big advertisers are holding back. But the divergence between buoyant GDP growth and sluggish TV ad spend points to the sector’s structural decline.
UK pay clampdown places enduring faith in markets 29 Aug 2017 The government will force companies to disclose how much their CEOs are paid relative to their workers. The move to restore public faith in business relies on shareholders to hold firms to account. But past efforts to improve transparency have failed to check corporate excess.
Toshiba aims to please all with chip deal 2.0 29 Aug 2017 The electronics group is trying again to sell its $17 bln memory business and avoid a delisting. Bringing in the troublemaking and previously snubbed Western Digital will avoid legal delays, without tripping on antitrust. And the deal can still look Japanese enough for Tokyo.
Macau tycoon’s movie spinoff is worth watching 29 Aug 2017 Lawrence Ho’s Melco International wants to spin off Studio City, a film-themed resort in China’s gambling enclave. The business has been in need of a script doctor. New cash would help it stay competitive and the listing would let Studio City’s two other backers exit stage left.
Harvey exposes flaws in U.S. energy-dominance plan 28 Aug 2017 Trump aims to boost American fuel exports by fostering coal and oil drilling. But the deluge in Texas has disrupted 16 percent of the nation’s refining capacity. Tackling climate change and hardening energy infrastructure should take priority over the president’s pet projects.
Gilead flies $12 bln kite to find cancer mini-me 28 Aug 2017 The purchase of Kite Pharma is reminiscent of Gilead's own history and past blockbuster deals. The $96 bln biotech is betting a plucky upstart has found cancer treatments that will change medicine, and society will pay the staggering cost. This protégé is a risky pupil, however.