These retail chains can resist the Amazon vortex 28 Aug 2017 If investor judgment is any guide, Ross Stores, Home Depot and AutoZone may have the wherewithal to withstand the apocalypse wrought by the e-commerce titan, which just swallowed Whole Foods. All of them either match or beat Amazon’s multiple of enterprise value to future sales.
Water woes may leave green-car hopes high and dry 28 Aug 2017 Ford is the latest to ramp up electric-vehicle production with a deal in China. But the industry relies heavily on the Democratic Republic of Congo for a crucial battery material. Drought, abysmal infrastructure and conflict could put ever-increasing supply needs at risk.
Uber’s new CEO choice will travel well 28 Aug 2017 Expedia boss Dara Khosrowshahi is a surprising but solid pick to run the ride-hailing firm. He has led a newly public travel company, delivering shareholder returns and ticking the right boxes on diversity. Still, Uber’s scale and fluid business model makes it a bigger challenge.
SoftBank’s Vision Fund has $34 bln jackpot in sight 28 Aug 2017 Japan’s Masayoshi Son is nearly done raising a $100 bln tech war chest. If investments double in value, SoftBank’s own holdings would swell by $28 bln, and it would share in nearly $6 bln more of profits. The challenge is finding good, big bets in already expensive markets.
An Estee Lauder auction would get juices flowing 25 Aug 2017 Unilever is weighing a bid for the $39 bln makeup firm, says a report with a whiff of summer silliness. It might have its reasons to ponder a deal. But P&G and L'Oreal wouldn't let it go uncontested. With Lauder stock already pricy, the appeal may be more cosmetic than real.
Yellen sets out her stall for Trump 25 Aug 2017 In what may be her last Jackson Hole set piece, the Fed chair defended tighter regulation since the crisis 10 years ago and called for continued U.S. leadership in global forums. The president wants to unwind the reforms. It's a factor as he considers whether to reappoint Yellen.
Consumer giants’ disclosure is near sell-by date 25 Aug 2017 Firms that make food and personal-care products are pouring money into startups and young brands. Unilever, the most acquisitive, has made 15 such deals since 2014. Yet they don’t give investors enough information to judge their dealmaking nous. It could be their loss.
Accounting revamp does European banks a favour 25 Aug 2017 Changes that come into force in 2018 will force lenders to provision for bad loans in a new way. Banks say earnings will be more volatile as a result. Perhaps at the outset. But the switch will also make them safer and lower their cost of capital over the economic cycle.
Spotify’s business model is an unfinished symphony 25 Aug 2017 The streaming service is closer to an IPO after sealing deals with music labels like Warner. But Spotify’s ability to turn a decent profit is still in doubt since it may not have won much ground on royalties. Apple and Amazon also pose threats that could deter investors for now.
Samsung guilty verdict is a victory for reformers 25 Aug 2017 The de facto leader of South Korea's biggest business faces five years in jail after an historic corruption trial. Assuming the sentence is not overturned, this boosts President Moon, who vowed to rein in powerful conglomerates. It should scare other bosses into behaving better.
Infosys founders get second chance on succession 25 Aug 2017 Nandan Nilekani will return to chair the IT firm he helped found. That is less than ideal - but could calm investors after its first outside CEO quit. The reputation of the king of Indian fintech now rests on bringing in new faces and leaving a firm that won't crash again.
How the Bank of Japan can keep the money flowing 25 Aug 2017 The disappearance of inflation is the big debate for central bankers in Jackson Hole this weekend. That puts Japan in an uncomfortable spotlight. The BOJ is running short of government bonds to buy - but could do more by becoming more creative in its asset purchases.
Japan Inc now chases unicorns, not Sunflowers 24 Aug 2017 SoftBank is putting an astonishing $4.4 bln into WeWork, a purveyor of hip shared office spaces. Growth means Masayoshi Son’s outfit may fare better than Japanese firms that once splurged on Impressionist paintings and Rockefeller Center. But those assets weren’t easy to copy.
Viewsroom: Fiat Chrysler’s painful choices 24 Aug 2017 Great Wall Motor wants to buy Jeep. That’d leave the Italian-American carmaker cash rich but devoid of profit in a fast-changing industry. Meanwhile, Uber tries to find a silver lining to the cloud its drivers are under. Plus: what makes China’s unicorns a different breed.
Trump’s dressed-up coal pitch lacks rich seam 24 Aug 2017 A U.S. government report properly identifies cheap natural gas for making the solid carbon uneconomic and undermining grid reliability. Some suggested remedies make sense, but others seem designed more to appease a president pledging to save coal jobs than to address the problem.
Cox: No, wait, this is the real crisis anniversary 24 Aug 2017 Anyone who witnessed the subprime debacle has a single event they identify as its origin or apex, from HSBC's losses to Lehman's bust. Like all bubbly delusions, understanding the collective failure to act pre-emptively requires an appraisal of the full arc of what transpired.
SPAC solves none of tech world’s hardest problems 24 Aug 2017 A new venture says its $500 mln blank-check IPO can help end the dearth of public offerings from tech startups. Yet capital is plentiful, an opaque acquisition won’t improve valuation, and the target would still be stuck with public disclosure. This solution has no real value.
America’s opioid-industrial complex ensnares pets 24 Aug 2017 Pharmaceutical makers, rehab facilities, security firms, prisons and funeral homes profit from the country’s addiction crisis. Now a pet-medicine seller stands accused of cashing in. The U.S. economy of addiction has grown so large that most consumers are numb to its presence.
Central bank confab may be calm before the storm 24 Aug 2017 With the U.S. and global economies in good shape, Yellen can enjoy what may be her last show in Jackson Hole. But fiscal fights in Congress, Fed bond sales and doubts about her future loom. The ECB nears its own taper even as low inflation confounds. Gray clouds are moving in.
Deutsche sets tone for painful analyst price war 24 Aug 2017 Deutsche Bank has halved the going rate for its fixed-income research, which clients must soon pay for separately under new European rules. Banks may have to give even more ground. Buyers will only get more demanding – and may want to pick which boffins they really need.
Dixons double whammy is surprise that wasn’t 24 Aug 2017 The UK electronics retailer’s shares fell 30 percent after profit guidance was cut. The main culprits, EU roaming rules and a Brexit-linked consumer slowdown, were known risks. Analysts and the company underestimated their impact. Too much faith in forecasts breeds market jolts.
Telecom Italia breakup is a three-way tug of war 24 Aug 2017 Government ministers are talking about separating Telecom Italia from its network. A breakup could be beneficial for the Italian government, and TI’s biggest shareholder Vivendi. Other shareholders would be harder to satisfy.
Samsung is worse off regardless of trial verdict 24 Aug 2017 A jail sentence for de facto leader Jay Y. Lee would leave Samsung’s flagship $300 bln unit rudderless. A legal victory would create problems, too: Lee’s defence of wielding little power at the wider group damages his authority. It has a leadership deficit either way.
Mitsui Sumitomo makes pricey advance in Asia 24 Aug 2017 The Japanese group has swooped on Singapore’s biggest property and casualty insurer for $1.6 bln in cash. That equates to an expensive-looking 3.3 times book value. Still, the deal will consolidate the buyer’s already strong presence in fast-growing Southeast Asia.
Samsonite luggage could travel more 24 Aug 2017 The world's largest luggage-maker reported flat earnings in the first half, as it digests a big acquisition. Alone among fashion stocks, Samsonite offers a unique pure play on travel. But for all its globe-trotting image, it looks over-dependent on American demand.
Endowment CIO pay demands greater academic rigor 23 Aug 2017 The boss of Harvard’s $35 bln fund recently made nearly three times as much as the head of Yale's $25 bln pot despite much weaker returns. Colleges generally base compensation more on size than performance, as companies tend to do with CEOs. They should grade more carefully.
Lowe’s No. 1 target is Home Depot, not Jeff Bezos 23 Aug 2017 The $60 bln DIY retailer clipped its operating margin growth for 2017 to ramp up marketing. That sliced $4 bln from its market cap. Attracting more shoppers to visit outlets in search of home-improvement stuff underscores an increasingly bitter rivalry with its $180 bln peer.
Trump antics may be virus, cure for uneasy market 23 Aug 2017 The president threatened a government shutdown over border-wall funds as the risk of a U.S. debt default looms weeks away. Trump is angering the lawmakers he needs on the issues. Ironically, his divisiveness could actually unite the middle to resolve these economic hurdles.
Beware Brazilian promises to relinquish control 23 Aug 2017 The cash-and-corruption-challenged government dangled the idea of reducing its 51 pct voting stake in Eletrobras, the electric utility. While that sent the shares soaring by half, investors need only recall Brasilia's past stewardship at Petrobras and Vale to slow their samba.
Uber could help itself by giving drivers equity 23 Aug 2017 The ride-hailing firm is considering handing them stock. They aren't employees, so the SEC would have to agree. The plan could boost Uber's damaged brand and help keep drivers. Other gig-economy workers might gain, too. But existing irate investors could present a roadblock.