Wall Street loses in search for easy China wins 1 Nov 2017 Energy and industrial companies like GE will get to cozy up to Beijing’s new leaders during Trump’s Asia trip, but financial services aren't part of the group. That reflects White House desires for low-hanging deals to tout, and dim hopes for improved market access.
Tencent’s hit spinoff reads like a prologue 1 Nov 2017 China Literature’s $1.1 bln IPO priced at the top of the range. That could encourage parent Tencent to list other units, which would both raise capital and lessen the regulatory scrutiny on some businesses. The most radical move would be floating crown jewel WeChat.
Placing new wagers may sustain Macau’s hot streak 1 Nov 2017 High-rollers flocking to the tables helped gaming revenue jump 22 pct last quarter to $8.3 bln. Everyday punters are a smarter bet, though, for Sands, Wynn and other casinos. Despite stiffer competition for such customers, their larger numbers and fatter margins improve the odds.
Bain may have to rotate Axis to justify $1 bln bet 1 Nov 2017 The U.S. buyout group is reportedly eyeing a 5 percent-plus stake in India's third-largest private sector lender. That would provide capital to deal with bad loans, and Axis could use help in running a tighter ship. Bain will have to find a way to spur change using a small stake.
Pragmatism could give bank deregulation new life 31 Oct 2017 U.S. House Financial Services Chair Jeb Hensarling will retire at the end of 2018. The Texan pushed innovative ideas for undoing Dodd-Frank but failed because of a dogmatic stance that alienated even some Republicans. His successor would do better to not follow his example.
Complacency is biggest risk for Facebook investors 31 Oct 2017 Mark Zuckerberg’s firm set new highs even as it said nearly half of American voters may have seen Russian propaganda on its site. The fallout from fake content could hit its runaway value, but investors can’t be bothered as long as advertisers keep flocking to the social network.
Emerson’s tilt at Rockwell lacks killer blow 31 Oct 2017 The rejected $28 bln offer for the U.S. automation group represents a premium of just 15 pct, paid partly in stock that has systematically undershot Rockwell’s. With valuations high, an all-cash bid might have tested the target’s independence. That looks beyond Emerson’s means.
Aetna lays out its insurance value for CVS 31 Oct 2017 Revenue at the $56 billion health-coverage firm fell 5 pct last quarter, partly from dumping some Obamacare policies. But profit jumped 48 pct. That offers alluring protection for CVS, whose pharmacy and drug-benefit business is threatened by rising competition and transparency.
UK student loan sale has costly Corbyn hedge 31 Oct 2017 Britain is pushing ahead with the sale of 4 bln pounds of loans, despite Labour leader Jeremy Corbyn’s promise to ease student debt. Investors will get compensation from a complex scheme if government policy changes. That further strains the logic of the sale.
Hadas: Martin Luther’s unexpected business legacy 31 Oct 2017 The German theologian could hardly have cared less about commerce and manufacturing. But 500 years after his complaints about cash-for-grace deals started the Protestant Reformation, intrusive governments, big companies and individualist consumerism are all greatly in his debt.
Under Armour’s governance is a value trap 31 Oct 2017 The sportswear firm’s stock tanked after a rare drop in quarterly sales. Broader retail woes don’t help. But shares have plunged two-thirds since founder Kevin Plank cemented control with non-voting stock. That gives investors little room to exercise the company back to health.
Burberry can lose kid gloves along with Bailey 31 Oct 2017 Designer Christopher Bailey is leaving the British fashion brand after 17 years. It has taken the company three years to unpick the deferential 2014 decision to hand him the CEO role. His exit gives new boss Marco Gobbetti a freer hand to implement much-needed turnaround plans.
BNP Paribas earns benefit of capital doubt 31 Oct 2017 A drop in trading profit failed to do much damage at the French bank, which reported an impressive 11.6 pct return on tangible equity in the third quarter. Beating its own return targets, even though they’re modest, should help dispel perennial questions over BNP’s capital level.
WPP woes cement Mad Men bargain-basement valuation 31 Oct 2017 The group may cut targets for the third time this year. Advertising firms are grappling with frugal customers and online sales. Investors rate them as lowly as media dinosaurs like newspaper sellers. M&A options look tricky. Their best bet is to hope clients start spending again.
UniCredit NPL glitch muddies Italian bank cleanup 31 Oct 2017 The ECB is reportedly examining whether the bank inflated the price of a $21 bln bad-loan sale, a move that could hurt its capital. It’s surprising as UniCredit’s valuations were less rosy than peers. Regulatory confusion gives lenders more reason to cling on to dud loans.
Twin tailwinds help Ryanair weather pilot crisis 31 Oct 2017 The 20 bln euro no-frills airline will meet its full-year profit goal despite a rostering mess that cost it thousands of flights. Passenger numbers were up 11 pct in the six months to September. Ryanair’s fare cuts helped, but it also got lucky with rivals’ bankruptcies.
Sony’s success may delay further disentangling web 31 Oct 2017 The Japanese group riding high on Spider-Man is also thriving in games, chips and music. It now expects annual operating profit to hit a record $5.6 bln. That's testament to a long overhaul, but also increases a temptation to stay in areas like phones, TVs and financial services.
It’s past time for PetroChina to shed pipelines 31 Oct 2017 China’s largest oil and gas producer reported a 290 pct rise in quarterly earnings. The firm should now spin off its $87 bln pipeline network and share the gains with weary investors. Management might not like a breakup, but fortunately, state planners are here to help.
Glencore’s Hong Kong exit sends message to Aramco 31 Oct 2017 The secondary listing touted as a gateway to Chinese investors during the miner's 2011 IPO never lived up to the hype. The same goes for Coach and others, who could be forgiven for following Glencore out. It's also a good sign the Saudi oil titan can cross Hong Kong off its list.
Samsung’s new bosses will have to be generous 31 Oct 2017 The tech giant is raising dividends to at least $26 bln through 2020. A tweaked returns policy also gives Samsung's three fresh CEOs-in-waiting and newly separate chairman room to hand back even more. That would help keep outside investors onside for an eventual restructuring.
It’s getting better to be a big Chinese bank 31 Oct 2017 A crackdown on shadow banking helped the country's four state-owned giants in the third quarter. With over half the listed industry's deposits under their control, they can squeeze smaller lenders. That leaves them better-placed to cope with any fallout from China’s debt boom.
Markets prove regulator’s point on Sprint/T-Mobile 30 Oct 2017 Antitrust authorities are skeptical a merger of the third and fourth U.S. wireless carriers will benefit the public. Verizon and AT&T shares fell on news the deal hit a snag. Investors are betting consolidation will produce higher industry profits at the expense of competition.
Russia mess sucks up U.S. economic bandwidth 30 Oct 2017 The first charges in the 2016 election-meddling investigation snagged President Donald Trump’s former campaign manager. That diverts White House resources better used elsewhere: namely reforming taxes, picking a new Fed chair and preparing for a high-stakes Asia trip.
Constellation Brands takes the party up a notch 30 Oct 2017 The Svedka vodka and Corona beer maker's mission is to "elevate life with every glass raised." By purchasing 9.9 percent of Canada's Canopy Growth for C$245 mln it can add tokes of marijuana to that vision. It's telling to see big booze beat big tobacco to the fiesta.
For-profit college deal textbook merger of equals 30 Oct 2017 Strayer and Capella are forming a company worth $1.9 bln as regulatory pressures force them to improve the quality of their degrees. Pooling resources, and slicing out $50 mln in costs, gives them a better chance to disrupt America's overpriced higher-education racket.
Utility merger rightly up against Texas brigade 30 Oct 2017 Vistra is buying Dynegy in an all-stock deal to create a power dynamo stretching from Texas to Maine. It makes sense for shareholders, but regulators in the Lone Star State are prickly. The firms will have to allay concerns that synergies will come out of consumers’ pockets.
Homebuilder $18 bln merger hits just enough nails 30 Oct 2017 Lennar has agreed to buy smaller rival CalAtlantic at a 27 pct premium, creating the largest housebuilder in the U.S. The logic seems solid, and the expected $250 mln in cost savings mean that Lennar can afford the markup, though with little left over to feather its own nest.
UK gender pay equality drive is too easy to skirt 30 Oct 2017 Bigger employers have less than six months to disclose any difference between how much men and women earn. Transparency is supposed to help close the gap. But Austria has tried something similar to little effect. Only the threat of eventual sanctions will make a real difference.
Axalta deal complicates Akzo’s juggling act 30 Oct 2017 Fresh from deflecting a takeover, the Dutch group is considering a merger of its paints unit with its U.S. rival. A combination makes sense. But new CEO Thierry Vanlancker is already grappling with weak results and a chemicals spinoff. That raises the risk of dropped balls.
Novartis avoids danger with nuclear M&A option 30 Oct 2017 The Swiss drugmaker is paying $3.9 bln for France’s Advanced Accelerator, which uses radiation to fight tumours. The deal is at a hefty 47 pct premium, but it’s logical and ticks financial boxes. It won’t drive investors wild, but they don’t need to run for the shelters, either.