Fed chair pick shows mastery of central-bank arts 28 Nov 2017 Jerome Powell breezed through his Senate confirmation hearing with Zen-like confidence. He dodged the tax-reform debate, kept rate-hike comments predictable, backed Fed independence and defended its bank-rules review. The prospect of post-Yellen stability will please markets.
Fred Goodwin’s ghost haunts LSE board fight 28 Nov 2017 In 2007 the forceful RBS boss led his bank into a disastrous deal, encouraged by Chris Hohn. The activist investor is now backing London bourse CEO Xavier Rolet against the company’s directors. Hohn’s call for Bank of England support has backfired. Goodwin may help explain why.
WeWork labors to keep itself looking different 28 Nov 2017 The shared-office provider’s latest purchase is Meetup. The social network’s get-togethers might fill WeWork’s space at slow times. But like investing in a wave-pool firm, starting a school and opening a gym, the consistent theme is desperation to not be a real-estate firm.
Slim chance of Kochs taking over Meredith media 28 Nov 2017 The campaigning U.S. billionaires are investing $650 mln in Meredith so the publisher can buy Time Inc. The Kochs get prefs with an 8.5 pct dividend but no board seats. Like Carlos Slim’s loan to the New York Times, the likely returns look more financial than political.
SocGen’s new recipe is missing key ingredient 28 Nov 2017 The French lender has unveiled new plans to boost lacklustre shareholder returns. Its targets are admirable but predicated on demanding revenue growth forecasts. Cost cuts would be more reassuring for long-suffering shareholders.
Britain’s Brexit-ready banks a boon for government 28 Nov 2017 The country’s lenders are robust enough to handle even a messy exit from the EU, according to the Bank of England’s latest stress tests. The clean bill of health will help state-owned RBS restart dividend payments, making it easier for the UK to sell down its 71 percent stake.
Unilever buys more time for HQ beauty parade 28 Nov 2017 The Dove soap maker will postpone a decision on locating its head office in London or Rotterdam. It avoids becoming a lightning rod for discontented voters for now. Sitting on its hands also gives the UK government time to offer up goodies that match or beat Dutch perks.
Ocado gets dubious halo as Europe’s Amazon bulwark 28 Nov 2017 The online retailer’s shares jumped by a fifth after it signed a deal to develop Casino’s digital offering. Investors are pricing in more agreements as European grocers react to the U.S. tech giant edging onto their turf. Ocado’s track record suggests they may be disappointed.
Wall Street chip analysts put a “buy” on research 28 Nov 2017 Bearish Morgan Stanley notes on memory prices were followed by $25 bln in lost market value for Samsung, TSMC and Western Digital. Despite an excess of cheerleading from the sell-side, it has the power to move markets. It's a timely reminder as the business model faces upheaval.
Uber backers face head-on collision with greed 28 Nov 2017 SoftBank is offering to buy shares in the ride-hailing firm at a $48 bln valuation. Even with a 30 pct markdown to the last fundraising, investors could cash out and make many multiples of their money. The prospect of a $500 bln colossus, however risky, will cloud the thinking.
Chinese trust hurries IPO before music stops 28 Nov 2017 A Shandong outfit wants to raise up to $450 million by listing in Hong Kong. Trust companies helped found China’s shadow finance system, but as Beijing squeezes off-balance sheet lending and competition rises from banks and startups, investor appetite is likely to be limited.
Microchip boom short-circuits Singapore’s growth 28 Nov 2017 Revised GDP revealed a surprisingly strong 5.2 pct quarterly lift for the city-state's $300 bln economy. As in other parts of the world, however, the expansion has yet to power wages or jobs. Cyclical semiconductor output flatters the figures and warrants investor caution.
Deckers takes on activist with two left feet 27 Nov 2017 The UGGs bootmaker promises to appoint two new directors next year. It’s a weak attempt to dance away from Marcato’s campaign to replace all nine board members next month. The pushy investor’s role has boosted the stock by 63 pct. Deckers’ leaders may fall flat on their faces.
Oil patch can use Icahn’s tough love 27 Nov 2017 The activist joined another angry investor to stop oil driller SandRidge's $746 mln acquisition of rival Bonanza. SandRidge adopted a poison pill to block him. It is an egregious example of oil companies chasing size at shareholders’ expense. On principle, it’s worth the battle.
Cowen deal collapse spells pain for Chinese firms 27 Nov 2017 Unexpected resistance from U.S. regulators led the investment banking boutique to scrap a stake sale to CEFC China Energy. Beijing connections once seemed to be the outfit’s entrée to global M&A but now loom as a big obstacle. Chinese companies may need a new overseas strategy.
CFPB leadership row won’t stop inevitable gutting 27 Nov 2017 It’s unclear who’s in charge at the U.S. consumer protection agency. The departing Obama-appointed director named his interim successor, as did the White House, provoking a legal fight. But Trump can name a permanent head, and make good on his promise to eviscerate the watchdog.
UK’s post-Brexit industrial plan lacks ambition 27 Nov 2017 The government has promised to boost research spending, improve education and upgrade infrastructure. Leaving the EU makes this more important, but less affordable. Even if Britain was not breaking from its largest partner, however, the goals would be strangely short of oomph.
BlackRock ETF bot makes turkeys of human managers 27 Nov 2017 Larry Fink’s $6 trln asset manager is turning to computers to run a new batch of exchange-traded funds tracking shifting industry sectors. Machine learning and big data should do it well and at low cost. It adds more worries for flesh-and-blood stock pickers.
Julius Baer CEO bows out at private banking peak 27 Nov 2017 Whizzkid Boris Collardi is leaving the Swiss group for smaller rival Pictet after eight years in charge. Bold deals and aggressive Asian expansion boosted earnings and lifted shares to record highs. Toppy markets and intense competition will make life harder for his successor.
BASF oil exit belatedly admits flaws of diversity 27 Nov 2017 The chemicals giant may merge its oil and gas unit with DEA, owned by Russian billionaire Mikhail Fridman, before an IPO. Cost savings of 1 bln euros partly make up for low oil prices. A broader lesson is that when companies try to span different industries, shareholders suffer.
Kuroda deserves second term at the Bank of Japan 27 Nov 2017 Prime Minister Shinzo Abe is being coy about whether Haruhiko Kuroda will get a second term as Bank of Japan head. Kuroda has earned it, and Japan’s deflation fight would benefit from continuity. But he also needs help from Abe’s team, which has been slow to enact vital reforms.
Time beats the clock in $2.8 bln deal 26 Nov 2017 After rejecting earlier entreaties, the publisher of People and Fortune is being bought by rival Meredith at a hefty 46 pct premium. It's a break for Time, whose go-it-alone strategy looked doomed. Bountiful cost savings, though, will help the buyer and backers the Koch brothers.
Jana’s Outback bet beats a walk in the Olive Garden 24 Nov 2017 The activist has taken a 9 pct stake in the Aussie steakhouse’s owner. Cheap grocery prices and the rise of delivery apps have battered such restaurants. It took a wholesale revamp by investor Starboard to turn Olive Garden around. Jana, though, may be targeting easier pickings.
Bankers’ rule-change wish list starts in the weeds 24 Nov 2017 Executives have plenty of regulations they want a more industry-friendly Fed to overhaul. But for many the top target is an obscure supervisory letter that has turned often minor infractions into roadblocks for everything from new branches to M&A. It’s unnecessary red tape.
Clariant and activist lack a positive reaction 24 Nov 2017 The Swiss chemical maker will devise a new strategy after its merger with rival Huntsman flopped. It rejected demands from White Tale to explore a breakup. Clariant cannot ignore its 20 pct shareholder, but the activist that scuppered the deal needs to propose as well as oppose.
Telecom Italia grid spinoff is no easy quick-fix 24 Nov 2017 The telecom group is reportedly exploring selling a stake in its network. A spinoff might boost TI’s valuation, and ease shareholder Vivendi’s feud with the Italian government. Yet fierce competition from rival Open Fiber would remain unsolved, and deter potential investors.
Review: Macron is a riddle wrapped in transparency 24 Nov 2017 A trio of books help explain how a political neophyte became the French president. One is a decent account of the election campaign, another delves deeper into his youth and family life. But even Emmanuel Macron’s own tome is short of detail on how he formulated his beliefs.
Indian family writes its own philanthropic code 24 Nov 2017 The Bhartis are donating $1.1 bln to their own foundation. Though the sum pales next to other billionaire pledges, there's a creative twist. Money will be used to start a university to teach AI and robotics, free to poor kids. There's no global playbook when it comes to giving.
China’s bond squeeze could spread offshore 24 Nov 2017 Beijing's hard line on risky lending is spilling into the sovereign bond market and knocking shares in financial companies. The stock volatility has limited international significance, but an onshore fixed-income panic could infect China's offshore dollar debt pile.
Big Food should resist organic Thanksgiving feast 23 Nov 2017 Natural-foods businesses have grown faster than processed purveyors of late. That makes $4.3 bln organic producer Hain a tempting target for Nestlé or others. But high valuations, changing consumer tastes and the looming threat of Amazon warrant moderation over M&A indulgence.