Venezuela’s Maduro enters alternate reality 3 Nov 2017 The OPEC member's socialist leader wants to restructure the ailing country's foreign debt, putting an alleged drug trafficker in charge of working out how. U.S. sanctions make any refinancing virtually impossible. But even default might not drive the hapless president from power.
AIG’s new boss creates flashback to its old one 3 Nov 2017 A $1.7 bln quarterly loss at the U.S. insurer abruptly ends Brian Duperreault’s honeymoon. Hurricane hits were expected, but an $836 mln addition to reserves for prior years was not. That’s the kind of problem the new CEO was meant to fix. AIG needs some underwriting discipline.
Review: “Junk” doesn’t entirely live up to its name 3 Nov 2017 In his highly anticipated new play, Ayad Akhtar draws a direct line to the economic crisis from a loose interpretation of the story of Michael Milken and the rise of the high-yield market. The production is mostly successful – especially for the financially uninitiated.
Europe’s IPO failures are a problem overshared 3 Nov 2017 Two UK companies scrapped their offerings, while Russian power group En+ priced at the bottom of its range. Several recent listings have flopped in their first days of trading. The one thing still rising is the number of banks working on IPOs. That’s part of the problem.
Torpid Société Générale needs new ideas 3 Nov 2017 A downbeat third-quarter report sets the stage for the French lender’s investor day later this month. Boss Frédéric Oudéa steadied SocGen’s course following the 2008 crisis. Nearly a decade into his tenure as CEO, though, the bank is looking stuck in a rut.
Altice’s French stasis is worrying omen for U.S. 3 Nov 2017 The telecom group’s revenue fell 1.3 pct in France, despite investment in broadband and content. Its U.S. unit is healthier, but is seeing its customers turn away from cable. With interest rates rising and margins high, founder Patrick Drahi cannot rely on cost-cutting or M&A.
Sina’s board wins Yahoo-like prize 3 Nov 2017 Bosses of the $8 bln Chinese web outfit thwarted a U.S. hedge fund's quest to add two directors. Sina's big problem is that it's worth less than its big stake in Weibo. As Yahoo laid bare, it can be hard to run a company whose value sits elsewhere – regardless of who's in charge.
Chinese markets can shake off post-party funk 3 Nov 2017 Following Beijing's twice-a-decade conclave, a so-called "congress put" that had kept trading calm in the run-up is wearing off. Investors are getting anxious again as a shadow-banking crackdown roils bond and money markets. Equities look first in line for policy reassurance.
Abe best off keeping Trump out of economic rough 3 Nov 2017 The Japanese premier has established an uncommonly good rapport with his U.S. counterpart. At their upcoming meetings, including on the golf course, Shinzo Abe would be well-served focusing on North Korea. Trade and currency matters only risk creating a momentum-slowing wedge.
Production snags don’t take the shine off Apple 2 Nov 2017 Customers ordering today won’t see the latest handset until December, and developers are still figuring out the augmented-reality apps that make it worth buying. Hiccups aside, the X model will accelerate demand for services. The iPhone gold mine has plenty of nuggets left.
Republican tax plan both sublime and ridiculous 2 Nov 2017 Reducing mortgage and interest deductibility has merit. So do some proposals for simplifying the code. But carried interest is left as is, one of several sops to the wealthy. Ideas on churches, childcare and state taxes look overly political or mean-spirited – and ripe for haggling.
Viewsroom: Saudi Arabia’s city of the future 2 Nov 2017 Crown Prince Mohammed bin Salman has a $500 bln plan to attract new business to the oil-dependent kingdom: build a utopian society on the Red Sea free of many of Saudi’s legal and cultural constraints. Plus: why tech and finance execs won’t be joining President Trump in Asia.
Carlyle clinches takeover of top Fed jobs 2 Nov 2017 Jerome Powell, the nominee to lead the U.S. central bank, is an ex-private equity partner. So is vice chair Randal Quarles. Carlyle co-founder David Rubenstein is a D.C. fixture, but for a while the firm tried to shed its politically connected image. Now it's unavoidable.
The Exchange: Ellen Pao 2 Nov 2017 The investor sued Kleiner Perkins for discrimination, becoming a canary in the coal mine for a raft of sexual-harassment and gender-bias allegations rocking Silicon Valley, Hollywood and beyond. She discusses if this is a turning point for what she describes as a systemic problem.
Botched Republican pitch bodes ill for tax cuts 2 Nov 2017 The revised plan only partly deals with criticism it benefits the rich. White House salesmen Gary Cohn and Steven Mnuchin did their own damage by defending cuts for the wealthy and vastly overstating middle-class income. Such poor marketing puts Trump’s economic goals in danger.
Northern Ireland crisis risks economy and UK unity 2 Nov 2017 Westminster will pass the region’s budget after government talks failed. A return to rule from London is likely. Key reforms will be shelved, growth stall, and sectarian tensions rise. A chaotic Brexit and hard border with the Republic of Ireland may inflame them further.
Bank of England rate hike has dismal logic 2 Nov 2017 The first increase in UK interest rates for a decade is no grounds for celebration. Rather, it’s an admission that Brexit has permanently lowered the country’s growth prospects. Governor Mark Carney must worry about inflation and a weak currency. The rest is up to politicians.
Axalta is a chip in DowDuPont’s paintwork 2 Nov 2017 Activist Nelson Peltz once pilloried chemicals giant DuPont for selling its coatings business to private equity. He was right. Axalta is now weighing a merger with Akzo Nobel. With a bit more love, it might have given investors in what’s now DowDuPont a 29 percent annual return.
Cox: Saudi crown prince revealed his magic number 2 Nov 2017 It's not a sum of money, but a year: 1979. Mohammed bin Salman's promise to return the kingdom to the more moderate society that prevailed before the siege of the Grand Mosque is a watershed moment. Global investors can play a role in helping the Saudis modernize.
Alibaba splurges to impress China’s store owners 2 Nov 2017 Sales are soaring at Jack Ma's $477 bln e-commerce giant. But it is investing heavily in experimental supermarkets and malls that show off its payments, logistics and marketing prowess to others. It's a costly way to keep Alibaba’s technology and services revenue growing.
Belt-tightening gives Tidjane Thiam breathing room 2 Nov 2017 The Credit Suisse boss delivered an 80 pct jump in third-quarter pre-tax profit despite lower revenue. An activist seeking to break up the Swiss lender can point to a misfiring investment bank. But cost-cutting and higher wealth management earnings give Thiam the upper hand.
Shell and BP stuck incinerating shareholder value 2 Nov 2017 After years adjusting to cheap oil, Shell and BP are beating earnings estimates and throwing off enough cash to cover dividends. BP will soon be buying back shares, too. It’s a start. But even if prices hold up, it will be years before their returns top their cost of capital.
BT leaves decisive dividend call on hold 2 Nov 2017 The UK telecoms group kept its interim payout flat and raised the prospect of investment in pricey full-fibre networks. Increasing the dividend while pleasing regulators may prove tricky. But ducking the trade-off for now means shareholders will have to dial up the uncertainty.
Booming metal markets test mettle of memories 2 Nov 2017 The frenzy over electric cars is helping push copper, nickel and cobalt prices to their highest in years. An expected supply squeeze is also a factor. After frolicking in London this week, global miners get a shot to prove they've learned from cycles past and can use cash wisely.
Hong Kong skyscraper deal induces acrophobia 2 Nov 2017 Tycoon Li Ka-shing is selling out of an iconic tower for a lofty $5.2 bln. The buyers are led by an unlikely owner, a Beijing-backed energy trader, according to a media report. They get just a 2 pct yield as the city’s richest man exits. It all screams top of the market.
India’s banks need more than just capital 2 Nov 2017 A $32 bln bailout will put banks back on their feet. But to compete with private sector rivals and prevent a repeat of past mistakes, further reform is needed. Longer terms for CEOs and better pay are vital. New Delhi should also transfer its stakes to a passive holding company.
Facebook’s long-term problem just got shorter 1 Nov 2017 Mark Zuckerberg vowed to do more to combat fake content in response to the fallout from Russia-backed ads. He warned profitability will take a hit just as the social network added almost $5 bln to the bottom line. As government scrutiny grows, the $500 bln firm has little choice.
Parts makers offer safer Auto 2.0 bets than Tesla 1 Nov 2017 Elon Musk’s outfit trades at an outlandish valuation on hopes it’ll lead the electric and autonomous car revolution. Yet it routinely misses targets and faces intense competition. Battery makers like LG Chem and Tesla partner Panasonic may pave a less volatile road to riches.
EQT and its critics make up to break up 1 Nov 2017 The gas company and activists are seeing the value of dialogue. After investors opposed a $7 bln plan to buy rival Rice, management has vowed to speed up work on a split. Shareholders now look set to approve the deal – and retain the threat of a proxy war to keep the firm honest.
Duff & Phelps deal puts price on wonky valuations 1 Nov 2017 Buyout firm Permira is paying $1.8 bln for the advisory and valuation shop. The firm ought to benefit from frothy asset prices, as clients seek help to avoid overpaying. An even bigger beneficiary might be seller Carlyle: in under five years, Duff & Phelps has doubled in value.