Asahi’s Tsingtao misadventure has one positive 21 Dec 2017 The Japanese brewer is selling 20 percent of its Chinese counterpart for $937 mln. The near-decade-long bet has not been time and money well spent. At least the sell-off suggests Asahi has sobered up and intends to focus on investments where it can exercise meaningful control.
Chinese government debt will go global 21 Dec 2017 A major index will include Chinese government bonds in 2018, dragging foreign money into a $9 trillion market. Beijing will appreciate the foreign stamp of approval. But sovereign guarantees will give scant cover against volatility spreading outwards from corporate credit.
China will plant a tech leadership flag with 5G 21 Dec 2017 The People's Republic will set many of the standards for ultra-fast mobile broadband. That will boost Huawei, ZTE, and others at the expense of foreign outfits like Nokia. This is a foretaste of the fights ahead for dominance of emerging technologies such as AI and electric cars.
China pulls disappearing debt trick 20 Dec 2017 Beijing talked up better-quality growth and risk management in its latest annual economic preview. But reducing the country’s $30 trln debt load, last year’s “top priority,” was barely mentioned. It’s a worrying sign if China’s leaders can’t kick the country’s credit addiction.
The Exchange: Newark Mayor Ras Baraka 20 Dec 2017 Will Amazon choose New Jersey's largest city as the location for its second headquarters? That's what hometown native Baraka is hoping - and he's lobbying hard to make it happen, even trying to cajole neighboring New York City to play a role in swaying the e-commerce juggernaut's decision.
Cox: Is Wall Street more democratic than America? 20 Dec 2017 Taxpayers in the most productive U.S. states would be forgiven for asking the question after the way Congress treated them with a slapdash tax bill skewed to corporations, not people. The big risk is that while capitalism becomes more representative, America goes the other way.
Wall Street’s next challenge: graceful retirement 20 Dec 2017 Investment banks face a triple bonus of tax cuts, rules rollbacks and rising rates. They’re on the most solid footing in a decade. That makes this the perfect time for some long-serving bosses to step back. JPMorgan’s Jamie Dimon is the logical first choice.
How to know if America’s big tax bet pays off 20 Dec 2017 Republican lawmakers have passed revised tax cuts that give even more breaks to companies and the wealthy. They are banking on those benefits trickling down to average workers. It could come back to haunt them. Breakingviews notes a few ways to measure the policy’s success.
Bitcoin insider trading lends veneer of normality 20 Dec 2017 Coinbase is investigating possible insider trading after the price of bitcoin cash surged just hours before the digital-wallet provider added the crypto-currency to its platform. Wealth always attracts fraudsters. And that, in turn, strengthens the case for regulation.
UK rolls out banking red carpet as EU rolls it up 20 Dec 2017 EU banks can continue to operate as branches in the UK after Brexit, according to Bank of England proposals. Meanwhile looming EU rules on bank holding companies and the bloc’s insistence on bonus caps and the like suggest UK lenders shouldn't expect much leeway in return.
Five possible triggers of the next market shock 20 Dec 2017 It takes a catalyst to set off a downturn and other reagents to sustain it. Breakingviews runs through a few more and less obvious elements: central-bank shocks, wayward exchange-traded funds, doubts about “crisis alpha,” unforeseen hedge-fund trouble and, yes, crypto-currencies.
Canada will be biggest loser in U.S. trade spats 20 Dec 2017 Trump threatened China and Mexico with tariffs, but the real levies hit Canadian lumber and Bombardier jets. While Ottawa is pushing other trade deals, America is its biggest export market. Souring NAFTA talks and fights over dairy, wine and paper make it the chief target.
Best thing Trump and Xi can do in 2018 is nothing 20 Dec 2017 The two leaders command half of the planet’s expected GDP growth. The biggest risks are more trade barriers, a Chinese housing market collapse, and armed conflict. All can be avoided if the U.S. president fails to use his powers and his Chinese counterpart opts not to use his.
LSE needs plan for itself, not just its bosses 20 Dec 2017 Hedge fund TCI's aggressive campaign to remove Chairman Donald Brydon failed. Yet the bruising soap opera over ex-CEO Xavier Rolet has exposed a lack of forethought. As well as its two top jobs, the exchange group needs to consider acquisitions – or selling itself.
Steinhoff meltdown has silver lining for hedgies 20 Dec 2017 The S. African retailer’s bonds collapsed amid an accounting mess. But investors are not suffering equally. Steinhoff's fondness for convertibles means more of them are now being sold, pushing them to lower prices than potentially riskier paper. Nimble traders can take advantage.
Fosun risks getting knickers in a twist in Italy 20 Dec 2017 The Chinese firm is in talks to buy Italian lingerie company La Perla. This is probably bargain-hunting mixed with a plan to expand in China. Underwear is a tricky industry in the People’s Republic, even at the luxury end. Making an attractive return will be tough.
Bitcoin finds unlikely ally in Asian watchdogs 20 Dec 2017 Japan and South Korea make up half of global trading volumes in the $300 bln bitcoin market. Tokyo has officially recognised digital currency exchanges. Seoul is mulling the same. Regulations help contain risk but also increase acceptance and allure of this untouchable cash.
India’s e-commerce war to surface on U.S. shores 20 Dec 2017 Amazon's arch-enemy Flipkart has good reason to snub Mumbai and head to New York for an IPO in 2018. Its biggest global peers are listed stateside. With SoftBank and Alibaba as backers, the $12 bln retailer is primed to take its local fight against Jeff Bezos to global investors.
China’s belt will get tighter and its road bumpier 20 Dec 2017 Xi Jinping's ambitious infrastructure plan enters its fifth year with some notable struggles. Countries are pushing back for political and economic reasons while Chinese banks grapple with mounting debt. So-called Belt and Road projects require more of a team effort in 2018.
U.S. banks get the hang of dying in living wills 19 Dec 2017 Watchdogs cleared the resolution plans of the eight biggest firms though four, including Wells Fargo, need improvements. It’s a far cry from 2016, when five failed outright. It’s progress not just because banks are safer, but because they finally understand what regulators want.
Jefferies bumper pay leaves shareholders wanting 19 Dec 2017 The Wall Street firm’s average comp of $530,000, or 57 percent of revenue, is far more generous than even Goldman Sachs. Reducing it to be more in line with rivals would still leave plenty for workers – and would almost double publicly traded owner Leucadia’s subpar returns.
Ex-Im revives just as it’s least useful 19 Dec 2017 A Senate committee rejected the nomination of Scott Garrett, a vocal critic, to lead the bank. It’s a sign that Ex-Im is bouncing back from its nadir in 2015. But with the economy roaring and tax cuts coming, the result may be mostly a small stimulus for big firms like Boeing.
Apple provides hedge against global tech backlash 19 Dec 2017 Authorities worldwide are stepping up action against technology giants over the way they erode privacy, use data to push rivals out of business and influence elections. As a security-minded purveyor of hardware, Apple stands apart. It’s likely to avoid the worst of the blowback.
Home-healthcare company pulls plug on itself 19 Dec 2017 Kindred Healthcare has gone out with a whimper, selling itself for a 5 pct premium to insurer Humana and two private-equity firms. Management may have been a bit too eager to put an end to the company’s uncomfortable public existence with the $4.1 bln deal.
Steinhoff creditors face a shrinking pot 19 Dec 2017 The South African furniture retailer lost nearly a fifth of its market value after failing to clear up accounting issues. Its debt levels are increasing and insurers are withdrawing credit guarantees. The risk is that there’s less and less for creditors to fight over if it fails.
C-suite is corporate America’s big sex scandal 19 Dec 2017 Females hold fewer than a quarter of senior executive titles, new research finds. And it’s getting worse. The tsunami of harassment exposés makes the paucity of women in leading positions even more egregious. Without change at the top, it’ll be hard to fix the broader situation.
U.S. political doomsday will hurt economic growth 19 Dec 2017 Republican and Democratic parties will splinter ahead of the 2018 election, marginalizing moderates. More firebrand politicians increases the chances of trade wars, a U.S. debt default and government shutdowns that harm the economy. Compromisers won’t be there to stop them.
Jefferies’ banking boom may herald happier returns 19 Dec 2017 The Wall Street firm grew investment-banking revenue 48 pct this year, which should outpace larger rivals. Fixed-income trading languished and U.S. tax cuts won’t get its ROE out of the doldrums. But favoring advisory and underwriting is a smart way to bolster performance.
South Africa’s turnaround will come only slowly 19 Dec 2017 The dominant ANC's choice of Cyril Ramaphosa to lead the party hints at an end to rampant corruption and economic decline. Yet reform - and even his election as president in 2019 - could be endangered by infighting. And promises of stimulus could jar with needed fiscal rigour.
Old Mutual sale pays off for star manager 19 Dec 2017 Veteran Richard Buxton and private equity group TA Associates are buying the company's "single strategy" investment arm for 600 million pounds. It's another step forward in Old Mutual's streamlining and breakup plan, but the acquirers look to be getting the best of the deal.