Wanda’s sports spinoff would help trim flab 5 Jan 2018 The Chinese conglomerate could float sports assets acquired in haste, including a sports marketer and a triathlon organiser, Reuters says. Fresh funds could help cover offshore debts. Streamlining might also persuade regulators to let the main property unit list onshore.
Breakingviews predicts a frothy, frustrated year 5 Jan 2018 Money is cheap, the global economy is motoring, and tech is reshaping the world. Populism is still driving discord and uncertainty, but markets are ebullient. From elections to electric cars, we offer a series of insights into what 2018 has in store for companies and economies.
Beijing will allow a local government default 5 Jan 2018 Despite a long campaign to rein in rampant off-balance sheet borrowing by cash-strapped regional authorities, the practice remains pervasive. Next year officials will tolerate the once-unthinkable: a bond default. That will rattle fixed-income investors onshore and off.
Electric cars will catch up with gas guzzlers 5 Jan 2018 Plans to ban dirty vehicles are stoking investment in clean transport, driving down costs. Consumers could find battery power as cheap as combustion engines for the first time in 2018. But it will be harder to drive up profitability. Automakers will struggle as margins tighten.
Fortress gives Apollo tough subprime bar to hurdle 4 Jan 2018 At $1.4 bln, Leon Black’s outfit is buying a stake in consumer lender OneMain at half its value two years ago. Yet the SoftBank-owned investment shop still bags more than a 10-fold return from the sale thanks to buying at the bottom. Apollo will have to be content with much less.
Elon Musk plays chicken with his own investors 4 Jan 2018 Tesla is missing output targets for its mass-market Model 3 yet again. Repeated delays risk denting the electric-vehicle brand and guzzling cash faster than expected. The combination could test shareholders’ loyalty just when Musk needs more capital for trucks and other projects.
Brookfield bets on nuclear plants aging gracefully 4 Jan 2018 Cost overruns building expensive, controversial nuclear plants got Westinghouse into trouble. Servicing, fueling and decommissioning them, however, is a more predictable business. That makes the $4.6 bln Brookfield is paying for the bankrupt Toshiba unit look realistic.
Viewsroom: Debt markets set for wild ride 4 Jan 2018 More government borrowing and less central bank buying will force bondholders to fend for themselves, Breakingviews predicts. Plus, passive funds will force out a CEO, electric vehicles give gasoline cars a run for their money and soccer clubs’ spending splurge will intensify.
Canada will export its pension model to U.S. 4 Jan 2018 Canada’s retirement funds are well funded and governed, run most of their money in-house, shun rosy assumptions and post good returns. As the need to lift returns increases, expect struggling U.S. public pensions to adopt at least some of their northern neighbors’ approach.
Debt markets will call time on equity rally 4 Jan 2018 U.S. stocks are rallying in tandem with bond yields. In the past 30 years, that has never happened for more than four consecutive quarters. If the pattern holds, one or the other will slide within six months. It’s more likely to be equities.
Intel flaws hint at tech “too big to fail” risk 4 Jan 2018 Researchers revealed bugs in the firm’s processors, as well as those of AMD and ARM, potentially making most computing devices vulnerable to hacks. Chipmakers need massive scale to justify huge investments, but a concentrated market means problems can become systemic.
Verizon will be one of 2018’s few mega-dealmakers 4 Jan 2018 As the ground shakes more strongly under the media and telecom industries, the U.S. wireless titan has only reacted tentatively. Owning Yahoo hardly qualifies as pivotal. Buying Dish, however, could make a difference. Big mergers are on the wane, but Verizon will buck the trend.
Investors will only curb CEO pay if forced 4 Jan 2018 The bosses of top UK companies have on average taken a pay cut, according to a new report. Fears of a political backlash made investors more apt to vote against chunky remuneration packages. The restraint may be fleeting unless a weakened government can keep up the pressure.
Oil bulls look to Trump rather than Iran protests 4 Jan 2018 A tightening global balance of supply and demand for crude means geopolitical shocks could push up prices. Anti-government protests in Iran seem unlikely to disrupt production. A looming U.S. decision on whether to revisit sanctions could have a bigger impact.
Germany will follow money in EU top jobs carve-up 4 Jan 2018 Jockeying to replace the region’s most powerful people, including European Central Bank boss Mario Draghi, will begin in earnest in 2018. Proposed new posts like a euro zone finance minister complicate the contest. Berlin will prefer control of purse strings to interest rates.
Didi provides glimpse into its global playbook 4 Jan 2018 In its first big step abroad, the Chinese ride-hailing powerhouse is paying $600 mln for control of Brazilian peer 99. The buddy-up first and buy later approach could mean Grab, Lyft or Ola will be next. It also suggests Didi-backer SoftBank may have a master plan, after all.
A 400 pct Chinese broker premium begs explanation 4 Jan 2018 Fog is thickening around a missing tycoon’s embattled empire. One holding of Xiao Jianhua’s Tomorrow Holdings, Hengtou Securities, said nine owners will sell a stake to CITIC Guoan for $1.4 bln, or five times the market price. Such mysteries undermine Hong Kong's investor appeal.
Hong Kong will start atoning for missing Alibaba 4 Jan 2018 The city lost many Chinese tech listings to New York. But it is building a critical mass of stocks, analysts and investors, and is poised to weaken governance rules in favour of founders. That sets the stage for the IPOs of rising stars Didi, Toutiao and Meituan-Dianping.
Clothing retailers will struggle to resize 3 Jan 2018 E-commerce isn’t the only thing plaguing outfits like Macy’s. U.S. apparel inventories have risen sharply since the financial crisis while prices and sales have fallen. Ripping the pattern requires slimming down and cutting back on discounts, but deal-seeking consumers may balk.
Voice-tech shouting match could end with a whisper 3 Jan 2018 The market for voice-controlled assistants and smart speakers is getting more competitive as Apple and others prepare to roll out gadgets or cut prices on those already available. Each is chasing a different kind of promised land. The reality may disappoint.
M&A frenzy sets scene for epic tug-of-war 3 Jan 2018 The $3.6 trln of mergers announced in 2017, including huge deals from Disney and Broadcom, sets up some chunky targets for cost cuts. That means job losses, even if buyers say not. Yet given the political climate, shareholders can’t count on the extra profit being theirs to keep.
Dominion finds value in Scana’s nuclear meltdown 3 Jan 2018 The Richmond-based energy outfit is acquiring the South Carolina utility in a $7.9 bln stock swap. Cleaning up the financial waste of Scana’s abandoned atomic plant will stretch Dominion’s debt, but gaining customers hungry for its natural gas should compensate.
Deutsche Bank bonus revival sends false signal 3 Jan 2018 A year after curbing payouts, CEO John Cryan has announced a return to “normal” variable compensation. Deutsche needs to retain staff despite subdued markets. With the shares trading at 60 pct of tangible book value, though, investors are still far from a return to normality.
Tech salad will come with a side of SLAW in 2018 3 Jan 2018 Spotify, Lyft, Airbnb and WeWork are all potentially going public in the coming year. None of them may ever match the scale of a FAANG or BAT. But each is disruptive in its own way, and offers investors a unique play on the future of cities, mobility, work and play. Bon appetit!
Hadas: Albanian mania is cautionary crypto tale 28 Dec 2017 Back in 1996, the Balkan state went wild for investment funds offering 30 percent monthly returns. The final cost was 2,000 lives and five years of lost GDP growth. Bitcoin’s 24 percent monthly gains in 2017 show similar foolishness, but a quick collapse could limit the harm.
EU’s market big bang offers clear pain, fuzzy gain 3 Jan 2018 Reforms bundled in the MiFID II directive aim to make finance fairer and safer. Rules that put a price on bank research and force trading out of opaque venues will cost over 2 bln euros to implement. Yet some exchanges face delays. In a global market, loopholes may also open up.
Ant’s U.S. march may require China-like steps 3 Jan 2018 Jack Ma's payments business will have to rethink its global strategy after its MoneyGram deal was vetoed. Even an alliance is at risk if rival Euronet bids anew. Instead, just as U.S. companies have bought small stakes in China, Ant could do the same with Western Union or PayPal.
Next cheer may delay essential style overhaul 3 Jan 2018 The UK clothing retailer is more upbeat about the outlook for full-year profit. The danger is that healthier sales and diminishing price pressures will tempt CEO Simon Wolfson to dodge tough decisions, such as much-needed store closures.
China’s small-fry banks will start merging in 2018 3 Jan 2018 Squeezed by tighter money, cooling property and anxious regulators, the country’s 4,399 lenders will begin to consolidate. Some deals will boost efficiency; others will force crummy assets into healthier banks. For foreign buyers, the challenge is telling which is which.
Duterte’s infrastructure push needs more than cash 2 Jan 2018 A new revenue-raising tax bill will help Philippines President Rodrigo Duterte pay for a “golden age of infrastructure” to increase competitiveness and living standards. The challenge will be to deploy the proceeds efficiently and without fostering corruption.