European economy can help BNP clear low return bar 6 Feb 2018 The French lender lifted its 2017 dividend by 12 percent despite declining revenue and rising costs. Even though bad debts were lower, BNP Paribas fell short of its 10 percent return on equity target. An economic upswing should help it over the modest hurdle in 2018.
Intesa dividend pledge depends on Italian growth 6 Feb 2018 The country’s biggest bank promises 6 bln euros of net profit in 2021 thanks to a push into wealth and insurance products. If CEO Carlo Messina keeps his word, payouts to shareholders over the next four years will be 50 percent higher. But only if there are no upsets at home.
BP’s biggest hazard is size envy 6 Feb 2018 After years of Gulf of Mexico-related strife, the UK group is recovering. With oil prices high enough to pay comfortably for investments and dividends, the energy giant may be tempted to ramp up new projects in a bid to become bigger than Shell. That would be a mistake.
Wanda thriller casts Jack Ma in supporting role 6 Feb 2018 The troubled conglomerate is selling a $750 mln stake in its Chinese cinema chain to Alibaba. Dalian Wanda improves its financial picture and maybe its chances to add production to theatres. Ma, whose company just wrote down its studio investment, gets a shot to play hero.
Airshow buoyancy masks turbulence ahead 6 Feb 2018 Aviation bosses gathering in Singapore may want a serving of scepticism alongside the champagne. Rising oil prices, creaking infrastructure and too many seats will limit the gains from a regional boom in cheap flights. Full-service carriers could also hit air pockets.
U.S. stock plunge is a welcome reality check 5 Feb 2018 Indexes fell over 4 pct on Monday and share-price volatility surged to a seven-year high. Companies remain very profitable and higher bond yields should be no surprise. But a breather – at a minimum – was overdue after a record run. It’s also a reminder of shifting fundamentals.
Fed crystallizes Wells Fargo’s Tim Sloan discount 5 Feb 2018 Investors wiped $26 bln off the U.S. lender’s value after Janet Yellen censured it on her last day. That worsens the weak stock-price record since Sloan became CEO. Wells’ top line is growing more slowly than rivals’, too. A new boss could be the cultural change the bank needs.
Wolf-pack clauses deserve shareholder howls 5 Feb 2018 More companies have been adding these elements to poison pills. But it took activist Carl Icahn’s campaign against SandRidge to thrust them into the spotlight. The goal is to prevent shareholders from speaking to each other. That should prompt owners to join forces to stop them.
CFPB scores too low on Equifax transparency 5 Feb 2018 The consumer-finance watchdog is dialing back its probe of the $15 bln U.S. credit-scoring firm’s massive data breach last year. Trump’s CFPB head says the regulator has gone too far in the past. Perhaps – but if protecting vital data isn’t its remit, he needs to explain what is.
Bill Gates and buyout baron create negative impact 5 Feb 2018 The billionaire’s Gates Foundation is at odds with Abraaj, a buyout group, over a $1 bln fund to provide healthcare in emerging markets. The dispute underscores the tension in combining charitable and financial goals. The fallout will only fuel skepticism of impact investing.
Amazon can justify foray into UK soccer-rights war 5 Feb 2018 The tech group may bid to broadcast England’s Premier League. A head-on battle with Sky, which paid 4.2 bln pounds last time, would be costly. But Amazon could break even by buying just a few matches so long as 15 pct of rivals’ customers jump ship to its TV service.
Broadcom ups difficulty level for Qualcomm owners 5 Feb 2018 The chipmaker has raised its hostile bid to more than $120 bln. The merger is no more likely to pass antitrust review unscathed, though. And because Qualcomm’s owners would get roughly a quarter of the combined company, Broadcom’s overpayment becomes a serious risk for them.
Cox: Sliding stocks don’t surprise our readers 5 Feb 2018 From Mumbai to Milan, we polled participants at our Predictions 2018 summits. Even before last week's rout, most thought investors are too exuberant, bitcoin is a bubble and Donald Trump is doing poorly. More surprising were regional takes on NAFTA, Italian elections and Brexit.
Banks’ crypto caution reveals double standards 5 Feb 2018 Lloyds Banking Group’s ban on credit card customers buying bitcoin is part of a broader backlash against crypto-currencies. Lenders are protecting customers from losses, while trying to avoid future fines. It makes the futures markets’ embrace of bitcoin all the more jarring.
Ryanair buyback can only cushion so much turbulence 5 Feb 2018 The no-frills airline boosted earnings in the three months to December but faces a squeeze from pilot salary demands and still-low fares. A 750 mln euro share buyback will smooth the bumps for investors. But it cannot offset the transition to a lower-growth, higher-cost future.
Freed Samsung heir cannot escape reform spotlight 5 Feb 2018 A court suspended Jay Y. Lee’s prison sentence. With Lee’s family symbolising the state of corporate Korea, any perceived leniency will be controversial. But this does not look like a return to the bad old days of executive impunity. In any case, both sides can still appeal.
EU fund grab is smart politics but dumb regulation 5 Feb 2018 New rules could make it harder for London-based managers to oversee continental funds after the UK leaves the European Union. That would shift jobs and weaken Britain’s finance industry. But it would also restrict EU customers’ choice of investments. It’s a bad idea.
San Miguel serves up an enticing spread 5 Feb 2018 The conglomerate run by Filipino billionaire Ramon Ang is uniting beer, liquor and food using a complex share swap. San Miguel Pure Foods, a maker of liver paste and other fare, trades below the implied $9.1 bln valuation. There are reasons to think that financial gap will close.
Sequoia joins the frothy fund club 5 Feb 2018 The early backer of Google and Apple could raise $8 bln to fund startups that are close to floating, says Reuters. It’s a hot market but a largely unproven strategy. Huge sums being invested by Japan’s SoftBank are probably inflating prices too. Investors may do better elsewhere.
Ola puts SoftBank in back seat with overseas drive 5 Feb 2018 The Indian ride-hailing outfit wants a slice of the action in Australia. The intrusion into one of Uber’s strongholds will irk SoftBank, which is a big investor in both firms. The Japanese group’s minority stakes clearly are not enough to stop fights between taxi startups.
Yellen swan song could presage Wells CEO’s 2 Feb 2018 The Fed chief used her last day in office to slap a restraining order on the $2 trln U.S. bank. It’s mostly a symbol, and a late one: boss Tim Sloan has already started to clean up the company's act. But the Fed action could persuade Wells' new chair that it’s time for a change of leader.
Bad things may come in threes for stock investors 2 Feb 2018 U.S. wage growth and 10-year Treasury yields are both nearing 3 percent. The former may hasten rate rises and erode companies’ profits. The latter will boost borrowing costs and make it less attractive to hold stocks. That could spook an equity market priced for near perfection.
Half a Vodafone-Liberty deal is better than none 2 Feb 2018 The British mobile operator is in talks about buying overlapping European assets from John Malone’s cable group. Previous attempts have stalled. Excluding the two sides’ UK operations this time reduces possible synergies, but also lowers regulatory and financial barriers.
U.S. factories add jobs but could use more robots 2 Feb 2018 The economy added 200,000 jobs last month, including 15,000 in manufacturing. Donald Trump often talks of boosting the now smallish sector, but productivity has been near-stagnant and wage growth is weak. For all the fears of machines taking jobs, having more of them would help.
Exxon, Chevron use OPEC to enable bad old habits 2 Feb 2018 The oil majors posted poor earnings despite the cartel’s production cuts boosting crude prices. They also plan to pump more black gold and increase investment, despite shareholder concerns about inadequate returns and climate risk. Last quarter’s flubs signal more mess to come.
Deutsche Bank fails even to hurdle low bar 2 Feb 2018 Investors already knew the German lender would have another poor quarter. They didn’t know that 2018 bank costs would be higher than forecast. Worse, Deutsche’s once-proud sales and trading arm is again underperforming peers – and revenues in the rest of the bank are down too.
BT belatedly remembers it’s a telecom business 2 Feb 2018 Under new chair Jan du Plessis, the former UK telephone monopoly seems more focused on network investment than costly TV forays. It is building more fibre internet lines and may declare a truce with rival Sky on soccer rights. That should please both regulators and shareholders.
Italian bank veteran’s SPAXS attack is well timed 2 Feb 2018 Former Intesa boss Corrado Passera has raised 600 mln euros for a listed special-purpose vehicle. That will fund a low-cost digital bank which will lend to small businesses shunned by bad debt-laden rivals. With Italy’s economy rebounding, a selective approach could pay off.
Sony rolls opening credits on Turnaround 2 2 Feb 2018 Finance chief Kenichiro Yoshida is a good choice to lead the $62 bln group. The co-architect of Sony's overhaul can continue the aggressive revamp that has lined shareholders' pockets. Handsets and big shareholdings are two of the Japanese group's last big problem areas.
Vietnam’s Thatcherism could use an extra push 2 Feb 2018 PV Power is the latest successful privatisation for Asia's fastest growing economy. Despite a broad anti-graft campaign, stake sales are going gangbusters, as is the local stock market. That makes it easy to refrain from enacting deeper reforms, but they'd help sustain momentum.