UK shareholder battle upsets activist conventions 9 Jul 2018 Unhappy investors typically push for CEOs to step down. At infrastructure firm Stobart, fund manager Neil Woodford tried to get the chairman sacked. Iain Ferguson narrowly survived with help from rival Invesco. But the brawl puts little faith in investors guiding quiet change.
Xiaomi IPO will punish bankers twice 9 Jul 2018 The Chinese smartphone-maker’s shares opened below the issue price in their $54 bln debut. It’s not the start tech companies covet. Advisers failed to sufficiently lower an unrealistic valuation goal. Their penalty may be that other big listings in Hong Kong are delayed.
China’s offshore debt crackdown adds outflow risk 9 Jul 2018 Officials are curbing dollar bond issuance as the yuan weakens. Regulation of the $775 bln market has always been haphazard. This move looks reactive and clumsy. It will put more downward pressure on a faltering currency, and could inadvertently encourage capital leakage.
Rules of the road crystallizing for Chinese M&A 9 Jul 2018 Trade tensions and nationalism have tripped up transactions involving chipmakers Broadcom, Qualcomm and NXP, among others. Even as Beijing and Washington spar, though, dealmakers are adapting by scanning different regions or accepting smaller stakes and tougher conditions.
Aramco IPO retreat would leave few losers 6 Jul 2018 Pinning a $2 trln valuation on a company worth $1.6 trln was always going to be risky for the Saudi oil giant’s bankers. If Aramco’s IPO is scrapped, they may get another bite at a more modest cherry. It would, though, sting regulators who bent over backwards to accommodate it.
Steven Cohen finds limit of UK regulatory lenience 6 Jul 2018 Britain’s market watchdog has deemed the hedge fund manager not “fit and proper”, making it harder for him to operate in Europe. The tough stance is admirable, especially when London is at risk from Brexit. There are some standards regulators won’t ease to stay competitive.
White House learns wrong lesson from labor market 6 Jul 2018 U.S. employers added 213,000 jobs in June, continuing a hot streak. President Trump reckons he has enough of an economic cushion to ratchet up trade wars with China and Europe. Yet firms are already delaying investment and facing higher costs. The buffer may dissipate.
Weed wafts gently into investors’ portfolios 6 Jul 2018 Investors are warming to the devil’s lettuce. The action is mostly in Canada, which has over $25 bln of listed cannabis stocks, and rising volumes of M&A. But the U.S. is positioned to provide the metaphorical pickaxes, and big consumer brands will be watching for legal changes.
CEO exit is game changer for ThyssenKrupp 6 Jul 2018 Heinrich Hiesinger offered to quit the German conglomerate days after clinching an underwhelming steel JV with Tata. His long tenure and advocacy of the group’s conglomerate structure made him ill-suited to the action ThyssenKrupp needs. His replacement should be more radical.
Brexit dividend will be cashed in euros 6 Jul 2018 Nine months before Britain is due to leave the European Union its departure terms remain unclear. Prime Minister Theresa May’s latest plan cannot provide the certainty businesses seek: hence the shifting of investment and people elsewhere. Banks look set to lose whatever happens.
Review: A fleeting snapshot of India’s Bollygarchs 6 Jul 2018 “The Billionaire Raj” offers a colourful account of many types of cronyism afflicting the country, and whether India will descend into Russian oligarchy or give way to a U.S.-style progressive era. The pace of change, though, means some conclusions have already been overtaken.
U.S.-China trade war to be fought in the trenches 6 Jul 2018 The first round of tariffs hits Friday. Trump says they might come to cover over $500 billion of exports. Beijing will retaliate. This will hit exporters, then deter investment, impede research, and twist reform. Rising mutual distrust has resulted in tragedy.
Smartphone slowdown is least of Samsung’s problems 6 Jul 2018 South Korea’s $300 bln tech giant estimates quarterly revenue fell 5 pct from a year earlier. Weak handset sales will recover, though. More worrying are China's price-fixing probe into memory chips and new rules at home that could force a hefty batch of its stock onto the market.
China’s Fosun gets into bed with its boss 6 Jul 2018 The $16 bln conglomerate is adding matchmaking to its "happiness ecosystem", buying a dating service from Chairman Guo Guangchang for $600 mln. Baihe Jiayuan is a big brand, but sector growth is slowing and the price looks steep. This insider deal is unlikely to charm investors.
Credit Suisse princelings lack sting in Trump era 6 Jul 2018 The Swiss bank is paying $77 mln to settle U.S. probes into hiring friends of Chinese officials to win advisory work. It’s contemptible behaviour, but there are conflicts of interest around the White House too. Without the moral high ground, such punishments come off weaker.
Trump gives his team too long a leash 5 Jul 2018 Scott Pruitt, who has resigned from the U.S. environmental watchdog, had the president’s support for months despite a rash of ethics scandals. His departure shows there are limits, but others facing questions, like commerce tsar Wilbur Ross, needn’t worry yet: the bar is high.
Boeing’s $3.8 bln deal looks sleek, may not fly 5 Jul 2018 The aerospace giant is paying a fair price for 80 pct of Brazilian rival Embraer’s commercial-jet unit. Boeing can use the new joint venture to extend its dogfight with Airbus across the full range of aircraft. But Brasilia hasn’t signed off yet, and an election looms in October.
European TV can only dream of rivalling Netflix 5 Jul 2018 Broadcasters like ProSieben, ITV and Mediaset are losing viewers to streaming services and ad dollars to Google and Facebook. Together they could invest more efficiently in technology, but Europe’s fragmented market makes content hard to share. They look doomed to steady decline.
UK’s M&A referee owes Sky investors a late winner 5 Jul 2018 Disney’s sweetened offer for Fox does not extend to the UK pay-TV group’s other shareholders. Britain’s Takeover Panel could fix that by requiring the Magic Kingdom to pay up if its takeover of Rupert Murdoch’s empire succeeds. Unusual circumstances justify the intervention.
Auto tariff deal hopes are rightly restrained 5 Jul 2018 Carmaker shares rose after a German newspaper reported Europe may be able to avoid higher U.S. levies on exports. But BMW, Daimler and Volkswagen’s valuations are still down a fifth since January. Caution is sensible given the unpredictability of White House thinking on trade.
Glencore’s investor sunshine aided by U.S. cloud 5 Jul 2018 A $1 bln buyback will please investors wanting to see the commodities giant’s stronger balance sheet reflected in cash goodies. Yet Glencore is doing it as U.S. authorities demand details on anti-corruption compliance. Its usual gung-ho dealmaking may need to take a back seat.
Singapore makes Uber unlikely techlash test case 5 Jul 2018 City-state regulators say the ride-app’s merger with $6 bln Grab curbs competition. They want drivers freed up and prices held steady, but also threaten to undo the deal unless consumers are happy with the fixes. The hard line may be a small sign of what’s to come for Big Tech.
Chinese tension whips up a new chip super-cycle 5 Jul 2018 Micron suffered a fresh setback after a rival said a mainland court banned the $60 bln company from selling some circuitry in the country. Even as booming demand pushes prices up, legal battles and China’s quest for homegrown tech amid trade strains are reshaping the industry.
Malaysia taps brakes along China’s Belt and Road 5 Jul 2018 Prime Minister Mahathir Mohamad has suspended work on a $20 bln rail link between his country’s east and west coasts. It’s a rare setback for Beijing's massive infrastructure initiative. The project's importance, though, means Kuala Lumpur can afford to fight for a better deal.
Viewsroom: Is Silicon Valley getting nervous yet? 4 Jul 2018 The tech hub is getting squeezed by new policy restrictions amid a looming trade war between the U.S. and China. How is the Valley holding up? Plus: India's state lenders are losing CEOs. Is running these banks into the ground part of the plan?
High oil prices are as American as apple pie 4 Jul 2018 President Trump’s sniping at OPEC seems to be led by concerns about spiraling petrol pump prices. But these aren’t high enough to stop drivers from hitting the road. And while the U.S. remains a net oil importer, surging domestic production will also help the economy.
Hadas: The euro is not doomed 4 Jul 2018 The single currency is a “EuroTragedy”, Ashoka Mody writes. The Princeton professor sees fatal historical, political and economic flaws. But this drama is not over yet. The euro may still be part of Europe’s historic destiny, if destructive nationalism can be restrained.
Agarwal’s Anglo American carve-up looks a stretch 4 Jul 2018 The Indian billionaire is mulling a merger of his Vedanta empire with the global miner’s South African arm, Mint reports. The valuation case for a breakup is less compelling than it was. If Agarwal acts, it looks more logical to target the miner’s non-South African assets.
Danske cash gusher faces regulatory blockage 4 Jul 2018 The Danish lender may have helped launder 53 billion Danish crowns ($8 bln) in its Estonian business. The group’s healthy balance sheet helps, but a fine of 8 billion crowns or more could take the bank’s leverage ratio down to 4 percent, and risk generous shareholder distributions.
EU finally does right thing on taxing bank capital 4 Jul 2018 Under pressure from the European Commission, the Dutch government removed a benefit for banks that issue hybrid bonds. Other countries will follow. Tax breaks helped lenders rebuild capital after the crisis. The sector’s relative health means it no longer needs special treatment.