Delaying NAFTA deal is actually a win-win-win 31 Aug 2018 Canada and the United States will keep talking despite missing a deadline to resolve trade talks. Negotiators will need to move quickly to avoid the risk of fresh demands from the next Mexican government. But a NAFTA that all sides can sell is more important.
Skilling could have earned stripes more usefully 31 Aug 2018 The former Enron CEO was released from prison into a halfway house. During his time behind bars, corporate malfeasance flourished but prosecutions dropped. Using high-profile arrests as a deterrent doesn’t work if prosecutors don’t catch criminals. Felons could help.
Review: Barry Cohen is a hedge-fund Frankenstein 31 Aug 2018 The protagonist of “Lake Success,” Gary Shteyngart’s new novel, comprises equal parts of financiers like Paul Singer, Howard Marks and Mike Novogratz. Running from a Valeant-like scandal, he hits the road through America’s heartland in search of his moral compass.
Coca-Cola pays big price for global coffee fix 31 Aug 2018 The soda giant is spending $5.1 bln on the Costa chain of cafes. Justifying the frothy 16 times EBITDA multiple requires Coke to order up new markets for hot drinks. It’s another reminder of consumer groups’ lust for coffee. Investors in seller Whitbread are the big winners.
Foreign exodus to test Italy’s bond market buffers 31 Aug 2018 Fear of bold public spending is spooking foreign investors, making it harder for the government to fund itself. Italy can lean on banks and local savings to plug the gap. But gorging on debt hurts lenders and growth. And “Quitaly” concerns may lead Italians to move cash abroad.
Tencent’s big battle goes from fantasy to reality 31 Aug 2018 The “Honour of Kings” maker lost another $20 bln in market value on a fresh videogames crackdown. This time, Chinese officials say they’re worried about myopic kids. It leaves investors exposed to nearly unpriceable risks and Tencent’s failure to build new businesses fast enough.
China’s yuan support scaffolds its developers too 31 Aug 2018 Real estate firms like Evergrande are sitting on some $120 bln in offshore dollar debt, nearly double 2016 levels. That’s a worry as the yuan weakens, raising costs. Beijing's latest efforts to slow the currency’s decline, though, has bought a critical sector some time.
Huawei’s hang-ups open 5G line for Samsung 31 Aug 2018 Japan may soon echo U.S. and Australian restrictions on the Chinese telecom equipment maker and peer ZTE. That should help South Korea’s $280 bln titan make a move in the markets. Nokia and Ericsson will challenge for share, too, but Samsung’s heft and stamina give it an edge.
Viewsroom: The financial crisis, 10 years on 30 Aug 2018 The crash cost the U.S. economy $30 trln, put 9 mln people out of work and as many families out of their homes. And it exposed how unprepared bankers, lawmakers and watchdogs were. Here we preview our podcast miniseries interviewing some of the movers and shakers of the time.
“No” is the best answer for SurveyMonkey IPO 30 Aug 2018 The online survey firm is nearly two decades old, but it continues to lose money and releases little of its historical financial results. That’s presumably because growth isn’t impressive for a tech firm, and the key to turning a profit remains elusive.
Virtuous Macri circle turns vicious for Argentina 30 Aug 2018 The pro-market leader of Latin America’s No. 3 economy has been laying the basis for long-term prosperity. But inflation, drought and soured investor sentiment threaten his efforts. A new run on the peso, and desperate rate hikes, make a return of his Peronist nemeses more likely.
Campbell lukewarm sale pitch is begging for a cook 30 Aug 2018 The $12 bln soup and snack company plans to sell its fresh and international food brands, and step up cost cuts on stagnant core brands. It’s leaving the door open for a sale, but that’s unlikely to appease activists like Dan Loeb. A focused auction would be a better approach.
Nigerian problems cast doubt over MTN payout 30 Aug 2018 The country’s central bank says the mobile phone group’s local unit illegally paid $8.1 bln to its South African parent. Though MTN denies wrongdoing, its shares are down more than a fifth. Blocked payments from its most lucrative market would threaten MTN’s punchy dividend plan.
UK sub-prime lenders shrug off political cloud 30 Aug 2018 Amigo and Non-Standard Finance have found a smart formula: get risky borrowers’ friends and family to guarantee loans. That means cheaper rates than payday lenders, such as the struggling Wonga, and happier regulators. Yet a growing backlash could still hit their rich valuations.
U.S. creeps into EU’s money-laundering blind spot 30 Aug 2018 A new anti-money laundering directive seeks to plug holes in Europe’s leaky banks. But the rules don’t address the core problem of relying on local supervision. Until the EU can establish an independent AML authority, the U.S. will continue to act as the bloc’s de facto top cop.
Hays gives dismal performance review for UK plc 30 Aug 2018 The British division of the 3 billion pound recruiter is cutting staff, and barely growing. Luckily, the sluggish UK economy was offset by hiring in Germany and Australia. Like Hays, UK companies will increasingly have to seek their fortune overseas.
Australia’s $11 bln telco deal dials up high hopes 30 Aug 2018 TPG Telecom and the Vodafone Hutchison joint venture are coming together. The merger reduces chances of a price war and the market is implying hefty synergies can be achieved. It should ease Vodafone’s exit and even rival Telstra may come out ahead.
Chinese battery makers can win EV recycling race 30 Aug 2018 Metals recovered from spent car cells could be worth more than $20 bln a year within a decade. Western chemicals groups like Umicore already profit from waste. But with half of the world’s electric cars sold in the People’s Republic, locals like CATL and BYD can pull ahead.
Puerto Rico revival needs death-and-tax certainty 29 Aug 2018 The official death toll from last year’s hurricane has just jumped almost 50-fold. The delay is emblematic of San Juan’s longer-term problems tracking and recording everything from paying workers to collecting taxes. Without improvement, it’ll be tough for the island to prosper.
U.S. pension pots both half full and half empty 29 Aug 2018 Buoyant markets have helped public and corporate retirement plans boost funding to the highest levels in years. They can’t afford to relax though. Pensions are still weaker than they were before the crisis, and the bumper returns of the past five years are unlikely to continue.
The Exchange: Beth Comstock 29 Aug 2018 Over two decades at General Electric, former Vice Chair Beth Comstock had a window seat on the industrial group’s attempts to adapt to changes in technology and markets. She popped by Times Square to discuss GE, and how she became the company’s most senior female executive.
NAFTA survival rests on Ottawa showmanship 29 Aug 2018 Foreign Minister Chrystia Freeland is talking up how Mexico’s U.S. “concessions” help Canada. Now she needs a deal, not least on the country’s punitive dairy tariffs, that keeps both the U.S. president and her anti-Trump fellow citizens happy. That’ll require some smooth talking.
Aston Martin IPO relies on turbo-charged profit 29 Aug 2018 The British luxury sports-car maker wants to list in London. Promises of Ferrari-like profitability and rapid growth could easily justify a more than 5 bln pound valuation, but look a stretch after this year’s flat margin. Investors will want more clarity on Aston’s growth path.
Only trophy hunters would bid $3 bln for Chelsea 29 Aug 2018 That’s what Roman Abramovich wants for the barely-profitable London soccer club, the Times says. But Chelsea’s dependence on selling players and the need to rebuild its stadium makes it hard for a new owner to earn a return. Any buyer would have to put glory ahead of money.
Hadas: The missed opportunity to do Brexit right 29 Aug 2018 Planning for “no deal” should embarrass serious supporters of Britain’s departure from the European Union. An abrupt break will cut thousands of crucial ties and create chaos. The pro-Brexit crew could have learned from the EU’s history of backing high deals with dull details.
Market dominance defends China’s Didi from murder 29 Aug 2018 The $56 bln ride-hailing app is in big trouble after a driver killed a female passenger. With #MeToo gaining traction in China and an IPO in the pipe, the timing is terrible. Didi’s near-monopoly protects it from a shutdown, but tighter regulation could punish profitability.
Yum China will struggle to get a fancier takeout 29 Aug 2018 The U.S.-listed KFC operator has rejected a buyout bid worth nearly $18 bln from a group led by Hillhouse. The deal already builds in supersized prospects and a hefty debt burden. A sweetened offer, given hints of weaker spending ahead, would be demanding.
China’s bankers have one too many balls in the air 29 Aug 2018 Loan officers at mid-sized lenders are torn between conflicting goals. Banks like $110 bln China Merchants are on the hook to fund infrastructure, cut bad loans and make a profit too. First-half earnings show that's pushing them into riskier consumer credit, even as growth cools.
Opioids and trade war create toxic cocktail 28 Aug 2018 An inflow of lethal fentanyl from China helped America record nearly 72,000 fatal drug overdoses last year. A breakdown of trust over tariffs may make it harder to cooperate over this dangerous import, and fuel unhelpful arguments about whether supply or demand is to blame.
UK-Africa trade is tiny plaster for Brexit wounds 28 Aug 2018 Prime Minister Theresa May hopes deeper ties with the continent will help cushion the blow of leaving the EU. But UK trade with sub-Saharan Africa is less than 3 pct of what it exchanges with Europe. With Nigeria and South Africa in the doldrums, prospects for growth look slim.