The Exchange: Sheila Bair 28 Sep 2018 The chair of U.S. bank regulator FDIC in 2008 recalls how competition and disagreements between watchdogs contributed to the crash. A decade later, despite leaving the industry, she still feels an obligation to warn of the dangers of rolling back some post-crisis reforms.
Perella Weinberg IPO path already well trodden 28 Sep 2018 The M&A advisory boutique may be the next to list its shares. It has some differentiating factors, including a strong energy business. But boutiques come with lumpy revenue and people risk. Founder Joe Perella’s own journey shows how big a challenge the latter can be.
Data is new beat for transatlantic antitrust cops 28 Sep 2018 The U.S. DOJ’s Makan Delrahim and the EU’s Margrethe Vestager worry concentrations of personal information may be used to stifle competition. She has been the tougher so far, but the shared focus could hurt tech giants like Facebook and Alphabet that depend on data for profit.
Review: Shale oil exposé misses bigger picture 28 Sep 2018 In “Saudi America” Bethany McLean tackles the U.S. fracking industry. The author who spotted fraud at Enron accurately depicts aggressive wildcatters digging themselves to their demise. But factors that are pushing up global oil prices may yet save the industry from itself.
Weather troubles are portent for lower RSA payouts 28 Sep 2018 The UK insurer’s shares fell 10 pct after it warned of bulky claims from freezing and scorching temperatures. Another spell of bad weather could make things worse. Investors who'd been expecting a special dividend are braced for disappointment.
Breakdown: Pouring liquidity onto India’s fires 28 Sep 2018 Loans from shadow banks have grown far faster than at traditional lenders. Strains are now showing, amid rising interest rates, a weak rupee and $150 bln of bad bank debt. Multiple flare-ups will call the RBI to duty again, including to douse the financial system with more money.
Buyout pass-the-parcel hands BC Partners a present 28 Sep 2018 The investment group is buying a stake in a $3 bln European cable company from KKR. It’s a good deal, thanks to the seller’s desire to cash out. Private equity funds’ limited investment terms mean managers can’t always choose when to sell. Longer-life funds are one solution.
Swiss packaging IPO defies anti-waste threat 28 Sep 2018 SIG Combibloc is unwrapping a $3.7 bln Swiss listing. Record sector valuations have helped owner Onex more than double its money in almost four years. Growing demand and green credentials should allow the Tetrapak rival to deflect concerns about a crackdown on throwaway plastic.
Fastjet turbulence flags African continental drift 28 Sep 2018 The airline set up by easyJet founder Stelios Haji-Ioannou needs equity after Tanzanian intransigence. A bet on Africa’s growing middle class, it underplayed local resistance. Hostility to foreign capital means less investment, fewer cross-border firms and lower growth.
Fed helps Hong Kong homebuyers at owners’ expense 28 Sep 2018 Banks are hiking their benchmark rates for the first time in 12 years. As tighter U.S. monetary policy feeds into Hong Kong mortgages, flat prices look set to fall, relieving young buyers. But cooling the world’s bubbliest property market could tax economic activity.
China is feeling the aftershocks of 2008, again 28 Sep 2018 Wall Street’s implosion taught Beijing to rue reliance on a rival. Yet officials, gloating over U.S. failures, neglected reform. Despite a decade trying to wean itself from American consumers, cash and currency, complacency has left China exposed to bad policies in Washington.
Italy throws down debt gauntlet to EU and markets 27 Sep 2018 Rome is casting aside fiscal restraint by setting a deficit target of 2.4 pct of GDP through 2021. Such laxity risks swelling the euro area’s second-worst national debt. Political realities may restrain the EU Commission from holding the line. But investors may not be so kind.
Musk suit could uncover Tesla’s true value 27 Sep 2018 The U.S. securities regulator wants Elon Musk removed as CEO and director, saying he lied about a plan to take the $53 bln electric-car maker private. His exit would leave Tesla much depleted, but also more rationally valued – if it can motor past a looming liquidity crunch.
Silicon Valley puts tech gloss on house flipping 27 Sep 2018 Opendoor thinks algorithms are a better way to buy and sell homes. SoftBank’s $400 mln investment in the company suggests it agrees. Opendoor and its peers can speed up and streamline an inefficient process. They can’t wish away balance-sheet risk if the housing market slows.
M&A cash shells need more than star power 27 Sep 2018 Media mogul Haim Saban’s blank-check company found something to buy just a week before it would have had to hand back its cash to investors. The deal looks quite creative. The bigger test for so-called SPACs is how they perform long term. Their track record is spotty.
Thyssenkrupp gets half a breakup 27 Sep 2018 The German conglomerate’s shares surged on plans to split the company in two. Thyssenkrupp’s businesses are probably worth more apart than together. But the separation will take time, and one of the units will still have a stake in the other.
U.S. for once hits right note with Petrobras fine 27 Sep 2018 America’s foreign corruption laws often spark outrage about overreach. But penalizing the Brazilian state energy group $850 mln is a judicious result. It shows companies with ADSs will be held to account. And it mainly rewards Brazil’s authorities, which get 80 pct of the money.
The Exchange: Europe’s tech-slayer in chief 27 Sep 2018 Margrethe Vestager has taken on Apple, Facebook and Google as Europe’s antitrust commissioner, leaving behind huge fines and bruised feelings. She talks with John Foley about Silicon Valley’s missteps, Europe’s challenges and what she’s buying on Amazon – her latest target.
Hulu is next front in Disney-Comcast battle 27 Sep 2018 Disney made the best call of the Fox-Comcast-Sky saga by consenting to Fox selling its Sky stake at Comcast’s eye-popping price. It plans to invest some of the $15 bln proceeds in Hulu. Comcast, which owns 30 pct of the online-video JV, would be wise to follow suit and let it go.
Donald Trump sets WTO up for failure 27 Sep 2018 The system for resolving commerce disputes may grind to a halt after the United States blocked the reappointment of an appeal judge at the global trade body. The president’s disdain for the organisation is no secret, but the move undermines its value to other countries, too.
Bolloré’s exit leaves Mediobanca exposed 27 Sep 2018 The French financier is ditching a shareholder pact that has long pulled the strings at Italy’s most influential investment bank. CEO Alberto Nagel, who has turned the bank around, gets a freer hand. But if the pact is not renewed, Mediobanca could more easily become a target.
Chinese investment bank sells itself poorly in IPO 27 Sep 2018 China Renaissance fell 20 pct on its Hong Kong trading debut, valuing the tech advisor at less than half its original $5 bln target. A shaky outlook is partly to blame, but Renaissance also overpriced itself. For an investment bank, such a fumble is hard to explain to clients.
Wembley bid is open goal for Britain’s soccer body 27 Sep 2018 Jacksonville Jaguars owner Shahid Khan has offered a staggering 600 mln pounds for the UK’s national stadium. Given that the Pakistani-American is leaving behind the lucrative hospitality arm and naming rights, the Football Association should put the deal in the back of the net.
H&M gets too much credit for a patchy new look 27 Sep 2018 A glitchy supply chain sent the 23 billion euro fast-fashion retailer’s pre-tax profit down a fifth in the third quarter. Strong online demand was a rare bright spot. Investors who bid up the stock 10 percent ignore high levels of unsold stock and sales growth well below targets.
BBVA handover is slow waltz to Santander’s tango 27 Sep 2018 The Spanish bank has said CEO Carlos Torres will succeed Francisco Gonzalez as executive chairman. The orderly transition stands in contrast to Santander’s flashy punt on UBS investment banker Andrea Orcel. A crisis in Turkey will put his relevant experience to the test.
TomTom is risky option on carmakers beating Google 27 Sep 2018 The $2 bln navigation group may sell a sideline business a week after key customer Renault said it would use Google Maps. After the sale, TomTom would look cheap – unless the search giant wipes the floor with rival mapmakers. The U.S. group’s track record makes that a dicey bet.
Indonesia could grease economic wheels with oil 27 Sep 2018 Rising Brent prices and a falling rupiah have left the country choking on fuel costs. It was once an OPEC member and net exporter, but now imports almost $1 bln of crude monthly. Even with a fresh interest rate hike, Jakarta can take fiscal steps to ease its energy pain.
Climate change stress tests omit the stress 27 Sep 2018 More companies are releasing guidance on how their balance sheets might cope with a decarbonised world. Unfortunately, disclosures are thin on detail and political apathy gives boards cover to do little. Time to turn voluntary exercises into more exacting and mandatory reviews.
Japan bends without breaking on U.S. trade 27 Sep 2018 After resisting for months, Prime Minister Shinzo Abe finally agreed to bilateral talks with Donald Trump. He had little choice given how vulnerable Toyota and other carmakers are to U.S. tariffs. Sticking with TPP, however, has given Japan leverage in areas such as agriculture.
China’s tariff cuts are silver lining of trade war 27 Sep 2018 Import taxes on many industrial goods are coming down, expanding earlier reductions and lowering the overall rate to 7.5 pct from 9.8 pct. That may blunt charges of protectionism abroad and help companies at home. Expected savings also should result in a stronger Chinese economy.