WPP’s new boss skips honeymoon period 4 Sep 2018 Mark Read unveiled bad news on profitability and froze the dividend on his second day in the job. The $20 bln ad group will have to invest more in technology and unify its sprawling divisions while cutting debt. He may be forced to cut payouts to shareholders in the coming year.
EU banks’ dirty money cleanup means more red faces 4 Sep 2018 High-profile probes at ING and Danske Bank underscore that Europe’s money-laundering defences are not fit for purpose. EU reforms making it easier to see who benefits from suspect capital flows will help. But lenders will have fewer excuses for inaction.
TSB offers fresh reason to swerve bank boss jobs 4 Sep 2018 Paul Pester’s departure from the UK lender is unsurprising after five months of IT disasters. But he’s also the first bank chief whose exit is largely down to computer failures. Those already wary about accepting senior banking positions have another reason not to.
Shanghai’s early market win threatens oil duopoly 4 Sep 2018 In four months, China's new crude futures contract built up an impressive 7 pct share of global turnover. Currency risk is a worry, and foreign traders remain on the sidelines. Even so, with Iran’s help, Beijing is on the way to building a credible benchmark.
Pacific islands a debt domino on China’s Silk Road 4 Sep 2018 Tonga’s prime minister warned of asset seizures as his country struggles to repay $115 mln of Chinese loans. That sounds extreme, but Tonga and its neighbours will try to renegotiate terms. Beijing’s response will show how conciliatory it is willing to be with weaker borrowers.
China and Africa struggle to kick debt habit 3 Sep 2018 President Xi Jinping pledged another $60 bln to the continent while warning against the kind of binges that have led countries to default. Yet Africa shows no sign of restraint, and China’s lending remains opaque. Accusations of debt-trap diplomacy are likely to linger.
Europe’s next bank cop faces fight on many fronts 3 Sep 2018 Daniele Nouy steps down as chair of the European Central Bank’s banking watchdog this year. Her successor will have to keep cleaning up bad debts and improving money-laundering controls. The bigger challenge, though, is addressing lenders’ chronic lack of profitability.
Britain is making a mess of replacing Mark Carney 3 Sep 2018 The Bank of England boss may extend his term for a second time, keeping him at the central bank beyond June 2019. That could offer comfort to investors worried about Brexit. But it would suggest the government is struggling to find a good successor. That’s a bad signal to send.
UK peer-to-peer IPO needs to shrug off dicey label 3 Sep 2018 Funding Circle’s valuation of up to $2.1 bln seems steep compared with U.S. marketplace lenders. The UK group is growing faster and, unusually for the sector, has avoided scandals. A better question is how regulation and rising competition affect its ability to turn a profit.
Japanese chipmaker deal is hard to process 3 Sep 2018 Renesas Electronics is considering buying U.S. peer Integrated Device Technology, for a price that could be around $6 bln. Its last acquisition hasn’t obviously delivered and the implied return on investment of this one is just 5 pct. Small wonder that investors are skeptical.
Thames Water’s nationalisation barrier has a leak 3 Sep 2018 The utility is reining in dividends and spending 12 bln pounds to restore ropey infrastructure. Given a Labour government under current opposition leader Jeremy Corbyn might nationalise the sector, caution is wise. But Thames’ inability to cut bills still leaves it an outlier.
ICBC capital hike hints at more debt pain ahead 3 Sep 2018 China's largest commercial bank will raise $30 bln by 2020. Its bad loan ratio looks healthy enough on paper, but weak credit is getting rolled over. Stronger reserves will help it come clean as regulators tighten up. Its smaller rivals, though, will struggle to follow suit.
Meituan Dianping IPO demands a nemesis discount 3 Sep 2018 As China’s takeaway-to-taxis unicorn seeks up to a $55 bln valuation, former investor Alibaba is intensifying the rivalry. It began a loyalty plan to get customers spending more and brought in SoftBank to back its Ele.me delivery service. Bad blood should be priced into the deal.
JD CEO’s arrest steps on governance landmine 3 Sep 2018 Richard Liu is being investigated for sexual misconduct in the United States. Super-voting stock gives him control of the $45 bln e-commerce firm; the board can't meet without him. Even if Liu is cleared, this raises questions about JD’s use of legally-untested structures.