BHP atones for past M&A sins 1 Nov 2018 The mining titan is returning all $10.4 bln from its U.S. shale sale in a dividend and buyback. A nudge from pushy investor Elliott and deal discipline led to a better use of capital than in the last cycle. Boss Andrew Mackenzie has set a higher bar for BHP’s financial balance.
China’s Mr Fix It banks have a property problem 1 Nov 2018 Beijing wants lenders to do everything. That means supporting infrastructure spending, propping up stocks and rescuing state zombies – all while cutting bad debt. It’s a tough juggling act. Now, though, there are worrying signs in property: if that ball drops, others may follow.
India’s central bank spat has a global hue 1 Nov 2018 New Delhi has ratcheted up tensions with a mooted threat to invoke a never-used power to meddle with the RBI. With the rupee sinking, it’s a terrible time to undermine the bank's independence. Donald Trump’s readiness to fault the U.S. Fed has given others cover to be bolder.
Evergrande’s bond bravado baffles bystanders 1 Nov 2018 The indebted Chinese developer issued $1.8 bln of dollar bonds at eye-watering coupons, but sold $1 bln to its chairman. With housing looking toppy, the yuan sliding, and a listing in the works, Evergrande has a lot of balls in the air. This gesture confuses more than it amuses.
Budget tests mettle of Malaysia’s mavericks 1 Nov 2018 Mahathir Mohamad's government is set to present the $300 bln economy's most significant blueprint in decades. It needs to burnish reform credentials and soothe rating agencies. Outlining a credible tax plan will be a start; a plan to reduce the state's role is the bigger prize.
DowDuPont needs its breakup more than ever 31 Oct 2018 Recession fears and a writedown have burned off a quarter of the chemical giant’s value. It’s too strong a reaction: its businesses won’t suffer equally in a downturn. Dow’s worth some $175 bln, 40 pct above its current value. Next year’s three-way split should crystallize that.
Bitcoin remains a triumph of hope over experience 31 Oct 2018 The digital money is marking its first decade with a punishing slump. Fraud and regulatory zeal have dried up issuance of rival cryptocurrencies. The underlying blockchain technology has yet to produce its first killer app. It’s a long way from Satoshi’s revolution.
Mark Zuckerberg serves platter of creepy crawlies 31 Oct 2018 The Facebook boss candidly addressed the social network’s problems - encouraging for a company with grave transparency issues. Zuckerberg still lacks answers on how to squeeze revenue from things like private messaging and video ads, but at least the bogeyman is in plain sight.
U.S. regional banks finally feel watchdog warmth 31 Oct 2018 The Federal Reserve wants to modestly loosen liquidity rules for commercial banks like U.S. Bancorp and PNC. That will leave the United States’ biggest global lenders – the likes of JPMorgan and BofA – the only ones stuck with a largely undiluted post-crisis Dodd-Frank regime.
Hadas: Wealth-power is about influence not comfort 31 Oct 2018 The unequal distribution of wealth hardly affects consumption in developed economies: millionaires don’t live much better than the middle class. But excess money does buy status, influence and political power. To break the trend, politicians need to target inherited fortunes.
GM’s share price doesn’t add up 31 Oct 2018 The carmaker won a near-$15 bln valuation for its autonomous-vehicles unit by ringfencing it and selling chunks to SoftBank and Honda. If that price is right, though, it means the rest of GM is valued as if it's ready for the scrap heap. Decent earnings suggest that’s unfair.
Orcel heads to Santander at a good and bad time 31 Oct 2018 Third-quarter numbers show Spain’s biggest bank is growing revenue, controlling costs and generating capital. That’s a good basis for deals guru Andrea Orcel to take over as CEO. The catch is that gives him limited scope to make his mark – except in a bad way.
StanChart’s Halloween cheer masks multiple ghouls 31 Oct 2018 Given a leaked internal email had already flagged slowing income and high costs, the UK bank’s third quarter was tolerable. But trade wars, risks that U.S. rate rises pose to emerging markets, and regulatory dangers hit the lender directly and could reverse slow progress.
Nomura’s U.S. business offers lessons from Lehman 31 Oct 2018 A decade on from buying them, the Japanese bank’s Europe, Middle East and Asia advisory units are industry laggards but still outshine the Americas operation Nomura built itself. That business is having a good year, but the crisis deal shows how hard it is to start from scratch.
Air France take-off will be pipped by Lufthansa 31 Oct 2018 The French carrier boosted revenue in the third quarter and is finally resolving long-running problems with unions whereas its German rival has been forced to scale back ambitions for 2019. However, the former has lower passenger targets and may take time to reach full speed.
China’s advertising giants face white space 31 Oct 2018 With a slowing economy, marketing teams will pull back on ad spend. That will hit sales growth for search titan Baidu and microblog Weibo. The squeeze, alongside Google's mooted return to China, threatens to exacerbate the tech selloff and puts fresh importance on the race to diversify.
ANZ sets flat tone for contrite Aussie banks 31 Oct 2018 The $52 bln lender has reported a 5 pct drop in full-year earnings, hit by clean-up costs. Given regulatory heat, it could have been worse. Yet bank shares remain pricey. That suggests pain ahead as a boom, fed by a rosy economy, household debt and pricing power, winds down.
Trade and pig diseases infect China’s pork giant 31 Oct 2018 WH Group, $11 bln owner of U.S.-based Smithfield, is fighting a losing battle on two fronts. Deadly swine fever is sweeping China, while tariffs hammer its American market. Quarterly earnings fell by almost a third from a year earlier. It will get worse before it gets better.
China’s oil windfall covers up hints of gas pain 31 Oct 2018 PetroChina has reported a more than fourfold rise in quarterly earnings, a bumper profit fuelled by higher crude prices. But the $210 bln state producer also took a heavy hit on gas imports this year. Those losses may widen as China cranks up a shift away from coal at all costs.
Facebook heads into an earnings pincer movement 30 Oct 2018 The $410 bln social-media giant’s slowing sales growth is likely to continue. Combatting that, and the problems caused by fake posts, means spending more. That’ll hit both top and bottom lines and may force CEO Mark Zuckerberg to take rash countermeasures, like ill-planned M&A.
Trump red-tape cost-cuts forget clean-air benefits 30 Oct 2018 The White House touts reductions in U.S. regulatory costs of $33 bln since the president took office. Yet clean air and water, in particular, bring huge social and financial benefits, including reduced rates of dementia. Saving short-term pennies will cost long-term pounds.
UK’s digital tax is a flawed scare tactic 30 Oct 2018 The specter of a 2 pct levy on revenue from in-country users of Facebook et al is partly a negotiating ploy aimed at America. Britain and others want new global rules for taxing tech firms. Yet the U.S. has little reason to acquiesce, and unilateral measures risk retaliation.
Exclusive: FedEx drops NRA deal by snail-mail 30 Oct 2018 The shipping giant is ending discounts for the U.S. gun-lobby group’s members, eight months after other firms ditched similar schemes. FedEx says it’s an economic decision, not a response to mass shootings. Even so, it suggests offending the NRA is no longer bad for business.
Mike Manley can put FCA’s war chest to good use 30 Oct 2018 The auto group’s new boss is handing shareholders 2 bln euros from a car-parts unit sale. That leaves 4 bln euros for Fiat Chrysler to invest, save or do a deal. Propping up its balance sheet would soothe investors and rating agencies, and be a firm sign of conservative intent.
Wagamama may give Frankie & Benny’s indigestion 30 Oct 2018 Restaurant Group is splashing out 559 mln pounds – near its market value – on the noodle chain. With its Frankie & Benny’s chain struggling, it could use Wagamama’s growth. But even if the UK doesn’t capsize post-Brexit, it looks hard for the buyer to make a tasty return.
GE’s new boss struggles to find the bottom line 30 Oct 2018 The ailing conglomerate missed sales and earnings estimates and notched a $23 bln loss after a massive power writedown. A 90 pct dividend cut will conserve much-needed cash and shows CEO Larry Culp is serious. Still, there’s little evidence of a turnaround in sight.
BP mends balance sheet roof while the sun shines 30 Oct 2018 The UK energy group is now financing its $10.5 billion BHP shale deal entirely from cash, instead of partly using equity. A gush of free cash flow justifies that show of strength. CEO Bob Dudley is, however, right to avoid other splurges given lofty oil prices may not persist.
BNP’s trading excuses are starting to wear thin 30 Oct 2018 France’s largest lender reported a dip in revenue as its international and fixed income dealing businesses disappointed. That is more worrying than a weak quarter in retail banking, which may be temporary. The bank will only hit a revenue target by firing on all cylinders.
Sony’s turnaround is missing an enduring plot 30 Oct 2018 The $70 bln Japanese group beat quarterly earnings expectations, thanks to videogames like Marvel's Spider-Man. But even after a two-year rally, the shares are cheap. The next challenge for new boss Kenichiro Yoshida is to prove the revival is more than one-hit wonders.
Reckitt’s best activist repellent is out of reach 30 Oct 2018 The Dettol maker faces sluggish sales and falling margins, with factory disruptions only part of the problem. Its hygiene division could be worth 22 bln pounds but spinning that off in the next year or two would incur a big tax bill. Pushy investors may want action before then.