Metal tycoons test India’s new era of governance 26 Oct 2018 The Ruia family’s $7.4 bln offer to pull Essar Steel from bankruptcy is a brazen attempt to stop ArcelorMittal's winning bid. Creditors will do better with the former owners, but it makes a mockery of a young insolvency code and undermines the fight against errant moguls.
The Exchange: Leta Hong Fincher 26 Oct 2018 China’s fledgling feminist movement has laid the foundations for a #MeToo moment. In the wake of the infamous one-child policy, author Hong Fincher has documented the development of women’s rights, and activism. She joins Katrina Hamlin to explain why their work worries Beijing.
Viewsroom: The $230 bln scam rocking Nordic banks 25 Oct 2018 Danish lender Danske has already lost its chief executive on news that one of its Estonian branches was used to launder Russian money. Now Nordea and others are facing questions. Plus: investors drive car stocks into a ditch - and Daimler's and Ford's dividends look vulnerable.
Alphabet ad machine aids Tim Cook’s data case 25 Oct 2018 The Google parent raked in more revenue and profit during the third quarter. The stronger the $730 bln firm gets, the more scrutiny it will attract from watchdogs who want to safeguard consumer data. The Apple boss’s call for tighter privacy restrictions is a telling sign.
Amazon’s ad initiative is a useful add-on item 25 Oct 2018 The $870 bln company doubled third-quarter sales mainly pertaining to advertising. As a challenger to Facebook and Google, both mired in data scandals, Jeff Bezos’ firm risks negative attention. But the extra sales help and, thanks to other revenue streams, it has less to lose.
Mediobanca is lender of choice for rare Italy bulls 25 Oct 2018 The Milan bank is proving almost immune to a domestic bond market rout and has few bad loans. Hence it can probably take market share from battered Italian peers. For those few bank investors who are Italy enthusiasts, a lowly valuation makes Mediobanca the sanest way to buy in.
In need of cool head, Brazil braces for opposite 25 Oct 2018 Far-right ex-army man Jair Bolsonaro looks set to win Sunday’s presidential runoff, riding voter anger over corruption, violence and economic stagnation. Prioritizing pension reform over strongman tactics would better address the nation’s ills. You can’t shoot fiscal deficits.
Lazard could profit from some of its own advice 25 Oct 2018 A stalling asset-management arm dampened the $5 bln advisory firm’s earnings. The recent sale of Oppenheimer, which Lazard advised, suggests its stock is undervalued. Corporate finance tricks like buybacks aren’t helping. Boss Ken Jacobs’ bankers might have a better solution.
Twitter’s bot purge looks good for business 25 Oct 2018 Monthly users fell again in the third quarter but ad revenue surged, helping the $21 bln company led by Jack Dorsey top expectations. Similar trends three months ago caused a selloff; this time, Twitter’s stock soared. Keeping this version of the meme going is Dorsey’s priority.
Hadas: Six economic reasons to hate Uber 25 Oct 2018 Economists are wrong to drool over the car service provider as an exemplar of free markets. This financial zombie has destructive effects on transit, a dysfunctional strategy and an antisocial approach to regulation. Also, it hurts its workers and makes investors look foolish.
AB InBev debt detox points to flat future 25 Oct 2018 The Bud owner halved its dividend to pay down a debt mountain from buying SABMiller. This should free up $4 bln annually, but it could take eight years to hit its leverage targets. Any more trouble in emerging markets will mean an even longer wait for clear heads.
WPP’s broken financial model is hard to fix 25 Oct 2018 The ad group’s old strategy of modest growth supplemented by M&A and share buybacks no longer works. New CEO Mark Read faces shrinking sales and a big debt pile. Given how long it will take to streamline the business and invest in new technologies, investors will be unforgiving.
Cox: Saudenfreude over Khashoggi absent from Doha 25 Oct 2018 As Mohammed bin Salman’s blockade of Qatar nears the year and a half mark, it would be easy for the tiny-but-rich Gulf state to gloat over the kingdom’s woes. But chaos across the border is a big worry. A quiet high road is paying off for Qatar. Even MbS seems to agree.
UBS stoops to conquer 25 Oct 2018 The Swiss bank is ditching a standard industry way of measuring earnings. Instead it's pegging performance to common equity Tier 1 capital, a lower number that automatically makes returns look higher. It may be simpler, but also smacks of trying to paper over a lack of growth.
New BT CEO’s task is to keep it simple 25 Oct 2018 Philip Jansen, the current boss of Worldpay, will run the 25 bln pound former phone monopoly. He lacks experience dealing with a regulator as fierce as BT’s and joins after a new strategy has been announced. His job will be limited to making as few unforced errors as possible.
Cathay Pacific typifies data-breach turbulence 25 Oct 2018 The $5 bln Hong Kong airline disclosed unauthorised access to personal details of over 9 mln passengers. It also waited seven months to come clean. Though investors should know by now that hacks can happen anywhere, they leave struggling companies like Cathay more exposed.
Moutai makes flammable fuel for China’s stimulus 26 Oct 2018 As companies bid for contracts tied to Beijing’s infrastructure surge, many may toast deals with a bottle of China’s best-known liquor. The $110 bln spirit maker offers a boozy play on government spending, but a sales surge could embarrass graft enforcers, prompting a crackdown.
China aims rare-earth bazooka at trade rivals 25 Oct 2018 Beijing is limiting output of tough-to-mine minerals like cerium and neodymium, starving foreign buyers of key ingredients used in electronics and weapons. It's a drastic escalation that will punish profit margins, and yet an overdue rush to develop new supply will come too late.
Beijing’s stock rescuers can’t leave market alone 25 Oct 2018 Officials are raising over $14 bln to stave off a market selloff. Unlike the “national team” intervention during the 2015 crash, anxious local governments are getting involved early. The issue is similar: once again officials have let China’s debt problem infect equities.
Musk charges Tesla at least one-quarter full 24 Oct 2018 The delayed Model 3 ramp-up revved up the electric-car maker’s latest sales and drove it into the black. The gains may not be sustainable, and the CEO’s behavior and potential capital needs remain worries. But after a riotously unstable quarter, any hint of normalcy is welcome.
Microsoft’s blandness is its beauty 24 Oct 2018 The software giant is checking all the right boxes. Quarterly revenue grew 19 pct and net income is healthy. The $830 bln firm is even managing to avoid data privacy issues that are dogging peers with similar market values. Credit boss Satya Nadella for keeping things staid.
Climate suit should light fire under Exxon owners 24 Oct 2018 New York is suing the $338 bln oil giant, claiming it misled investors about carbon’s environmental risks. Shareholders weren’t dupes, though. Their proxy revolt last year forced the outfit to start addressing the issue. Legal heat should prod them to demand more than baby steps.
Amazon’s HQ2 losers may end up as big winners 24 Oct 2018 The $860 bln e-commerce giant will pick its second headquarters soon. Only one city will be chosen, but Jeff Bezos’ outfit invests and hires prodigiously in many urban areas and will surely continue to do so. The winner may have to work hardest of all to justify its giveaways.
Gucci owner is unreliable beacon for luxury sector 24 Oct 2018 Kering’s upbeat view on Chinese demand sparked a rally in high-end stocks. But the group has so far been less vulnerable to economic swings than rivals thanks to its social media savvy. And the outlook for spending may be less rosy if China’s consumer confidence is any guide.
Saudi oil could help grease Turkish discretion 24 Oct 2018 Leaked details of a Saudi journalist’s death have dominated Turkish media but President Erdogan hasn’t yet directly implicated the kindgom’s crown prince. Ankara may be hoping to use its leverage to help its economy. The lira has recovered, but cheap oil would still help.
Daimler and Ford dividends have whiff of roadkill 24 Oct 2018 The duo are the car sector's worst stock market performers this year and on track to pay out a higher share of earnings than peers. They will have to dip into cash reserves to do so. Weak sales and investments in electric and autonomous vehicles make such largesse unsustainable.
AT&T has a satellite-TV reception problem 24 Oct 2018 The U.S. telecom operator splashed out nearly $50 bln for DirecTV in 2015. Since then, video profitability has eroded and efforts to get customers to take a new streaming product have stalled. The challenges may have implications for AT&T’s latest $85 bln addition, Time Warner.
Barclays rehab a tough act for Deutsche to follow 24 Oct 2018 The UK lender almost doubled its quarterly return to 9.4 pct, allowing boss Jes Staley to breathe a sigh of relief after a long period of restructuring. But Deutsche crashed to just 1.6 pct. With revenue falling faster than costs, CEO Christian Sewing has a tough battle ahead.
Private equity fibre rush is dicier than it looks 24 Oct 2018 Buyout groups and infrastructure investors, including a Goldman Sachs fund, are rushing to build superfast broadband networks. Customers’ loyalty promises healthy, stable returns. But the numbers get tricky if bigger operators like BT compete or demand for data disappoints.
Bharti Africa sets punchy tone for future IPO 24 Oct 2018 SoftBank and Temasek are part of a group injecting $1.25 bln into the indebted unit of India’s largest telecom operator. A valuation of eight times EBITDA exceeds that of rivals MTN and Vodacom. It’s a helpful endorsement of super-fast growth ahead of an expected London listing.