Congo vote has only bad outcomes for mining giants 28 Nov 2018 Joseph Kabila's chosen successor is set to win a presidential election due next month. He will remain in the wings, though. For Glencore and others, that offers little relief after a crippling 2018. Worse, it may mean competing power centres that catch miners in the crossfire.
Living wills put fresh nail in outsourcer coffin 6 Dec 2018 The UK wants the likes of Serco and Capita to show that contracts can be transferred to peers if they fail. It’s a prudent move after Carillion’s collapse, but could push up costs and make companies less aggressive when bidding for business. The state may keep more work in-house.
China’s too-big-to-fail rules go the right way 28 Nov 2018 Regulators have published new guidelines for supervising key banks, insurers and brokers. Of course, Beijing owns most big banks and failures are rare. But indicating who should be saved means others may be allowed to sink: that's a step towards liberalising a $40 trln industry.
Goldman Sachs could wind up paying twice for 1MDB 28 Nov 2018 Abu Dhabi’s sovereign fund is now suing the investment bank for its role in the Malaysian scandal. Damages being sought could exceed Goldman's average net profit of $5.4 bln. U.S. authorities may want a piece, too. The longer this drags out, the worse the financial fallout looks.
GM’s Mary Barra has only one leg to stand on 27 Nov 2018 Pulling subsidies as revenge for the $51 bln carmaker cutting U.S. staff and plants – as President Trump has threatened - would be unfair. It might not even be possible. Trouble is GM remains a poster child for government bailouts. It’s a fight its boss can’t easily win.
U.S. lenders keep M&A bankers on tenterhooks 27 Nov 2018 People’s United is the first to take advantage of new rules raising the $50 bln asset threshold for tougher regulation. But its purchase of BSB, with $3 bln of assets, barely takes it over the old line. And the modest deal value makes it at best an appetizer for Wall Street.
Crypto disruptors want a hug from Wall St 27 Nov 2018 Enthusiasts snapped up bitcoin and its digital imitators believing they would replace financial intermediaries. But an 80 pct price collapse has dampened the revolutionary fervor. Now the likes of NYSE and Fidelity can’t come soon enough with futures, ETFs and custody services.
Saudi can pick a path through its OPEC minefield 27 Nov 2018 Riyadh must somehow please oil-producing peers who want to bolster prices and a U.S. president who wants the opposite. Crude costs will rise when Donald Trump’s temporary Iranian oil waivers expire. Saudi can appease both sides by making equally temporary reductions in output.
German lighting buyout relies on benign trade view 27 Nov 2018 Bain may be looking at Osram. Its stock has been hammered, and growth prospects are good. But the company that was spun off from Siemens is exposed to trade wars. A deal would show that private equity’s risk appetite has yet to be dulled by volatile markets and economic concerns.
Hello concentration, goodbye conglomeration 27 Nov 2018 United Technologies is splitting into three while also closing a deal that creates an aerospace-parts giant. Like DowDuPont and others, activists and a need for competitive heft leave companies little choice – though tariffs and economic concerns stole $96 bln UTC’s show.
EU sends mixed signals to scale-hungry corporates 27 Nov 2018 Commissioner Margrethe Vestager may wave through a Dutch mobile merger but not the Siemens-Alstom rail deal. One decision hints at flexibility in the EU’s antitrust thinking. Still, politicians hoping to build regional champions to counter the U.S. and China will be disappointed.
Thomas Cook epitomises Brexit cliff-edge risk 27 Nov 2018 The UK travel operator gave a second profit warning in two months. Foreign bookings hit by a hot summer aren’t the issue. Rising leverage, a suspended dividend and an outlook that depends on strong consumer demand are – and will stay bad until Britain’s EU exit is clarified.
Caixabank’s new plan sets its sights suitably low 27 Nov 2018 The Spanish lender aims for a 12 pct return by 2021 if interest rates rise and a 10 pct return if they don’t. The latter is what it makes now. Having had to cut previous growth targets, boss Gonzalo Gortazar seems more worried about looking silly than boring.
Jack Ma and Xi Jinping: dubious comrades in arms 27 Nov 2018 State media outed the founder of $400 bln Alibaba as a Communist Party member. Implied support from China’s most famous capitalist helps President Xi’s efforts to meddle in tech. Recent Ma comments suggest he isn’t exactly on board. This turns up the heat on simmering tension.
Singapore offers lessons in corporate succession 27 Nov 2018 The Lion City’s ruling party has set in motion a careful handover, identifying the man who will eventually become premier. Boardrooms, against which the island gauges itself, can learn from the planning. Both, however, would benefit from more diversity to prepare for shocks.
Mary Barra belatedly supercharges GM’s strategy 26 Nov 2018 Her decision to scrap low-selling brands and thin the $53 bln carmaker’s bloated executive ranks was overdue. But cutting $6 bln of costs gives GM more fuel to weather trade wars and slowing sales – and to inject into the electric-vehicle and self-driving race Barra hopes to win.
Holding: Big tech cruising for antitrust bruising 26 Nov 2018 Facebook’s Russian-meddling fumbles and Amazon’s second-headquarters hubris are Exhibits A and B for legal reform. Derided as “hipster antitrust,” the idea that bigness alone can breed evil is true to competition law’s original aim. It’s time trustbusters became disruptors, too.
Climate fight can be America’s new New Deal 26 Nov 2018 The Trump administration snuck out a report on the impact of global warming, and downplayed its devastating findings. It’s a missed opportunity to boost U.S. innovation, economic output and jobs. And unlike the big works projects of the 1930s, private capital can play a big role.
Dan Loeb’s soup victory is best served warm 26 Nov 2018 His activist fund Third Point is getting two members on Campbell Soup’s board. It’s a bigger win than the single seat cage-rattler Nelson Peltz got at P&G. Still, Loeb has been highly critical of Campbell, and his tactics were more aggressive. He has some buttering up to do.
New global bank cop faces political stress test 26 Nov 2018 Fed Vice Chair Randal Quarles is a strong choice to lead the Financial Stability Board but the Basel-based body faces many challenges. A divided U.S. Congress is fighting about whether to be tough or soft on Wall Street. Brexit and other forces will also test cross-border unity.
Trump’s Saudi amorality can make Gulf great again 26 Nov 2018 Support for Mohammed bin Salman after the murder of Jamal Khashoggi has skewered U.S. claims to moral leadership. Yet the U.S. president now has huge leverage to force Saudi’s crown prince to reverse course on Qatar, Yemen and other blunders. He would be a fool not to use it.
Italian budget climbdown would be just a start 26 Nov 2018 The anti-austerity government may trim its 2019 budget deficit target to defuse a clash with the European Commission. That would ease financial market tensions which risked undermining any benefits of extra spending. The stimulus is still being spent in the wrong places, though.
MTN’s $8 bln Nigeria spat requires Goldilocks fix 26 Nov 2018 The African phone giant is close to ending a row with the West African nation over dividends. A face-saving deal will repair ties in its biggest market. After protesting its innocence, a reported $800 mln settlement looks excessive. But too little will keep MTN in Abuja’s sights.
Dolce & Gabbana’s Chinese outfit proves reversible 26 Nov 2018 Like many others, the Italian fashion house has cashed in on the mainland’s ambitious urbanites. A disastrously insensitive ad campaign, though, has led to social-media outrage and widespread boycotts. It’s a prime example of how fast the same savvy shoppers can unravel a brand.
Tencent Music will sound out global IPO market 26 Nov 2018 China's answer to Spotify may push on with a $2 bln New York listing in December. It’s a bad time of year to sell new equity and Tencent has already once delayed its plans. With no obvious need for funds, a subdued deal would confirm that the window for big IPOs is closing fast.
Taiwan’s poll upset can ease China tensions 26 Nov 2018 Voters battered President Tsai Ing-wen and her independence-leaning party in local elections, despite strong economic growth. The opposition is already reaching out to Beijing. That may augur a welcome period of calmer cross-strait relations, just as trade war storms strike.
How Nissan could get the upper hand with Renault 23 Nov 2018 After ousting Chairman Carlos Ghosn, the Japanese carmaker wants more say in an unequal alliance. Given the partnership’s lopsided governance, Nissan’s best bet would be to snap up shares in Renault, neutralising its controlling stake. Ghosn’s exit makes a hostile raid easier.
Brexit vote plan is more twerp than TARP 23 Nov 2018 Market panic helped the U.S. government push its 2008 bank bailout through Congress. Theresa May might hope for a similar outcome if the UK parliament rejects her deal to leave the EU. The flawed analogy misunderstands markets, and forgets that Britain’s crisis is self-inflicted.
Michelangelo deal is work of abstract art 23 Nov 2018 Chinese waste hauler Yulong Eco-Materials has decided to become an owner of paintings and gems instead. It’s paying $75 mln for the Italian master’s “Crucifixion” after it bought a $50 mln sapphire. Bringing art investing to public markets is a risky form of creative destruction.
China’s food delivery giant is missing a key dish 23 Nov 2018 Losses at newly-listed Meituan Dianping swelled in the last quarter. Boss Wang Xing’s bets at the $43 bln takeout-to-taxis app have been costly. Confusing disclosures on the core food delivery unit also now make it harder to judge how close the outfit is to delivering a profit.