KFC is finger lickin’ in a less appetising China 1 Feb 2019 Mainland appetite for fried chicken helped Yum China turn a fourth-quarter profit and pushed same-store sales up 2 pct, beating forecasts. It's still expanding fast too. That suggests a resilient bet on Chinese consumers: even as budgets tighten, cheap eats stay on the menu.
Singapore’s Grab tempts headquarters curse 1 Feb 2019 The ride-hailing app plans to occupy a newly designed $135 mln building, under an 11-year lease. From Myspace to Yahoo, lavish moves have been a bad omen. Grab has cash, but is young, unprofitable and in a fierce rivalry with Go-Jek. Tech optimism may have gone too far again.
Amazon and Walmart get caught in India’s web 1 Feb 2019 The U.S. titans will be limited to operating marketplaces and prevented from being online retailers under New Delhi’s rules. That opens the door for billionaire Mukesh Ambani to power ahead with his own e-commerce plans. The miscalculation by Amazon and Walmart could be costly.
Amazon’s aggression has sustainable fuel supply 31 Jan 2019 The e-commerce giant’s holiday quarter sparkled with revenue growing 20 pct. Web services and advertising are two of the biggest sources of this expansion. They’re also the most profitable and have plenty of juice left in the tank to power Jeff Bezos’s already lofty ambitions.
Viewsroom: Why did PG&E file for bankruptcy? 31 Jan 2019 The California utility may face up to $30 bln in wildfire costs. But shareholders see value and lenders were willing to stump up cash. The board’s desire to cut other expenses may have driven the decision. Plus: How U.S. charges against Huawei may affect the telco industry.
M&A conflict case is advert for independent advice 31 Jan 2019 United Natural Foods is suing Goldman Sachs, saying the firm put its own interests first when it advised on and financed an acquisition. Goldman disagrees. Whatever the reality, having one adviser in multiple roles may be efficient, but it carries some risk of bad blood later.
Trump’s trade pounce is a gift to China 31 Jan 2019 The U.S. president says it’s his and Xi Jinping’s job to strike a tariff deal. Asserting the importance of his personal involvement reflects his desire for a pact and may mean Beijing won’t have to make big concessions. It puts hardline White House negotiators in a tough spot.
Private equity may not be good enough for Elliott 31 Jan 2019 Bulking up in buyouts is logical for Paul Singer’s hedge fund, which is better known as an activist. Yet market turmoil has hit established players like Blackstone and Apollo, and the industry is awash in capital. Coming late and small to the game is no formula for success.
Ferrari boss’s new positivity has a downside 31 Jan 2019 Louis Camilleri sent the carmaker’s shares up 12 percent by pledging to hit a 2020 target in 2019. Investors spooked by his cautious driving when he took over last summer will be cheered. But the more the outlook chops and changes, the more investors will discount its durability.
Tesla CFO exit news is flashback to bad old days 31 Jan 2019 The electric-car maker’s new board chair and directors may be helping to tone down CEO Elon Musk’s overwrought promises and tweets. But his decision to wait until the end of an earnings call to disclose that Tesla’s finance chief is leaving shows Musk remains firmly at the wheel.
UK plastics challenge could crumple 31 Jan 2019 Berry Global may trump former owner Apollo’s 3.3 billion pound offer for British packaging firm RPC. But a bid would stretch the U.S. group’s balance sheet while finding cost savings won’t be easy. RPC investors hoping for a bidding war may be disappointed.
Metro Bank shoots itself in the other foot 31 Jan 2019 The UK challenger lender has admitted that regulators, not the group itself, found recently revealed accounting fudges. What was dubbed as an oversight now looks even worse. That’s a lamentable look for a bank that may well need to raise capital later this year.
GE’s return to the black is a baby first step 31 Jan 2019 A profit in Larry Culp’s first quarter as CEO can’t hide his challenge. The $80 bln conglomerate’s troubled power unit dented sales and hammered earnings in its trio of core businesses, and disposals have yet to meaningfully cut leverage. He needs to put more imagination to work.
Italy recession is oddly helpful for EU fiscal row 31 Jan 2019 The economy contracted for the second quarter in a row at the end of 2018. Rome is increasingly likely to miss a budget deficit goal of 2 pct of GDP but will get away with it. Imposing austerity during a broad-based euro zone slowdown makes no economic or political sense.
Falling prices only hurt Shell in the long term 31 Jan 2019 Despite a crude downturn in the final quarter, the UK oil major hiked output and earnings. Given prices should stay high enough for free cash flow to cover dividends, that’s sustainable. The main cloud is Shell and peers have less to invest to wean themselves off fossil fuels.
Nokia valuation lacks Huawei boost 31 Jan 2019 Like Sweden’s Ericsson, the Finnish telecom-kit maker will gain if the Chinese rival is shut out of more markets. Yet Nokia’s valuation is lower than for much of last year and CEO Rajeev Suri expects a so-so 2019. A European ban on Huawei would change that.
New Unilever CEO tripped by emerging market glitch 31 Jan 2019 The Anglo-Dutch consumer giant reported disappointing sales growth in the final quarter. Higher inflation in Argentina caught the company off guard. New boss Alan Jope is having to rely on smart pricing and growth in Asia to help him meet the financial targets he inherited.
Nintendo brushes up gaming skills for 2019 31 Jan 2019 The $36 bln Japanese video-games giant smashed quarterly earnings expectations thanks to new titles. Even after cutting its Switch console sales target, the maker of Super Mario hits looks on track to challenge rival Sony’s PS4. Nintendo’s beaten-down shares are due a boost.
Nomura’s messy quarter begs for faster tidy-up 31 Jan 2019 An estimated $120 mln fee from SoftBank bolstered the broker’s earnings but failed to offset abysmal performance across wholesale, retail and asset management divisions. Job cuts and improved incentives are steps in the right direction, but thin padding against tough markets.
India Inc comes of age with ICICI bonus clawback 31 Jan 2019 Long-time boss Chanda Kochhar will have a big slug of her pay revoked after a probe into improper loans. Such penalties have been all too rare in the industry globally. For India it is a striking example of how financiers, and tycoons, are finally being held to a decent standard.
Foxconn’s U.S. debacle offers an economics lesson 31 Jan 2019 The iPhone maker and Wisconsin taxpayers made a $10 bln bet on a manufacturing revival in the United States. Now Terry Gou's outfit says making flat screens there is uncompetitive, and jobs will be in research and design. It's a reality check for Donald Trump's industrial dream.
Sinochem’s backtrack sends a fresh IPO warning 31 Jan 2019 The Chinese chemicals and oil giant has paused plans to float its refining and trading unit in Hong Kong. Beijing’s behemoths once listed regardless of market conditions, thanks to government-backed peers. The $2 bln U-turn should worry hopefuls without state support.
Tesla’s 2019 becoming a matter of flourish or fold 30 Jan 2019 CEO Elon Musk presided over a second profitable quarter. But U.S. Model 3 demand may be tapering off, competition and customer gripes abound, and there’s little cash for investment. Musk needs electrifying sales in Europe and China to prove the $53 bln Tesla’s staying power.
Microsoft floats above tech downdraft 30 Jan 2019 The software giant, at some $820 bln vying to be the most valuable company, racked up another quarter of strong growth and profit as more business moved to the cloud. The shift has years to go and could accelerate in a recession. Microsoft’s lesser regulatory worries are a bonus.
U.S. oil boom good for everything but profit 30 Jan 2019 Slowing growth and rising American production have knocked nearly 30 pct off Brent crude prices since October. Companies like Chevron and Exxon have responded by ramping up investment in the Permian, but that’s merely aggravating the glut – and making earnings growth elusive.
Fed patiently tells market it will be patient 30 Jan 2019 Stocks rose on the U.S. central bank’s comments reiterating that interest-rate moves depend on economic conditions. Ditto for the pace of shrinking its balance sheet. That’s nothing new, yet overly sensitive investors needed the reminder. For now the Fed is holding their hands.
Broken U.S. budget process can be fixed 30 Jan 2019 With President Trump still demanding a border wall, the government could shut down again within weeks. It doesn’t have to be this way. A multi-year budget and automatic stopgaps would curb dysfunction. And putting congressional and White House pay at risk would provide insurance.
Hadas: An ultra-tax on the ultra-rich makes sense 30 Jan 2019 Some U.S. politicians want to extract much more money from the topmost sliver of the population. This would amount to collecting an underpaid social debt and restoring a tarnished social contract, without much economic risk. And higher taxes now might prevent a revolution later.
Alibaba powers on with small things 30 Jan 2019 Quarterly sales grew 41 pct, the weakest pace in three years. But there’s still momentum in Jack Ma’s retail juggernaut. China’s wider slowdown has been marked by tepid demand for big-ticket items like iPhones. Everyday purchases like groceries and apparel are propelling Alibaba.
Atos payments spinoff flags parent’s bugs 30 Jan 2019 CEO Thierry Breton is handing shareholders a 2 bln euro chunk of the IT group’s stake in listed payments unit Worldline. Ideally, he’d give them the lot. Investors are left holding a subscale computing business with dicey U.S. prospects. Its lowly valuation is warranted.