Driving hard bargain could backfire on Hyundai 27 Feb 2019 The Korean conglomerate's auto-parts unit has offered less than half the $2.2 bln dividend wanted by pushy Elliott. Meanwhile, Hyundai's carmaker rejected another of the activist's proposals. Stingier options may cost it investor support when it comes to a broader restructuring.
Macau’s festive blowout defies economic worries 27 Feb 2019 The $38 bln Chinese gambling hub looks resilient despite concerns about slowing consumption onshore. Visits rose by 27 pct over the Lunar New Year holiday; quarterly results at Melco and MGM also inspire optimism. Efforts to attract the up-and-coming middle class are paying off.
Musk might just talk himself into a Tesla buyout 26 Feb 2019 The electric-car maker’s CEO and the SEC are in battle again over a recent tweet. At worst, the watchdog could force him out. But what then? Tesla’s stock would tumble, putting the firm in play – and potentially letting Musk revive the takeover idea that first got him in trouble.
Jamie Dimon finally has nothing to complain about 26 Feb 2019 The $350 bln bank he runs boasts a premium valuation, claims half U.S. households as customers, and handles $1 of every $10 of global equity trading revenue. Even post-crisis regulation is no longer a headwind. JPMorgan’s rivals can only try to close the gap.
Fund managers face a never-ending war on fees 26 Feb 2019 Vanguard is slashing costs on dozens of mutual and exchange-traded funds just months after Fidelity launched zero-fee products. JPMorgan lowered the returns it targets for its asset-management arm. Yet the business remains lucrative - which ensures cuts will continue.
Now AT&T has to make its business case 26 Feb 2019 The U.S. telco won its legal battle, with an appeals court upholding the legality of the firm’s $85 bln acquisition of Time Warner. Clearing that hurdle is a relief for boss Randall Stephenson. Next up is persuading investors the deal and the huge related debt load make sense.
Ocado will do better than M&S out of a tie-up 26 Feb 2019 The online specialist may sell a 50 pct stake in its retail division to Marks and Spencer for up to 900 mln pounds. That can fund investment in its fast-growing tech unit. The buyer will pay a hefty price for a delivery service that might struggle to hang onto current customers.
Breakdown: End of Moore’s law reshapes chip market 26 Feb 2019 For decades, raw computing power increased and became cheaper at a heady pace. The death of the trend means chip producers seeking an edge must specialize or find more difficult advances. One result will be a more fragmented industry. Intel and others have their work cut out.
Arrests give investors new reason to avoid Russia 26 Feb 2019 Sanctions imposed on some well-connected oligarchs have already spooked foreign money managers. The detention of Baring Vostok executives including founder Michael Calvey highlights domestic dangers. Less capital will be willing to navigate the risks.
Cruising Peugeot risks running out of gas 26 Feb 2019 The French group’s shares are the best-performing of European carmakers in the past year, helped by CEO Carlos Tavares’ swift turnaround of Opel-Vauxhall. Yet his new targets are modest, and a push into the tough U.S. market could flop. Peugeot’s premium valuation may not last.
Payments IPO can shrug off sluggish Italy 26 Feb 2019 Domestic market leader Nexi is seeking a listing that may value it at some 7 billion euros including debt. Cash-loving Italians have traditionally shunned bank cards and digital transactions, but that’s changing. Closing the gap promises decent growth, even in a slowing economy.
African retailers get sobering reality check 26 Feb 2019 Shoprite, the continent’s biggest supermarket chain, suffered its first half-year earnings drop in a decade. The big hit was from inflation and devaluation in frontier markets like Angola. Chasing Africa’s billion-plus consumers is one thing; doing so profitably is another.
StanChart makeover gets scarcely halfway there 26 Feb 2019 The Asia-focused bank kept expenses under control and curbed bad debts, but socking away $900 mln for fines restrained profit growth. CEO Bill Winters promises more cuts and to double return on equity to 10 pct by 2021. Even then, StanChart would seriously lag Singapore peer DBS.
Tesla board should brace for Elon Musk impact 26 Feb 2019 The electric-car maker's CEO mocked the SEC after it asked a court to hold him in contempt for a production targets tweet. His flouting of rules and accuracy has become a serious liability. It’s time for directors to plan an emergency route in case Musk's power completely drains.
Chinese shares deserve more room to run 26 Feb 2019 Cooling trade tensions helped push the 2019 rally in the benchmark mainland index to 24 pct. Easier credit and support from President Xi Jinping have been even bigger factors. Regulators are starting to worry as leverage grows. A clampdown, however, would do more harm than good.
Nintendo plays winning Japanese buyback game 26 Feb 2019 The Super Mario maker is repurchasing $300 mln of stock and cancelling hoarded shares as owners like Bank of Kyoto adapt to new cross-holding rules. Buybacks can be a poor use of cash, but with Japan Inc holding $4 trln in reserve Nintendo is joining a worthwhile movement.
Tech layoffs threaten middle-class China dream 26 Feb 2019 Reports of job cuts in the once-booming sector are on the rise. Officials touted jobs at startups as substitutes for slack hiring at state giants and traditional industries. But if 8 mln college students graduate into an innovation economy that isn’t hiring, unrest could result.
BofA culls the herd on the street 25 Feb 2019 The $284 bln lender is eliminating the Merrill Lynch name from its investment bank and shortening it at its brokerage. Ditching an acquired firm’s brand can be a tough call. But after a decade, CEO Brian Moynihan can easily judge where it has value – and where it doesn’t.
3G’s special sauce runs out of financial flavor 25 Feb 2019 The Brazilian investment firm’s private equity-style penchant for buying companies, larding on debt and slashing costs can work to a point. But without good strategy, management and a plan for an exit, it can cause problems like those now besetting Kraft Heinz.
Investment banks have a problem with volatility 25 Feb 2019 For years bankers complained markets were too calm. But when stocks and bonds tumbled in the fourth quarter, most trading units suffered. Nervous investors and companies are partly to blame, as are models that push up capital demands. It doesn’t bode well if markets stay choppy.
GE-Danaher pharma deal is a win-win remedy 25 Feb 2019 CEO Larry Culp is unloading the conglomerate’s biologics unit to his old employer for $21 bln. It’s his boldest downsizing move yet and will help cut leverage. Danaher gains scale in its health business at a reasonable price while Culp needed a sale, not necessarily top dollar.
Hostile gold merger has only glimmer of appeal 25 Feb 2019 Barrick Gold's $18 bln all-share bid for U.S. rival Newmont has a shred of financial logic from putting together neighbouring mines in Nevada. That's buried, though, beneath opportunism and hubris. The slim uplift for Newmont shareholders further dulls the deal's prospects.
Walmart UK buyout would stretch even KKR 25 Feb 2019 The private equity group might bid for the U.S. giant’s Asda unit if a 7.3 bln pound sale to rival Sainsbury’s is blocked. To get a decent return, KKR would have to crank up sales and margins – and write a big equity cheque. It’s not impossible but UK retail woes make it unlikely.
Roche pays late entry fee to gene therapy party 25 Feb 2019 The Swiss group is buying Spark Therapeutics, which develops treatments that tinker with patients’ DNA, for $4.3 bln. The deal gives Roche a leg up in a hot sector. But it comes with a fat premium, risk and fierce competition. The rewards may take years to come through.
Delaying tactics could bring Brexit to a head 25 Feb 2019 Theresa May has shunted a vote on her plan to leave the European Union to mid-March. Meanwhile, parliamentarians want to postpone the departure date if no deal is agreed. Threats of procrastination don’t alter Britain’s hard choices, but may help rule out the worst Brexit option.
U.S. stocks daze Trump into folding on China 25 Feb 2019 The president says he will delay a tariff hike on $200 bln of Chinese goods. Tweets imply he will ease up on Huawei too. Wall Street wobbles have pushed the White House toward a quick-and-dirty deal which empowers Beijing hardliners, and benefits neither side in the long run.
Uber’s Indian takeout will feed future rivals 25 Feb 2019 The ride-hailing giant may swap its local food delivery business for a stake in $3.3 bln rival Swiggy. Checking out of Uber Eats's fastest-growing market will cut losses ahead of a global IPO. It would also prioritise short-term gain over efforts to keep new competitors at bay.
China makes banks take a practice perp walk 25 Feb 2019 Officials want lenders to use perpetual bonds to boost capital buffers. Generating buyer interest is tough, so Beijing put a thumb on the scales to help sell the first $6 bln issue. State-incubated markets can work in China, but the trick is taking the training wheels off.
Kraft Heinz fail leaves Buffett and 3G well fed 22 Feb 2019 Even after the Velveeta maker’s shares lost more than a quarter of their value, the investors who built it from their 2013 Heinz acquisition have made almost a 50 percent profit. No such luck for Kraft’s original investors. Over three years, they have barely broken even.
Review: Old news guard beats back the grim reaper 22 Feb 2019 Google and Facebook have nearly destroyed the media business – venerable institutions and digital upstarts alike. In “Merchants of Truth,” Jill Abramson effectively draws upon BuzzFeed, Vice, the Washington Post and the New York Times to show that subscribers are key to survival.