Wirecard shows fintech stars share banking ills 4 Feb 2019 The payments group denied an FT report alleging false accounting. Yet shares are down 25 pct since last week. Soothing investors will mean bulking up in compliance and boosting transparency. They’re the kind of problems associated with rickety banks, not disruptors.
Software M&A makes LBO shops click on club deals 4 Feb 2019 A group led by Hellman & Friedman is paying more than 30 times EBITDA for its $11 bln buyout of Ultimate Software. Private equity is targeting the tech cloud. But such lofty valuations require big equity checks few can or want to write. That means teaming up, despite the risks.
Germany chooses familiar sin in $4 bln bank rescue 4 Feb 2019 Regional governments and other lenders are bailing out NordLB. The salvage keeps the sickly bank in public hands, but is costlier for taxpayers than other options, like hitting bondholders. The old-school bailout reinforces the case for consolidation in Germany’s banking system.
Breakdown: How to fix Venezuela 4 Feb 2019 The oil-rich Latin American country resembles a failed state. It may need $80 billion in loans and investment if embattled President Maduro departs. At 2013 pumping levels and $50 a barrel, that’s two years’ output for state oil firm PDVSA. A U.S. invasion would be a mistake.
Nissan’s real Brexit problems have not yet started 4 Feb 2019 The Japanese carmaker’s U-turn on building sports utility vehicles in northeast England owes more to falling demand for diesel engines than Britain’s impending EU exit. Still, a no-deal Brexit would make it nearly impossible for Nissan to justify current levels of UK production.
Julius Baer embarks on a more cautious era 4 Feb 2019 Newish chief Bernhard Hodler is cutting the Swiss wealth manager’s cost base after reporting weak 2018 results. It’s a shift from the expansion drive spearheaded by previous boss Boris Collardi. Shrinking margins and volatile transaction fees give Julius Baer little choice.
New-look Ryanair follows familiar flight path 4 Feb 2019 The budget airline will split into four units overseen by CEO Michael O’Leary. The changes, including a replacement for Chairman David Bonderman, look encouraging. But given that O’Leary will remain in charge and large-scale acquisitions are unlikely, they are mostly cosmetic.
Franc gives West Africa good reason to like France 4 Feb 2019 Italy’s 5-Star says Paris is fuelling unemployment and migration by backing the region’s single currency. It’s true the 74-year-old franc keeps the zone’s 150 mln people oddly close to their old master. But its longevity proves the merits of stable prices over cheaper exports.
Australian bank review has a soft bite 4 Feb 2019 After almost a year of painful testimonies which helped wipe some $40 bln off the value of the big four banks, a landmark report into financial services recommends oversight of regulators, an overhaul of mortgage broking and of fees paid for advice. It could have been worse.
India Insight: If Modi loses, graft can return 4 Feb 2019 The prime minister won power by promising good governance and good days. He has largely delivered the former by shifting the consensus on corruption. The latter is elusive. If Modi is weakened in the upcoming election, some of the gains beloved by global investors will be lost.
Japanese carmakers can find trade-war refuges 4 Feb 2019 A stronger yen docked some $390 mln from Honda's revenue last quarter, adding to other blows. It's been tough to juggle a safe-haven domestic currency and growth that comes largely from overseas. Rival Mitsubishi's stellar results, built on emerging markets, show it can be done.
China cigarette IPO offers unfiltered Beijing bet 4 Feb 2019 The overseas arm of China Tobacco will list in Hong Kong. Sales abroad are growing. But most of its revenue comes from importing leaves for its parent, a monopoly in a country where 300 million people light up. That's a lot of risky exposure to dated anti-smoking policies.
Review: The case for regulating Facebook 1 Feb 2019 Mark Zuckerberg’s social-media outfit has been caught pushing the data-privacy envelope again – by Apple. In his new book, “Zucked: Waking Up to the Facebook Catastrophe,” early adviser Roger McNamee lays out what went wrong – and how to tackle the dangers such companies present.
Exxon’s earnings beat creates its own headwinds 1 Feb 2019 The $320 bln oil giant’s Guyana discoveries are swelling, Permian production is booming, and restructuring efforts are paying off. That helped it top quarterly earnings expectations. But CEO Darren Woods’ efforts are adding to a global oil glut, which will limit future success.
Healthy U.S. job growth tells markets to cheer up 1 Feb 2019 Employers added a robust 304,000 positions last month. The jobless rate rose to 4 pct but it’s due to the government shutdown. The Fed recently reassured gloomy investors worried about global growth. But the U.S. economy is a better guide for the central bank than stock prices.
Novo Nordisk sugar rush will fade 1 Feb 2019 Strong sales of drugs to combat diabetes and obesity boosted the Danish drug company’s shares. But the rising number of users could give U.S. health providers scope to negotiate cheaper prices. The arrival of rival medicines, and expiring patents may give them leverage.
Anil Agarwal’s Vedanta antics are self-defeating 1 Feb 2019 A unit of the Indian tycoon’s mining company is buying some of his personal holding in Anglo American. Minority shareholders wiped off one-fifth of the company’s value. Given any swoop by Agarwal on Anglo may require winning minorities over, it’s an odd move.
Spanish banks’ capital journey is only beginning 1 Feb 2019 BBVA and Santander trade at relatively low valuations relative to their above-average returns. That’s partly justified by thin capital positions. The pair are boosting this margin of safety, but only slowly. Domestic economic and political risks mean they may have to do more.
Deutsche Bank reprieve is only temporary 1 Feb 2019 The German lender’s first net annual profit in four years and plans for bigger cost cuts are welcome. But revenue fell, partly because its trading business did worse than U.S. peers in the final quarter. CEO Christian Sewing needs top-line growth to deliver even mediocre returns.
India’s big budget betrays Modi’s election angst 1 Feb 2019 A decision to ease efforts to reduce the fiscal deficit will dent the government’s prudent reputation. Yet support for farmers, a new pension scheme and a higher effective tax exemption, even as revenues fall short, will give the prime minister a better shot at a second term.
PlayStation glitch lights fire under Sony CEO 1 Feb 2019 The $64 bln electronics giant missed operating profit forecasts, as video-games sales disappointed and smartphones tanked. As cash-cow businesses slow, the heat is rising for Kenichiro Yoshida to deliver growth from music and movies - and ditch the unprofitable handsets unit.