Foxconn stumbles in first steps away from Apple 1 Apr 2019 Weak iPhone sales dented quarterly earnings at Taiwan's $32 bln contract electronics-maker. To move up the manufacturing chain, boss Terry Gou is reviving storied brands, including Nokia. But a disastrous year at the Finnish handset unit suggests Foxconn has its work cut out.
India Insight: The new rich face a wealth trap 1 Apr 2019 Mumbaikars are hitting the tippy end of the income stratosphere, investing in fine wine and foreign residency visas. Trophy assets like a top British football club can’t be far off. With this Chinese-style trajectory, Indians will have to avoid becoming the new dumb money.
Not all Chinese bank borrowers are made equal 1 Apr 2019 Giants like the $290 bln ICBC are ramping up loans to small business at the behest of Beijing. That will check favouritism toward big state enterprises. But it ignores the perverse incentives at work within the banks and it’s a misguided way to stimulate private investment.
Lyft gives Uber a boost along the IPO road 29 Mar 2019 New investors eagerly hopped into the ride-sharing firm’s public listing, driving Lyft’s price up by some 20 pct. It bodes well for mega-rival Uber, which on a similar multiple would be worth over $150 bln. Turning fast growth into profit, though, remains a challenge for both.
Four lessons of Theresa May’s third Brexit defeat 29 Mar 2019 The prime minister’s deal for leaving the EU is almost certainly dead after parliament rejected it again. A different compromise is feasible but hard to agree. That makes a long delay, and maybe a general election, more likely. But a chaotic departure may still happen.
Vincent Bolloré eyes honourable surrender in Italy 29 Mar 2019 Vivendi, controlled by the French tycoon, is withdrawing its plan to throw five directors appointed by Elliott off the board of Telecom Italia. The move spares Bolloré a messy defeat, but still leaves him stuck with rival Paul Singer. State investor CDP could act as a peacemaker.
Review: Theranos story is both crazy and ordinary 29 Mar 2019 A new documentary depicts the blood-testing company’s founder Elizabeth Holmes as an unblinking, controlling CEO who believed she could defy science. Her $9 billion dreams ended in fraud charges. In some ways, though, it’s a painfully normal Silicon Valley story.
AstraZeneca takes precision approach to cancer M&A 29 Mar 2019 The UK drugmaker will pay up to $6.9 bln to work with Daiichi Sankyo on a breast cancer drug. It’s a low-risk way of growing in a hot area, without the pain of an acquisition. The more than $4 bln jump in the Japanese group’s market value suggests the two are better off together.
Crash report clarifies Boeing’s 737 exposure 29 Mar 2019 Officials think a suspect anti-stall system activated before last month’s airliner crash in Ethiopia, the WSJ reported. That raises the plane-maker’s legal liability. But it also makes it clearer how to fix the problem and get the bestselling jet back in the sky.
Altice share price surge sets investor trap 29 Mar 2019 The stock market value of Patrick Drahi’s European telco jumped by a quarter on rosy 2019 cash-flow forecasts. That represents only a minor tweak to the company’s total worth, though: about 90 pct of its capital structure is debt. Bad news could reverse the bounce in a flash.
Roundup crisis could snarl Bayer in activist weeds 29 Mar 2019 The chemicals maker has lost 40 bln euros in value since U.S. juries said its glyphosate herbicide causes cancer. With science on Bayer’s side, delaying any settlement makes sense. But the longer the German group’s shares remain low, the more vulnerable it looks to interlopers.
Swine fever tests China’s transparency credentials 29 Mar 2019 Grains trader Cargill is the latest company to cite outbreaks of the highly contagious hog disease as a drag on business. It’s likely to fuel fears that the world's biggest pork producer may be under-reporting the issue. The taint adds to Beijing's fast-spreading problem.
Volvo’s green car forecast flashes an amber light 29 Mar 2019 Boss Hakan Samuelsson says electric vehicles will be as lucrative as gas guzzlers by 2025. Taken at face value, that's optimistic, given Tesla, BYD and Nio struggle to break even. It's also a warning: making traditional engines ever cleaner and more efficient is driving up costs.
Wells Fargo’s fall guy finally falls 28 Mar 2019 Tim Sloan’s long history as an insider at the scandal-prone U.S. bank tainted his tenure as chief executive. Yet he dealt effectively with much of Wells Fargo’s historic mess. The worrying thing is that despite Sloan’s obvious challenges, the board isn’t ready with a successor.
Viewsroom: Who will drive off with Fiat Chrysler? 28 Mar 2019 Peugeot and Renault both seem keen to merge with the Italo-American carmaker. Either deal could improve earnings from smaller cars, but couldn’t plug all Fiat Chrysler’s gaps in Asia and new tech. Plus: Apple’s underwhelming new services. And can Huawei’s charm offensive succeed?
Jefferies is too cool over wobbly markets 28 Mar 2019 Weak trading and underwriting dogged the first Wall Street firm to report on its performance this year. Chief Executive Richard Handler is relaxed. But an inverting yield curve is more worrying, and investors in rivals from Goldman Sachs to Bank of America show signs of fear.
Guest view: Buybacks rob balance sheets of meaning 28 Mar 2019 Distributions, bad deals and accounting changes are draining net book value from many U.S. companies. Most investors aren’t bothered, even by negative shareholders’ equity. It could be storing up trouble. If it isn’t, the accounting gnomes should be rethinking their rules.
IPO wave amplifies Silicon Valley inequality 28 Mar 2019 One estimate sees 6,000 new millionaires minted from the likes of Lyft and Uber going public. It will give the overall Bay Area economy a boost but may exacerbate social problems. There’s already an affordable housing crunch, and the gap between the rich and poor is growing.
German bank union teeters on a capital knife-edge 28 Mar 2019 Deutsche Bank could in theory buy Commerzbank without breaching its 13 pct equity target. That requires the benefit of the doubt from regulators on merger costs and accounting, and assumes no changes to Deutsche’s investment bank. Raising more cash undermines the deal’s benefits.
Huawei will survive in Europe, but not thrive 28 Mar 2019 The Chinese telecom-kit maker avoided an EU-wide ban, despite U.S. pressure for one. Yet a UK security report has found serious flaws in its gear. The slapdown means higher costs for Huawei, and could put off clients who will worry about future government censure.
Cox: Betonomics would have certain punk-rock edge 28 Mar 2019 U.S. presidential hopeful Beto O’Rourke has yet to spell out his economic plan. Clues abound, however, in the ethos championed by his musical idol, the frontman of the punk rock band Fugazi. Think inclusive, ethical, consumer-friendly and small business over crony capitalism.
Swedbank CEO exit still leaves iceberg of problems 28 Mar 2019 The Swedish lender has dismissed CEO Birgitte Bonnesen shortly before its annual meeting. That was almost inevitable given allegations that the lender was involved in money laundering in the Baltics. The problem for investors is that the scandal will last longer than her tenure.
Shareholders suffer in EssilorLuxottica civil war 28 Mar 2019 Chairman and top shareholder Leonardo Del Vecchio is taking his conflict with the eyewear giant’s management to an arbitration court. The open warfare will slow merger integration at the 41 billion euro company. Investors are already counting the cost of infighting.
Chinese Daimler raid is looking far from smart 28 Mar 2019 More than a year after acquiring almost 10 percent of the German carmaker, Zhejiang Geely Chairman Li Shufu has two small joint ventures to show for it including the latest to produce compact cars locally. He is known for taking a long view but meaningful cooperation looks hard.
Lyft takes Japanese backer Rakuten on new ride 28 Mar 2019 An IPO valuing the U.S. taxi app at up to $24 bln warrants a fresh look at its biggest shareholder. Lyft will now account for about a fifth of the sprawling Rakuten’s market value. Even with a SoftBank-lite investment success, however, the scattershot approach looks shaky.
China’s 5G noise scrambles ZTE’s positive signals 28 Mar 2019 A ban on U.S. suppliers selling parts to the $16 bln telecom company dragged it into the red in 2018. Its Hong Kong shares are up 50 pct this year anyway, on the promise of 5G networks. Signs that Chinese carriers may delay a rollout, however, suggest such hopes are premature.
Cathay’s budget-airline deal may add HNA surcharge 28 Mar 2019 Buying Hong Kong Express from the ailing Chinese conglomerate for $630 mln is a sensible defensive move. One investor – maybe the target’s own chairman – has threatened to fight the sale, however. That could raise the price for Cathay, and is a warning to suitors for HNA assets.
Saudi’s $69 bln asset rejig starts banker payback 27 Mar 2019 Aramco is buying a 70 pct stake in chemical group SABIC from the kingdom’s sovereign wealth fund. The reshuffle is mostly an internal affair but the oil giant will issue bonds to pay for it. That gives banks who have spent years courting the company some return for their efforts.
Equifax and FICO give hackers a bigger target 27 Mar 2019 The U.S. credit-scoring firms are teaming up to offer banks new ways to judge borrowers’ soundness. Fresh metrics could help some get credit more easily. But a wider trove of data collected without its subjects’ consent, and Equifax’s record of breaches, suggest plenty of risk.
Multiple political bets birth $17 bln health deal 27 Mar 2019 Centene’s purchase of WellCare is a gamble on continued U.S. government support for care of the elderly just as the Trump administration is challenging Obamacare. It’s also a wager that regulators won’t stop the deal or force hefty divestitures. Scale makes that a reasonable bet.