China’s best-case trade deal looks worse and worse 1 Aug 2019 Negotiators have wrapped up another round of talks in Shanghai without result. A ceasefire was brokered in June but Trump no longer seems enthused about a quick compromise that might expose him to criticism. Unfortunately, a lacklustre economy means time is not on Beijing's side.
Banking tests Jack Ma’s lemons-to-lemonade skills 1 Aug 2019 China makes life deliberately hard for online lenders like MYbank, backed by Alibaba's founder. The bank is now raising capital, but what it really needs are elusive deposits. Still, MYbank is growing and profitable, and Ma has experience at being the financial underdog.
Carlyle a late but welcome arrival at C-Corp party 31 Jul 2019 The U.S. buyout firm is finally joining rivals in ditching its partnership for a corporate structure. Better yet, it’s giving shareholders voting rights, unlike its peers. Insiders retain control, but it’s a governance improvement that widens the potential market for its shares.
Jerome Powell finds another way to please nobody 31 Jul 2019 The Fed chief presided over a quarter-point interest-rate cut on Wednesday, disappointing investors, presumably the president, and even some colleagues. Most people have enough worries, real or not, to want lower borrowing costs. Most economic statistics, though, say not yet.
Hadas: Gratuities reach an economic tipping point 31 Jul 2019 Customers like to reward good service. But food delivery service DoorDash’s now-abandoned policy of pocketing tips shows how generosity has become subservient to optimising profit. Fairer wages and clearer prices might work better.
U.S. strength gives Fiat Chrysler an M&A breather 31 Jul 2019 The $21 billion Jeep maker is braving the car market downturn better than rivals. Record results in the key North American market produced better-than-expected operating profit. That gives boss Mike Manley headroom to cut costs while keeping an eye out for potential partners.
GE turnaround is barely past stalling speed 31 Jul 2019 CEO Larry Culp upped the $92 bln conglomerate’s earnings outlook a tad. But costs are up, revenue down, the power business looks drained and the grounding of Boeing’s 737 MAX could deplete cash by $1.4 bln this year. What progress there is doesn’t add up to a convincing recovery.
Old Mutual row shows merit of the quiet CEO payoff 31 Jul 2019 The South African insurer’s shares lost 5% after sacked boss Peter Moyo convinced a court he should get his job back, at least temporarily. A public slanging match looks damaging for all concerned. There’s a reason why warring boards and bosses usually settle disputes quietly.
European trader laggards’ energy boost has legs 31 Jul 2019 Higher investment banking results drove year-on-year rises in Credit Suisse and BNP Paribas’s quarterly earnings. Euro-denominated debt issuance hikes and the scope to pick up business from ailing Deutsche Bank are tailwinds. They could help erode the banks’ valuation discounts.
Prada’s independence hinges on green millennials 31 Jul 2019 As creative guru Miuccia turns 70, the fashion brand’s stock sits 35% below its IPO price. To return there Prada needs Gucci’s sales growth and LVMH’s margins. Unless neophyte 31-year-old son Lorenzo’s renewables push enthuses his peers, it may not stay independent.
Lloyds’ PPI tragicomedy has suitably shambolic end 31 Jul 2019 The UK bank set aside way more than expected for missold insurance compensation. Since 2011, Lloyds has consistently underestimated how much these payouts will be, and how long they will last. The claims will finally stop next month, but the hit to its credibility will linger.
EssilorLuxottica M&A invites sharp antitrust lens 31 Jul 2019 The $58 billion eyewear giant’s merger was waived through last year by regulators. But its purchase of Dutch optical retailer GrandVision risks curbing competition. It could promise to permit opticians to offer rivals’ products or sell some shops to a peer to help allay concerns.
Nomura feels the happy effect of a low base 31 Jul 2019 The ailing Japanese brokerage turned in a strong performance in its markets division, which is in the middle of a restructuring. What’s encouraging is that it happened as big U.S. rivals said business was limp. Boss Koji Nagai’s efforts to turn Nomura around may be bearing fruit.
Japan’s banks could use a dose of kind cruelty 31 Jul 2019 As companies slow investment and the central bank talks looser monetary policy, lenders like $62 bln Mitsubishi UFJ look poorly positioned to defend Japan against a slowdown. Tokyo may have to hurry through harsh medicine, including sector consolidation and even taxing deposits.
Japan dims hopes of a Samsung memory chip rebound 31 Jul 2019 Shares of the $260 bln tech giant slid after the company warned of poor visibility into the impact of Tokyo's export curbs. South Korea’s escalating dispute with its neighbour threatens supply chains. It now throws into doubt Samsung's confidence that chip prices will recover.
China’s next debt jitters will be among households 31 Jul 2019 Worries over bad loans are concentrated in the corporate sector but families are taking on borrowings at about twice the rate of overall economic growth. The relentless increase is unsustainable. As other engines sputter, consumers may not be a reliable fallback for Beijing.
Aussie monetary future is everyone else’s past 31 Jul 2019 Australia managed to avoid the ultra-low rates other countries have shouldered for years. Now growth is slowing, and it is up against the limits of conventional policy. An improvement in second-quarter inflation and a cheerier end to 2019 won't change the need for new tools.
Tim Cook plays tortoise to Satya Nadella’s hare 30 Jul 2019 The Apple CEO badly needs a new hit product amid slowing iPhone sales as services can’t offset the drag. Microsoft has risen past $1 trln in value on the strength of Office and a fast-growing cloud business. Apple is losing pace just as the Seattle giant is getting a second wind.
Undoing Trump’s tax cuts harder than it looks 30 Jul 2019 Democratic presidential contenders want to scrap the White House’s signature legislative win. The measure helped companies and the wealthy but also provided some breaks for the middle class, making it tricky to roll back. And a corporate tax hike could trigger a market downturn.
ConocoPhillips exemplifies oil’s cloudy future 30 Jul 2019 The $66 bln U.S. driller posted decent returns last quarter despite lower crude prices. It upped its buyback target and talks a better game than some on climate risk. But the poor showing of shares across the sector suggests investors don’t love either short- or long-term plans.
Brexit pulls Ireland out of ECB force field 30 Jul 2019 Yields on Irish bonds have been rising even as they fall across the euro zone. Fear of a chaotic UK exit from the EU outweighs hope of European Central Bank easing. Dublin lacks its own currency or control of monetary policy. Public spending will have to cushion any shocks.
Capital One provides one more reason for data laws 30 Jul 2019 A hack at the $46 bln credit-card firm exposed more than 100 mln customers’ information. Puny U.S. deals, like Equifax’s $700 mln or Facebook’s $5 bln, aren’t enough to produce tighter protocols elsewhere. Legislation protecting data is a surer way to get companies’ attention.
Cox: A mall and gold mine are key to Greek revival 30 Jul 2019 Prime Minister Kyriakos Mitsotakis sees growth as a panacea for the Hellenic Republic’s ills. His new government is unblocking long-stalled projects to generate jobs and attract foreign direct investment. Never has a shopping centre been so important to the cradle of democracy.
Siemens Gamesa buffeted by renewables tailwind 30 Jul 2019 The 10 billion euro Spanish wind-farm builder’s shares sank 17% as competitive pressures hit prices. Wobbles are likely as governments phase out subsidies. But with the costs of wind power now sinking below rival sources, the sector in general is in breezier shape.
China can toss Huawei a lifeline with a 5G splurge 30 Jul 2019 The telecom giant blacklisted by Washington in May says first-half revenue rose 23%, despite tensions abroad. Longer term, it is Beijing’s push on next-gen mobile networks that will shape Huawei’s fate. Forcing carriers to step up infrastructure spending can soften the U.S. blow.
Reckitt Benckiser will toil to hurdle lower bar 30 Jul 2019 The Strepsils maker failed to grow in the second quarter and cut a 2019 revenue growth goal to 2-3%. Even that looks tough given hard-to-fix issues in its health business such as baby food. Incoming CEO Laxman Narasimhan must overhaul its ailing healthcare unit before a breakup.
Sony reaps accidental rewards from unruly sprawl 30 Jul 2019 Sales of chips offset falling video-game revenue at the Japanese group, pushing its quarterly operating profit up 18%. Even so, there's little strategic value keeping the two divisions together. Sony's music and movies arms, though, make for a better kind of conglomerate.
GAM truce marks start of long rehabilitation 30 Jul 2019 The Swiss asset manager is burying the hatchet with a former employee linked to a $11 bln fund scandal that knocked 60% off its market value. Shelving litigation will help new boss Peter Sanderson focus on rebuilding the franchise. New inflows are an early sign the worst is over.
Centrica’s CEO exit is only partially deserved 30 Jul 2019 Under-fire boss Iain Conn will leave the UK utility next year. Had he quit oil and gas production sooner, Centrica shares might not have dived 70% during his tenure. But preparing an ageing utility for the energy transition while battling state price caps was a thankless task.
The Exchange: Soccer gets smart 30 Jul 2019 It’s summer, which means top teams like Barcelona and Manchester United are brandishing their cheque books in the player-transfer market. But the way soccer clubs choose their stars and fund the purchases is changing. Researcher Sophie Tomlinson and financier Jason Traub explain.