U.S. unions are in need of reinvention 30 Aug 2019 Labor Day originally celebrated full-time and fairly paid employment. The unions which helped win such jobs have declined, in part because the people doing them are now mostly comfortable. Organising workers who are left behind is harder, but would be good for the U.S. economy.
Growing money on trees beats fossil-fuel returns 30 Aug 2019 Reforestation improves the management of water, soil and crops as well as storing carbon. It can also yield investment returns higher than Exxon and most of the other top 100 emitters of greenhouse gases manage. Especially with the Amazon rainforest ablaze, it merits top billing.
India gives markets two unwanted presents 30 Aug 2019 A 5% reported GDP growth rate will fuel fear of a return to the dreaded “Hindu rate of growth”. In a frantic attempt to boost confidence, New Delhi unveiled mergers of 10 state banks. India needs a radical financial overhaul to fix its home-grown economic woes. This isn’t it.
Review: The strange lure of free market economics 30 Aug 2019 Milton Friedman proclaimed that governments were always bad economic actors. Eventually, far too many people believed him. “The Economists’ Hour” tells how reality trounced ideology for decades. Though the fanatics are in retreat, economists are still far too fond of markets.
Hong Kong’s jittery shoppers are a bad omen 30 Aug 2019 Anti-government protests dragged retail sales down 11.4% in July. It’s an early measure of what unrest will cost an economy already on the edge of recession. After past crises like SARS, consumption recovered swiftly; a cooling China and other factors suggest this pain will last.
Japan is laggard in China-led scramble for Africa 30 Aug 2019 Tokyo wants its companies to pour more money into the continent, partly to counter Beijing’s influence. The U.S. is beefing up overseas finance for similar reasons. But with China’s $43 bln of Africa investments set to overtake America’s, rivals have a lot of ground to make up.
CNH can release valuation brakes with truck split 30 Aug 2019 The $14 bln Italian-American tractor-to-van group may spin off its struggling commercial vehicle unit, Bloomberg reports. Investors might pay more for a purer agricultural play. And independence might help the subscale vehicle business, whether on its own or in stronger hands.
Dixon: Greek PM makes good but not perfect start 30 Aug 2019 When Kyriakos Mitsotakis met German Chancellor Angela Merkel yesterday, he was able to point to a list of quick wins, including lifting capital controls. But the new Greek prime minister has also made errors. To change the country for good, he’ll have to learn from them.
China’s oil and gas titans heed the call to spend 30 Aug 2019 President Xi Jinping called for a boost to energy security, and first-half figures suggest state giants were listening: $81 bln Sinopec, for one, nearly doubled capital expenditure. That contrasts with caution abroad. U.S. sanctions only add urgency to national service.
India’s coal-fired growth requires some shovelling 30 Aug 2019 New Delhi, trying to juice the economy, will allow 100% foreign investment in the fuel. Local demand is rising, but resource giants have had bad experiences on the ground, and big miners are pulling out of thermal coal. India will have to work hard to make its tardy policy work.
Uniqlo owner’s luxury premium merits a rethink 30 Aug 2019 A South Korean boycott of Japanese goods has hurt Fast Retailing. It's another foreign snag for the $63 bln seller of cheap cashmere. Boss Tadashi Yanai needs shoppers abroad, given weakness at home; setbacks leave its valuation, racing ahead of Zara owner Inditex, looking rich.
Uber labor bill risks straying from righteous road 29 Aug 2019 The ride-hailing giant’s home state of California wants gig-economy firms to give workers paid vacation and sick time, following similar cases in Europe. Yet some old-school industries may get carve-outs. That would be a pity. It’s a chance to rethink protections for all earners.
Argentina debt flashback includes glimmer of hope 29 Aug 2019 President Mauricio Macri wants to restructure the country’s borrowings as his four-year effort to restore its economy and market standing nears an end. History warns against optimism, but the move could give his likely successor some breathing room – if he doesn’t squander it.
Listing Aramco in Tokyo has logic on its side 29 Aug 2019 In its lengthy quest to decide where and when it will list its shares, the Saudi oil giant may be leaning towards Japan. Tokyo’s reliance on Riyadh for oil supplies has always made it a valid choice. With other international bourses out of the picture, that may be reason enough.
Italy’s odd coalition offers deceptive stability 29 Aug 2019 The left-leaning Democratic Party and maverick 5-Star Movement are set to form a new administration under Premier Giuseppe Conte. That averts an election and a clash with Brussels. Past distrust and diverging views of business make the coalition as fragile as the previous one.
Pernod Ricard has watered down Elliott’s punch 29 Aug 2019 The Absolut vodka maker has been in the activist’s sights for insipid growth and weak operating margins. It’s now beating new improved targets in both, as well as starting to address its governance issues. That may be enough for Elliott to divert its heat elsewhere.
Opportunity costs pile up for Samsung 29 Aug 2019 The trial of the electronic giant’s de-facto boss, Jay Y. Lee, will drag on after South Korea’s top court overturned a softer sentence. It helps President Moon, who has little to show for his anti-corruption fight. For Samsung, it increases doubt over its ability to be nimble.
Micro Focus’s woes show downside of being listed 29 Aug 2019 Kevin Loosemore’s UK-quoted tech group made a hash of its $8.8 bln acquisition of HP’s old Autonomy business. Still, frequent double-digit share price swings distract management from a much-needed turnaround. The company, now worth $5 bln, may welcome a buyout group’s privacy.
Viewsroom: Brexit’s pro-rogue nation 29 Aug 2019 UK Prime Minister Boris Johnson has prorogued parliament, cutting the time available for lawmakers to thwart a planned Oct. 31 EU departure. What does this mean for Brexit and the UK economy? Plus: we pick through the wreckage of China’s crashing automotive market.
Hong Kong’s pain offers Singapore a little gain 29 Aug 2019 Anti-government protests have fed demand for visas and safe-haven pads abroad. Singapore has warned wealth managers not to take advantage. Officials fear instability, and angering Beijing, would overwhelm any benefit. The Lion City can offer softer lessons instead.
Toyota and Suzuki make a virtue of cross-holdings 29 Aug 2019 The carmakers are buying small stakes in each other, four years after Suzuki ended a rocky ride with Volkswagen. Although such deals are being unwound across Japan, this one holds promise. It may pave the way for a deeper alliance in an industry increasingly dependent on scale.
China’s big banks feel the bailout pinch 29 Aug 2019 Beijing, trying to slash a $310 bln bad debt pile, is pushing giants like China Construction Bank to rescue troubled smaller rivals. The effort hasn't hit earnings yet, but softer credit figures and less lending to peers suggests they are already moving to protect balance sheets.
Bill Dudley blows the U.S. central bank’s cover 28 Aug 2019 The ex-New York Fed boss proposed monetary-policy resistance to Donald Trump’s trade war. To be fair, the president exploded norms first. Yet Dudley, though now a private citizen, has weakened the Fed's apolitical credentials. It paints Chair Jay Powell further into a corner.
Peloton’s tech claims depend on too much spin 28 Aug 2019 The stationary bike outfit calls itself a technology, media and software firm in its IPO prospectus. True, it burns lots of cash and gives founders supervoting rights. But Peloton needs to retain online customers in an exercise market prone to fads. That’s far from a sure bet.
Johnson’s Brexit manoeuvre brings crisis to a head 28 Aug 2019 Britain’s prime minister wants to cut the time available for parliament to thwart his planned Oct. 31 departure from the European Union. Lawmakers who want to prevent a chaotic “no-deal” Brexit will have to move quickly. The chances of a contentious election have increased.
Permira plans $5 bln test of EU software appetite 28 Aug 2019 The buyout shop may list Germany’s TeamViewer, which sells technology for remote computer access. It’s part of a trend for enterprise-software groups offering just one service. U.S. peers have bumper valuations. The risk is that Europe’s sickly IPO market dents Permira’s returns.
Hadas: The right Brexit is still no Brexit 28 Aug 2019 Three years and two prime ministers after a divisive referendum, the UK is as far as ever from a national consensus on how to leave the EU. A decision to stay now would be economically sensible, globally responsible - and politically no harder than any variety of separation.
Tencent is stuck in a losing battle with Beijing 28 Aug 2019 A year after a video-games crackdown hit the web giant, its $21 bln music-streaming arm may be under antitrust scrutiny. That makes Pony Ma's hopes of building an entertainment empire look fragile. It’s a reminder too that China's tolerance of its new economy champions is waning.
Vodafone races against time to salvage India deal 28 Aug 2019 Since the British mobile giant unveiled a merger of its local business with Idea in early 2017, 90% of the equity value has vanished. As it tries to deliver $10 bln of promised synergies, rivals including Jio are adding 4G users faster. Another cash call may be needed.
Beijing-backed businesses riding to the rescue 28 Aug 2019 They account for about a quarter of China’s GDP, a new World Bank study reckons. Lending data suggest a larger impact and Fitch counts more than 100 recent cases of listed companies selling stakes to state-owned enterprises. Helping cushion a weaker economy will be a big burden.