Japan’s deal with Trump clears economic decks 26 Sep 2019 Prime Minister Abe has won an accord with Washington covering agriculture, machine tools and digital products. Critically, Tokyo’s automotive sector may also escape punishing tariffs. Abe can now focus on shoring up his weak economy, and Trump on cutting a deal with China.
Farmers will turn activists to mop spilt Kiwi milk 26 Sep 2019 New Zealand's Fonterra, reeling from writedowns and its worst ever annual loss, will cut back overseas. Battered investors can press for more from the world’s largest dairy exporter. That includes fixing the $3 bln giant’s contradictory structure by carving out consumer brands.
Alibaba is too old for retro financial nonsense 26 Sep 2019 China’s e-commerce giant figures its $450 bln market cap would more than double if its customers were valued like Amazon’s. That’s a silly comparison for a 20-year-old company with solid growth and profit. A planned Hong Kong listing and the trade war explain the defensive hype.
Aston Martin gets license to kill or cure itself 25 Sep 2019 The eye-popping 12% interest rate on the luxury automaker’s new $150 mln bond highlights creditor concerns about demand, cash burn and Brexit. But if targets for a new SUV are not met quickly and the company again runs short of cash, investors may find the yield is not enough.
SoftBank woes give tech funding rivals more space 25 Sep 2019 Masayoshi Son’s firm has poured billions into Silicon Valley, sometimes deploying sharp elbows. Trouble at holdings like WeWork may slow it down. That helps rival investors like Sequoia. It’s also good timing for Blackstone’s new growth fund as it prepares to start investing.
EBay CEO exit sends warning call to AT&T boss 25 Sep 2019 Devin Wenig is leaving months after Elliott Management politely persuaded the $32 bln online marketplace to sell assets and improve operations. The activist investor has launched a similar campaign against the $273 bln telecom firm. The outcome could be the same.
Hadas: Good economy helps with climate change 25 Sep 2019 Man-made global warming is an urgent concern for heads of state gathering at the United Nations. Receding poverty, technological momentum and slowing population growth all make the challenge less daunting. These great economic trends need more support from governments.
Altria-PMI deal could waft back into view 25 Sep 2019 A $187 bln merger between the cigarette companies was stubbed out by turmoil at Juul, in which Altria owns 35%. The market already suggests the vaping upstart is worth less than Altria paid. If it falls more, the logic of a combination could bring PMI back for another pull.
Hong Kong’s LSE bid conceals a shrewd Beijing view 25 Sep 2019 David Schwimmer, CEO of London’s bourse, says China is opening up. HKEX boss Charles Li has partly based a $34 bln pitch for his rival on the opposite. Experience suggests Li's diagnosis on capital controls is right. Whether his prescription is correct is another matter.
Thyssenkrupp CEO exit will help its elevator pitch 25 Sep 2019 Guido Kerkhoff is on his way out at the German industrial conglomerate after 14 months, a 40% share price drop and various U-turns on strategy. His interim replacement backs a plan to sell the lifts business. Just as well since this offers the best chance of boosting valuation.
Nigeria is right to fight $9 bln arbitration claim 25 Sep 2019 The African nation is refusing to honour a ruling by UK-based judges on a failed gas project. Abuja is on thin ice because it failed to appeal on time. But the contract awarded to a little-known Irish firm looks suspect. Reopening the case would be a victory for common sense.
Indian office towers rise above economic slump 25 Sep 2019 A Blackstone-backed $4 bln real estate investment trust has thrived since going public in April, outpacing local blue-chips and defying a broader slowdown. Developer debt woes and creative startups will open the doors wider to this hard-to-access and higher-yielding market.
Canadian miner gives copper a belated deal patina 25 Sep 2019 China’s biggest producer of the metal may have built a nearly 10% stake in $6 bln First Quantum, and is negotiating to invest in its Zambian assets. The low price of copper, and depressed industry valuations, make it a good time to do more. It puts Rio Tinto on the M&A spot.
White House tests corporate corruption firewall 24 Sep 2019 From withholding Ukrainian aid to making money out of lodging visiting dignitaries, the U.S. administration has muddied the waters on acceptable behavior. Companies face tougher enforcement, which helps keep them on the straight and narrow. The gap between the two is widening.
WeWork’s Neumann moves from penthouse to basement 24 Sep 2019 The office-sharing firm’s boss will cede both his CEO role and control of the company, Reuters reported. That may be enough to secure capital from his backers, but not enough to justify an IPO. WeWork’s drama is now one that looks likely to be played out away from public view.
Ghosn’s power would get lost in translation 24 Sep 2019 The SEC claims the former Nissan boss hid half his salary to avoid public opprobrium, and was able to do so because of lax controls. It’s a stark contrast to the United States, where governance is strong but social pressure over pay is weak. Both systems fail in different ways.
Facebook’s brain-computing goals are distant 24 Sep 2019 Mark Zuckerberg’s $533 bln social network is taking a step toward making computers even more omnipresent by purchasing CTRL-labs, a startup tapping nerve signals to control devices. It’s a little creepy, but it’s also a long-term spur for a company mired in near-term problems.
Johnson’s legal spanking barely moves Brexit dial 24 Sep 2019 The Supreme Court’s unanimous ruling that the government illegally shut down parliament would normally be the end of the British prime minister. But his majority has already disappeared. The most likely outcome remains as before: another Brexit extension and a bitter election.
Volkswagen’s damaged CEO remains roadworthy 24 Sep 2019 Herbert Diess has presided over a share price fall, made a Nazi joke, and may now face a criminal charge of market manipulation. Assuming he survives the latter, his recent truck IPO and focus on electric vehicles are right. Oddly, the $85 bln group would be weaker without him.
Credit Suisse spy caper explodes Swiss discretion 24 Sep 2019 The Swiss bank’s former wealth management boss Iqbal Khan called police after private detectives pursued him around Zurich. Lenders have legitimate fears about rivals poaching staff. But snooping on bankers suggests paranoia, while getting caught in the act is just incompetent.
Europe’s $8 bln buyout star outshines U.S. rivals 24 Sep 2019 That’s the market value of Swedish firm EQT after its share price popped 25% on its first morning. The valuation makes sense if pension funds and others keep pouring cash into private equity. Still, the premium to larger and more diverse groups like Blackstone is striking.
Ikea doubles down on China’s risky smaller cities 24 Sep 2019 The Swedish furniture giant will pump $1.4 bln into expanding its operations in the People’s Republic, joining Starbucks and others seeking fresh growth in poorer provinces as mature coastal markets slow. In key aspects, however, China's interior is falling behind, not catching up.
Aussie lender’s revamped IPO is poorly timed 24 Sep 2019 KKR-backed consumer finance outfit Latitude is planning a listing that could value it at $2.5 bln, a more modest pitch than in 2018. Since then, big banks have retreated and the equity market has heated up. Wages are flatlining, though, raising risks for providers of easy credit.
Hong Kong’s IPO debutants rely on helping hands 24 Sep 2019 AB InBev raised $5 bln through a relaunched float of its Asia unit, but only after pre-selling stock and pricing it low. There’s appetite for listings in the city despite ongoing protests, but at a discount and with cornerstone support. Followers may need to take the same tack.
Fosun books early return flight from UK holiday 24 Sep 2019 Iconic travel company Thomas Cook collapsed after Downing Street declined a bailout, leaving hordes of tourists stranded. Fosun Tourism’s 450 mln pound rescue attempt, which might have salvaged its stake, stands abandoned. Shareholders in the Chinese company may feel the same.
The Exchange: Lord John Browne 23 Sep 2019 The former BP boss-turned-renewable-energy-supporter-turned-gas baron stops by to discuss “Make, Think, Imagine,” his new book that’s part an explanation of and part an ode to the benefits of engineering. As UN Climate Week kicks off, he also discusses his take on global warming.
Guest view: Water can make or break climate action 23 Sep 2019 Billions lack access to safe water and sanitation. Traditional fixes are energy- and carbon-intensive. But as Peter Gleick of the Pacific Institute and Gary White and Matt Damon of Water.org argue, a mix of leak detection, renewable power and green finance can take up the slack.
Climate-savvy financiers are the next jobs bubble 23 Sep 2019 Banks and investment firms need people with the skills to raise their environmental game. Technology and on-the-job training can help. But for better or worse, outside hires send a stronger signal. With clients and consultants chasing the same talent, it will get expensive.
Green finance can fix its Groucho Marx problem 23 Sep 2019 The comic once quipped he wouldn’t join a club that would have him as a member. With lots of signatories but muted impact, the U.N.-backed PRI has long been the butt of similar jokes. New pledges need tough bouncers and a better VIP area. French bank Natixis may have a solution.
WeWork founder’s strong hand gets rapidly weaker 23 Sep 2019 On paper, Adam Neumann controls the cash-burning office-share firm he co-founded. In reality, the company’s need for capital means investors like SoftBank call the shots, and might even oust him as CEO. Supervoting shares mean nothing absent a way to make money.