Russian oil group’s cash gusher could stay capped 5 Sep 2019 Surgutneftegaz shares have surged on reports of a new subsidiary, which may unlock its $50 bln cash pile. Yet the boss of the secretive $24 bln energy company is under U.S. sanctions and it’s at risk of fresh ones. The bonanza could just remain a buffer against bad news.
New Nordea boss faces déjà vu cost-cutting test 5 Sep 2019 The $25 billion Nordic bank is changing gears, replacing its CEO earlier than expected with Frank Vang-Jensen, who successfully slashed expenses at Swedish rival Handelsbanken. To meet its new financial targets and keep activist Cevian happy, Nordea will need the same treatment.
Corporate South Africa feels expansion’s downside 5 Sep 2019 The nation’s banks, retailers and telcos have spread across the continent. With rioters in Johannesburg now attacking African migrants and their businesses, they’re facing boycotts in Nigeria and Zambia. That’s a problem for the likes of MTN that get lots of revenue from abroad.
Vatican’s flaky finances pose Augustine dilemma 5 Sep 2019 The Holy See’s deficit doubled to 70 mln euros last year, a big chunk of its 300 mln euro spending. The sober route is for some Maastricht-style fiscal curbs. But low rates offer theoretical scope for a version of Saint Augustine’s famous wish for self-restraint, just not yet.
Nissan CEO has overstayed a lukewarm welcome 5 Sep 2019 Hiroto Saikawa and others may have padded their pay. The figures appear small compared to allegations levied against Carlos Ghosn, but it hardly matters. Saikawa has not rebuilt credibility or fixed performance at the $25 bln carmaker. Investors have no cause to remain patient.
Carrie Lam climbdown hints at Beijing’s priorities 5 Sep 2019 Hong Kong’s chief executive withdrew a controversial extradition bill, probably with central government approval. Her other comments implied that mainland officials are focused on risks to China’s positive international image. Trade negotiators should take note.
Slack channels its way into unenviable company 4 Sep 2019 Like Snap and Blue Apron before it, the workplace-messaging service disappointed investors in its debut quarter as a public company. Revenue is still growing at a decent clip. But growing trade and recession fears are making once-giddy shareholders focus more on the bottom line.
Exxon CEO risks fueling unholy investor alliance 4 Sep 2019 Darren Woods reckons human progress and the unreliability of alternative energy sources justifies investing more in emissions-laden fossil fuels. But his argument ignores the $293 bln driller’s poor returns. That may give financial investors common cause with climate activists.
Woke capitalism is a winner in the 2020 campaign 4 Sep 2019 Democratic White House hopefuls blame the U.S. economic system for growing inequality. Their plans target private equity, banks, corporations and the rich. A wealth tax may not be as effective as it looks. But some ideas may start to cut the gap between the haves and have nots.
Tapestry’s luxury conglomerate dream unravels 4 Sep 2019 The owner of handbag maker Coach has replaced CEO Victor Luis, under whom the shares halved. Its Kate Spade brand is performing poorly, while Coach is more solid but lacks rivals’ cachet. Turning round a luxury brand is tough, but turning around a conglomerate is even harder.
Opioid settlements are best sent to rehab 4 Sep 2019 Local governments may win $100 bln from drug firms over an epidemic costing society $500 bln a year. That’s akin to tobacco’s giant payments, most of which disappeared into budgets. Yet drug treatment generates sevenfold returns. Localities can’t afford to waste this windfall.
WeWork governance fixes highlight the unfixable 4 Sep 2019 Co-founder Adam Neumann has handed back $5.9 mln he was paid for trademarks. And the shared-office group has finally hired a woman as a director. Yet such easy repairs only underline the harder-to-reach problems: structurally poor governance, huge losses and impenetrable numbers.
Hong Kong leader’s overdue concession is a start 4 Sep 2019 Carrie Lam has formally withdrawn an extradition bill which triggered months of often violent anti-government demonstrations. The local market, and battered brands like Cathay Pacific, have rallied. It will take more to appease protesters and keep that recovery going.
Stakeholder capitalism gets German reality check 4 Sep 2019 U.S. Democrats and even CEOs are saying companies should be run for workers, not just investors. In a market where employees already have a say, AMS’s $4.8 bln bid for Osram reveals the flaws. Boards can do little to rebuff the highest cash offer, even if the buyer is unstable.
Italy’s budget is chance to reset EU relations 4 Sep 2019 The first test for Prime Minister Giuseppe Conte is to get his new administration’s sums to add up. Though debt is still rising, tightening spending while the economy weakens risks fuelling deeper anti-EU sentiment. Brussels should give the new government some flexibility.
Data-centre IPO is safer proxy for tech bubble 4 Sep 2019 UK-based Global Switch aims to raise $1 bln in Hong Kong. Rising internet usage requires more server warehouses. Returns have been better for this type of real estate than other humdrum property, too. It’s a neat way to play the cloud and 5G era for buyers with a weaker stomach.
Chinese consumers are deceptively perky 4 Sep 2019 Sales of athletic gear, appliances and such have kept growing at 7-10% in defiance of economic headwinds blowing more strongly. Tax cuts and rising property values are helping. Without such support, the likes of Tiffany, Haier and Yum China are likely to feel the slowdown’s pinch.
Walmart edges onto right side of gun debate 3 Sep 2019 The U.S. retailer already stopped selling assault-style weapons – now it won’t sell ammo for them either. That won’t end gun violence, but doing so isn’t really Walmart’s responsibility. More decisive moves would have to come from government, which looks even more out of touch.
Amazon has an ubersized labor problem 3 Sep 2019 California lawmakers want Uber and Lyft to treat drivers as employees. The firms’ alternative is to offer minimum wages and paid sick leave. Amazon has been quiet but increasingly relies on gig couriers without benefits. It’s time for Jeff Bezos’ firm to be part of the solution.
U.S. manufacturing slump is a self-inflicted wound 3 Sep 2019 American factory activity fell for the first time in three years in August, as President Trump’s trade war with China hit home. Fresh tariffs could compound the woes. At least manufacturing’s role in the economy has shrunk. But that underscores the futility of White House policy.
The Exchange: White House hopeful Tom Steyer 3 Sep 2019 The hedge fund founder has already spent millions to impeach Donald Trump. He’s now trying to replace the U.S. president, joining a crowded Democratic field. The Exchange went to his campaign office to discuss why he is running and what he thinks of businessmen as politicians.
Climate-activist investors are due for a new dive 3 Sep 2019 Treating and moving water can account for 20% of energy use. And many companies are ignoring the risk to their operations of too much or too little of the liquid, judging by a recent industry conference. That presents fertile ground for pushy stock- and bondholders.
Upstart dental unicorn’s IPO is a risky bite 3 Sep 2019 Online tooth-alignment service SmileDirectClub is targeting an $8 bln IPO valuation. It’s growing quickly, but profitability looks fashionably distant. Along with governance that entrenches bosses and extra risk of regulatory scrutiny, investors may feel a toothache coming on.
Johnson’s “do or die” Brexit is unravelling 3 Sep 2019 The prime minister promised to leave the EU by Oct. 31. Britain’s parliament may force him to again delay departure, and a fallback plan for an early election hinges on unlikely opposition support. Just six weeks in, Boris Johnson is running out of ways to escape the Brexit mire.
Just Eat M&A bump may have a long delivery time 3 Sep 2019 A top investor in the UK food-delivery group says it will vote against Dutch peer Takeaway.com’s all-share bid, now worth 5.1 bln pounds. A higher price could be needed to seal the deal. But with no rival bidder in sight, Takeaway CEO Jitse Groen can wait until the last minute.
UK building supplier adopts Peltz’s American dream 3 Sep 2019 Ferguson plans to spin off its British unit and focus on the United States, as suggested by the activist. Trading more in line with U.S. peers should boost shares in the 14 bln pound group. But UK-based holders could make moving the primary listing to New York a tough project.
Indian bank merger extravaganza will hurt first 3 Sep 2019 New Delhi wants to combine 10 state-owned lenders into four, as it cleans up a sector weighed down by bad debt. But job cuts are ruled out, putting synergies out of reach, and a recent combination of three others destroyed value. It's a costly distraction for a flailing economy.
Hotelier bidding war may be Japanese wakeup call 3 Sep 2019 Travel agent H.I.S. ended its unsolicited tilt at Unizo, ceding to SoftBank-owned investment firm Fortress. The unusual hostilities for Japan helped the target’s stock price more than double. This deal, enabled by wider reforms, suggests more value could be hidden in plain sight.
New Aramco chair bears small plus and bigger minus 3 Sep 2019 The Saudi oil giant has appointed the boss of its sovereign wealth fund to head its board. Potential IPO investors might appreciate Aramco being distanced from the energy ministry. They may not be so keen that the new appointee looks even closer to the kingdom’s crown prince.
China’s real estate cold turkey risks withdrawal 3 Sep 2019 The economy is cooling and the trade war is worsening, yet Beijing refuses to juice housing markets. Stimulus without touching a sector that feeds about 15% of GDP is hard. That officials are trying suggests they are willing to bear a lot of pain to hold home prices down.