Remy Cointreau’s woes are weighty but temporary 24 Jan 2020 The spirits maker is relatively more exposed to Hong Kong and China, so protests hit sales harder. The coronavirus and U.S. trade war fallout add extra pressure. But with demand for pricey cognac on the up, Remy still deserves a premium to Diageo and Pernod Ricard.
Atlantia charts tentative path to road truce 24 Jan 2020 The $19 bln infrastructure group’s new boss wants outsiders to invest into its units. These include embattled motorway operator ASPI, which risks losing a rich road concession after a bridge collapse. Opening ASPI’s capital to state investors offers a way out of the crisis.
Hadas: Davos-economics faces political puzzles 24 Jan 2020 Most of the power brokers gathered in Switzerland assume powerful private sectors and ample international trade bring strong growth. So why is China tightening state control? Why is the UK stumbling towards less trade? Maybe Ethiopia can show the old recipe still works.
Wuhan virus will shape China’s smart city vision 24 Jan 2020 The metropolis of 11 mln is under quarantine. Big investments in healthcare, AI and even surveillance led by the $50 bln Hikvision and other giants could help curb future contagion risk. That might compensate for less tractable problems: human error and institutional weakness.
Hong Kong homecoming bets are only half a whim 24 Jan 2020 Trip and Baidu are mulling secondary listings in the Asian hub, following in the footsteps of Alibaba. Early evidence suggests that could boost valuations. For now, it’s more convincingly a hedge against any politically-driven crackdown on Chinese companies listed in New York.
Viewsroom: China’s latest viral threat 23 Jan 2020 The outbreak of a contagious disease before the Lunar New Year holiday evokes memories of SARS’ human and economic toll in 2003. Beijing’s swift reaction this time, imposing travel bans on five cities as 18 died, is encouraging. Plus: the cost of the UK royal family’s new schism.
SoftBank’s next problem: Sprint M&A interference 23 Jan 2020 CEO Masayoshi Son values his group’s stake in the U.S. carrier at $29 billion, a reflection of its original deal with T-Mobile US. Investors rightly take a dimmer view. Courts may block the deal. But even if they don’t, T-Mobile has a strong case to lower its price.
Wells Fargo fine is one half of a double deterrent 23 Jan 2020 Former boss John Stumpf will pay $17.5 mln for overseeing pervasive misbehavior at the U.S. bank. It may dissuade other executives from wrongdoing, but pales next to the $75 bln or so foregone by investors. That seems just, too: In some ways they were also asleep at the wheel.
Podcast deals put new spin on sorry old tale 23 Jan 2020 Spotify is collecting podcast content in addition to distributing it. The New York Times may be after hit series “Serial.” Splashy deals validate both talented productions and wannabe radio show hosts. But like blogs, low barriers to entry threaten valuations across the board.
Nelson Peltz plays important second fiddle at P&G 23 Jan 2020 Shares in the $315 bln consumer-goods company have jumped 36% since the activist snagged a seat on the board. But P&G’s success stems from plans CEO David Taylor had already put in motion. Encouraging execution, rather than offering new ideas, is working out fine so far.
Do-gooder one-upmanship fuels optimism at Davos 23 Jan 2020 Corporate chiefs are brimming with purpose. They’re high on stewardship and sustainability, a theme of the confab. Unilever’s cutting back on plastics. Aluminium smelter En+ is planting 1 mln trees. Unlike past years, the pledges go beyond PR – and they can be held accountable.
U.S.-France digital tax truce could easily unravel 23 Jan 2020 Treasury Secretary Steven Mnuchin is no longer demanding that any global Big Tech levy be optional, while Paris will delay collecting payments from groups like Google. That was the easy part. Even basics, such as how much to charge such companies, will be harder to hammer out.
PG&E is squandering its bankruptcy 23 Jan 2020 The California utility’s latest restructuring plan helps wildfire victims and insurers. But PG&E would be left more indebted than when it started, and the Golden State has punted tough decisions. Being reliable, green, cheap and profitable at the same time remains a challenge.
Italian banks will yield to M&A imperative 23 Jan 2020 A decade after the euro zone crisis erupted, the country’s lenders have shed most of their bad debt and doubled their capital ratios. The problem now is low returns. Negative interest rates and attempts to limit sovereign bond holdings make mergers with rivals more pressing.
Soaring Swedish buyout shop looks overpriced 23 Jan 2020 The share price of $13 bln EQT has almost doubled since its September IPO. CEO Christian Sinding can point to good private-equity returns and a rapid rise in assets under management. That success may be harder to sustain given increasing competition for deals and capital.
Guest view: China bonds enjoy best of worst times 23 Jan 2020 Defaults are at record highs, yet foreign money keeps chasing yield in the country’s fixed-income market. China finance specialist and author Fraser Howie argues Beijing can console itself: its bonds are part of the global investment landscape as never before.
Flying cars are a cool solution to a tiny problem 23 Jan 2020 Toyota has pledged $394 mln to support aviation startup Joby; Geely and Hyundai are also dabbling. Technology advances have put commercialisation within reach, and regulators will slowly come to grips with the idea. The final frontier is finding actual customers.
Boeing needs MAX insurance more than a dividend 22 Jan 2020 The $175 bln aircraft giant’s new CEO, David Calhoun, says he won’t cut its $4.6 bln a year dividend. Yet Boeing will burn cash as long as the 737 MAX remains grounded. Borrowing more can paper over problems, but cutting the payout would be prudent in case of further delays.
GM’s investors school Tesla’s on self-driving hype 22 Jan 2020 Shares in Mary Barra’s $50 bln carmaker barely budged after it unveiled its autonomous vehicle, yet the potential of similar technology helped Elon Musk’s outfit to top $100 bln in market value. Considering true self-driving remains a long way off, GM’s owners are more realistic.
Billionaires’ cash wins over critics in U.S. race 22 Jan 2020 Mike Bloomberg and Tom Steyer boosted their presidential poll ratings after doling out a total of $380 mln for political ads. That’s more than twice the outlay of all other contenders combined. But Bernie Sanders’ small-donor approach may well prove more potent in the end.
Xerox’s HP bid walks, quacks like Carl Icahn 22 Jan 2020 The printer maker may try to oust most of HP’s directors to win support for its $33 bln merger proposal. HP’s intransigence isn’t constructive, but its board is stronger. A proxy fight could leave Xerox activist Icahn in control, with only a small share of the company.
Banks feel the heat of global warming in Davos 22 Jan 2020 Climate change is the hot topic at this year’s Swiss mountain gathering and financial institutions are in the spotlight. Large investors like BlackRock can force some changes. But regulatory pressure on lenders to manage the risks of a warmer planet may prove more effective.
Naspers rejig only nibbles at Tencent discount 22 Jan 2020 The African tech group has sold $1.7 bln of shares in its Amsterdam spinoff Prosus, whose main asset is a $150 bln stake in the Chinese web giant. Using the funds to buy back stock has merit, but Naspers will have to be bolder if it wants to close the Dutch firm’s valuation gap.
Alstom-Bombardier rail M&A would face faulty track 22 Jan 2020 The $11 bln French train maker and its Canadian rival are discussing a deal, Bloomberg reported. The former’s failed deal with Siemens posed more obvious EU antitrust issues, but Brussels may still balk. And synergies that rely on big job cuts in France will be politically toxic.
Italy’s honeymoon with EU is under threat 22 Jan 2020 Luigi Di Maio looks set to step down as head of the 5-Star Movement, the largest party in the ruling coalition. That will strain the alliance. If a crucial regional election on Sunday produces a victory for eurosceptic Matteo Salvini, it may imperil the fragile pro-EU government.
Sainsbury’s new CEO will need outsider’s mindset 22 Jan 2020 The UK grocer’s operations director, Simon Roberts, will succeed Mike Coupe in June. The new chief executive’s three decades of experience in retail will be useful. But he may have to rewrite his predecessor’s plans if he wants to deliver better returns for shareholders.
Lotte scion gets chance to inspire Korea Inc 21 Jan 2020 Shares in South Korea's fifth-largest conglomerate rallied after the death of founder Shin Kyuk-ho. His son, already in charge of the group, has promised aggressive restructuring. With diplomatic, legal and family spats winding down, he has space to hurry up.
Aussie fires light tiny flame under climate action 22 Jan 2020 The damage may cost an estimated 0.5% of GDP, barely registering in the $1.3 trln economy. Politicians may act as social costs mount, but change will come faster if stakeholders also heed warnings that “secondary perils” could be recurring rather than one-off.
How Jamie Dimon can grab Larry Fink’s green halo 21 Jan 2020 Now that the BlackRock boss has got serious about climate change, the focus is on his JPMorgan peer. As CEO of the biggest U.S. bank, Dimon’s sway over corporate debt gives him more power than any equity activist. Deploying it would turn his bank from laggard to leader.
Netflix investors risk ruing streaming-stock binge 21 Jan 2020 Reed Hastings’ firm has little if any need for TV ratings, box-office sales or ads, unlike rivals. Shareholders focus on subscriber and revenue growth, fueling its stock-market success. But a slowdown in new users and an excessive, if declining, cash burn put that under threat.