Italy is petri dish for western virus control 24 Feb 2020 Authorities have locked down towns, shut schools and banned gatherings in the wealthy north to contain a coronavirus outbreak. That risks hurting growth in Europe’s industrial core. It’s also a test of how far democratic economies can push draconian emergency measures.
Europe’s free market in bank CEOs is a red herring 24 Feb 2020 Musical chairs at top lenders imply boards have to pay more to keep a top flight boss. Yet internal promotions at the likes of Credit Suisse and the difficulty of attracting pricey U.S. executives complicate matters. That could keep a check on pay inflation.
Virus aid one-upmanship spreads across China tech 24 Feb 2020 Meituan Dianping is subsidising takeout while smartphone-maker Xiaomi may diversify into medical equipment to help fight the outbreak. Such moves are laudable, given China’s poor track record in philanthropy. The financial impact on companies, though, looks less certain.
Chinese consumers imperil V-shaped virus rebound 24 Feb 2020 The slowdown in new Covid-19 cases outside Hubei has fed investor optimism. Local stock prices are trading at pre-outbreak levels, helped by stimulus efforts. But even if the epidemic has peaked, which is far from certain, stress in the private sector hints at a slower recovery.
Texas becomes oil vampire squid 21 Feb 2020 Even though fracking doesn’t produce corporate profits, the Lone Star state’s plentiful oil continues to attract investment. That’s been a boon for state coffers. But much like OPEC, U.S. drillers elsewhere are feeling the squeeze. Texas’s success is at the expense of others.
YouTube makes itself a needless political football 21 Feb 2020 President Trump has bought prominent ads on the video platform on Election Day. That’s because YouTube has enormous reach. Yet, parent Alphabet is in regulators’ crosshairs and campaign money is a tiny slice of revenue. It’s a wonder why it accepts political ads at all.
Fintech M&A shows bank disruption stuck in infancy 21 Feb 2020 LendingClub set out to upend retail finance by making small loans online. But like Radius, the digital bank it’s now buying, it’s still small fry. Sure, venture-capital funding for such upstarts is robust, but deep-pocketed incumbents like JPMorgan retain the upper hand.
Bank of England’s AI approach will toughen up 21 Feb 2020 UK finance has yet to face many restrictions on using artificial intelligence. But the technology brings risks as well as opportunities, the BoE’s fintech director told Breakingviews. A light-touch approach will change as machines make increasingly important financial decisions.
HSBC succession farce may undercut strategic plan 21 Feb 2020 Chairman Mark Tucker is considering UniCredit’s Jean Pierre Mustier for the CEO job. Interim boss Noel Quinn has unveiled an overhaul but the ambitious Mustier likely has his own ideas of what’s needed. If the outsider is picked, the restructuring may eventually be restructured.
UBI will struggle to rebuff Intesa’s embrace 21 Feb 2020 The Italian bank is exploring alternatives to its larger rival’s $5.3 billion hostile takeover bid. A tie-up with state-owned lender Monte dei Paschi would be complex and costly. Other escape routes look equally unattractive. And Intesa has some room to woo reluctant investors.
India-born CEOs take one step back, two forward 21 Feb 2020 The governance mess at Gulf hospital operator NMC has put an Indian executive on the map for the wrong reason. But the country’s huge business diaspora is taking charge of giant firms like IBM. The international influence highlights a dearth of local opportunity.
Review: Hong Kong activist waves red flag on China 21 Feb 2020 Joshua Wong was imprisoned last year for organising protests in 2014. In "Unfree Speech", he blames inept political leaders for the latest violence. He also makes a convincing case that China's tightening grip on the financial hub is part of a broader threat to global democracy.
SoftBank gives only an inch to clear Sprint static 20 Feb 2020 Masayoshi Son’s firm is taking a modest $5 bln hit to clinch Sprint's $120 bln merger with T-Mobile US. The latter could have pushed harder, but that might have put the long-awaited deal at risk. The dance with each other, and with regulators, seems to be over without a fall.
HP’s fire-with-fire defense does it no favors 20 Feb 2020 The printer maker adopted a poison pill to stop bidder Xerox from digging in further. Aggressive bids justify robust responses. But HP would gain more credibility by laying out its valuation argument clearly for shareholders before putting up prohibitively defensive measures.
Morgan Stanley-E*Trade deal puts D.C. on the spot 20 Feb 2020 It’s the first major acquisition by a big bank in over a decade, which virtually guarantees political scrutiny. Yet regulators like the Fed seem amenable to financial mergers. Political detractors can’t easily sabotage the $13 bln deal, but they could upset the delicate timing.
E*Trade embodies Wall Street’s stodgy middle age 20 Feb 2020 Serving armchair investors is as unracy as it gets for erstwhile masters of the universe. Yet Morgan Stanley’s $13 bln purchase of an online broker makes sense given the rise of passive funds and decline of securities trading. Wall Street’s future is boring, and profitably so.
Holding: Big Tech’s U.S. legal exceptionalism 20 Feb 2020 The approval of T-Mobile US’s merger with Sprint is the latest sign that different rules apply to technology firms. Consequences include gig-worker gripes, unchecked online lies, and abuses of corporate power. Congress and the courts should focus more on equality under the law.
Viewsroom: BP, Delta shift out of climate neutral 20 Feb 2020 The British fossil-fuel giant and the largest U.S. airline have each pledged to effectively stop emitting carbon over time. The ambition is encouraging and puts them ahead of most rivals. But both fall short on all-important details. There’s plenty of runway to do better.
Speedway could leave 7-Eleven with overfull tank 20 Feb 2020 The convenience store chain’s Japanese owner Seven & i may buy Marathon’s gas station business for $22 bln. If it does so with cash, then the acquisition would load it up with debt for what looks like a measly return. That might be why investors sent the shares down 9%.
Dutch grocer can afford $7 bln U.S. shopping spree 20 Feb 2020 Ahold Delhaize, the $28 bln owner of Stop & Shop supermarkets, churned out cash after another strong quarter. The success suggests it could hoover up smaller U.S. players. Several grocers might be an option, though Ahold might have to compromise on its preferences.
Morgan Stanley beats Goldman to E*Trade punch 20 Feb 2020 Buying the online broker for $13 bln gives James Gorman’s Wall Street firm stable income, higher returns and cheap retail deposits. David Solomon has promised that too at Goldman Sachs, albeit via other means. It leaves Solomon, still tackling regulatory issues, on the back foot.
Air France lays down worrying coronavirus marker 20 Feb 2020 The Franco-Dutch airline’s shares fell 7% as it warned of a 200 mln euro hit from the virus. Rivals BA-owner IAG and Lufthansa will also feel the travel drag. Yet Air France-KLM’s estimates count on a quick resolution. That suggests even more pain could be ahead for investors.
Julius Baer gets off lightly for dirty money sins 20 Feb 2020 The Swiss finance watchdog demanded better controls and barred the bank from embarking on major deals for now. That’s mild punishment given the systematic failings that were uncovered but reflects limits on what the supervisor can do. The regulator could really use sharper teeth.
GAM does just enough to become a takeover target 20 Feb 2020 The Swiss asset manager saw profits fall 92% as a compliance scandal caused clients to pull funds. New CEO Peter Sanderson is pledging to cut costs and boost margins, but his targets look optimistic. Still, if Sanderson can steady the ship, GAM could look appealing to a buyer.
New UBS CEO is best answer to a difficult question 20 Feb 2020 The $50 bln group’s ideal successor to Sergio Ermotti would have experience running a big lender along with wealth management and investment banking chops. That’s a rarity. ING’s Ralph Hamers brings cost-cutting and tech savvy. Holland’s pay rules made him an affordable asset.
Thai IPO tests waning market enthusiasm 20 Feb 2020 Central Retail shares opened flat on their debut. Cornerstone investors helped it price near the top of its range, although the economic timing couldn’t be worse. Thailand’s listing market has stayed hot even as post-IPO performance has cooled. One of these trends can’t last.
HNA journey lurches to fitting return home 20 Feb 2020 The Chinese conglomerate was already cash-strapped before the coronavirus hammered travel. Selling assets has been a struggle, leaving $80 bln of debt piled up. A government bailout in the making should imprint a strong reminder about the risks of costly overseas adventures.
Coronavirus may come for boards and CEOs 20 Feb 2020 Infectious diseases are inevitable, but the financial havoc they wreak is not. Pandemics and efforts to contain them eat away an estimated 1% of GDP each year. Too many companies have failed to prepare, and shareholders ought not shrug off the Wuhan episode as a black swan.
Election that Bloomberg buys may not be his own 20 Feb 2020 The billionaire fumbled his first debate as a presidential contender. But his political machine matters more than his performance. Bloomberg has 2,100 staffers, provides corporate-style perks and may drop over $500 mln on TV ads. It’s a springboard for future Democratic hopefuls.
JPMorgan’s days as governance bugbear are numbered 19 Feb 2020 Lead director Lee Raymond is a bete noire for investors worried about climate change. Yet shareholders consistently re-elect him, favoring the bank’s strong performance over its weak oversight. When CEO Jamie Dimon retires, JPMorgan’s exceptionalism ought to depart with him.