Ryanair’s budget can stretch to truer green boasts 5 Feb 2020 The low-cost carrier has been ticked off for promoting itself as a low-carbon emitter. True, its planes are getting more efficient, but it’s still a huge polluter. Ryanair’s profitability means boss Michael O’Leary can afford to match rival easyJet in paying to offset its CO2.
Costs are weak spot in BNP Paribas’ bold ambition 5 Feb 2020 Europe’s biggest bank by assets reported a 12% rise in pre-tax profit and is grabbing market share in investment banking. Yet it also blamed low rates for cutting a returns target. Bringing expenses more in line with EU peers would allow CEO Jean-Laurent Bonnafé to stay ahead.
Imperial Brands’ new boss can tweak two metrics 5 Feb 2020 The tobacco company has a dividend yield way over 10% and has just had to write down flavoured vape inventory. Incoming Chief Executive Stefan Bomhard needs to hire a new products whizz and give them resources to find growth. He could use his honeymoon period to cut the dividend.
China fortune hard to read in Luckin Coffee beans 5 Feb 2020 Short-seller Muddy Waters targeted the $9 bln Starbucks wannabe, briefly stinging the shares. Erstwhile China bear Citron is defending the unprofitable company. Luckin has focused U.S. exuberance, and suspicion, over mainland consumer tech. The verdict remains oddly optimistic.
China shocks to global tourism have room to grow 5 Feb 2020 Travel curbs on the virus-hit country have shaken airlines and hotels. Even with a fast recovery as with the SARS epidemic, it’s a reminder of China’s vital role in the $1.7 trln tourism market. With millions more set to travel, any future jolts will only be more brutal.
ICE-eBay deal would signal return of merger mania 4 Feb 2020 The $52 bln NYSE owner may want to buy the $30 bln online-commerce firm. There’s little benefit to the combo. But it is the kind of tie-up that frothy markets and a lack of savvy alternatives throw up. Investors’ withering reaction should warn ICE boss Jeffrey Sprecher off a bid.
Ford boss may find he’s victim of Darwinism 4 Feb 2020 Jim Hackett was supposed to turn around the Detroit automaker’s fortunes. After almost three years in the driver’s seat, he’s finding success elusive: Ford ended 2019 with a surprise loss. Tesla’s surging valuation and overhauls at other rivals pile on even more pressure.
Baby Yoda makes life harder for NBC and HBO 4 Feb 2020 The buzz around the new Star Wars character helped Disney end the year with 27 mln paying subscribers on its streaming service, beating analysts’ estimates. That’s 16% of Netflix customers. Their two TV rivals, which have yet to launch a product, may struggle to compete.
Venezuela’s creeping reforms offer false hope 4 Feb 2020 A rum distiller just launched the country’s first public equity deal in 11 years. Banks are managing dollar accounts again. The government is relaxing price controls and might be loosening its grip on its state-owned oil giant. But it’s more kleptocracy rather than real change.
Democratic caucus mess is crying for an activist 4 Feb 2020 The party’s first test in Iowa to narrow the field of U.S. presidential candidates was a disaster. The confusing and undemocratic process aside, it couldn’t even deliver a result. If this were corporate America, a restive shareholder would quickly rattle the cage for change.
UK has scope to stop green halo becoming red face 4 Feb 2020 Boris Johnson sacked the president of a global climate summit due to be held in Glasgow this year. To make COP26 a success, the prime minister requires a new big-hitter to cudgel nations into emissions cuts. He’ll also have to spell out how Britain can hit its own ambitious goal.
Intesa will cope with weak economy test 4 Feb 2020 The $45 bln Italian bank reported healthy net profit for the fourth quarter. Its rich valuation means investors already reward CEO Carlo Messina’s focus on fees and big dividends. At least proceeds from a big sale provide a buffer against economic fragility in its home market.
Irish election fight ducks Brexit but victor won’t 4 Feb 2020 Prime Minister Leo Varadkar may be ousted at the weekend. The campaign has been dominated by housing and healthcare concerns and politicians of all stripes are responding with spending pledges. The winner will struggle to deliver unless Britain’s EU trade negotiations go well.
UK M&A machine lifts veil on dealmaking’s dangers 4 Feb 2020 Micro Focus released a brutal assessment of its disastrous $9 bln purchase of HP’s old software business, once called Autonomy. The lesson is that back office IT transitions can be decisive. That’s worrying for investors, who typically have no way to assess such humdrum details.
Oil swoon entrenches BP’s strategic quandary 4 Feb 2020 The UK oil major delivered decent 2019 results on CEO Bob Dudley’s last day. New broom Bernard Looney is taking over an improved balance sheet and a hiked dividend. But the virus-led crude price slump makes it harder for him to steer the group away from harmful carbon emissions.
Sony on the road to reclaiming its electronic mojo 4 Feb 2020 Quarterly operating profit fell 20%, to $2.8 bln, but exceeded expectations. Its image sensors used in iPhones helped and boss Kenichiro Yoshida is now eyeing autonomous cars. Wise investment could put the inventor of the Walkman and Trinitron TV back in the tech driver’s seat.
Carlsberg premium rating’s days are numbered 4 Feb 2020 The Danish brewer’s Chinese exposure means investors value it more highly than peers. But with the coronavirus shutting nightclubs and half of restaurants in the $22 bln group’s biggest market, that will change. Boss Cees ‘t Hart needs a plan B.
For Macau investors, all bets are off 4 Feb 2020 The territory is closing casinos for two weeks to contain the virus. Visits to Sands and rivals may be postponed, not lost, but only a real gambler would double down on Macau now. Home entertainment from the likes of iQiyi, China Literature or Perfect World offer better odds.
Epidemic impact will simulate China mini-recession 4 Feb 2020 The virus is eating into consumer spending. As restaurants lay off cooks and property developers default, local governments and banks will be stressed. Growth will stay positive, but for a generation that hasn’t experienced a downturn, this one might feel like the real thing.
Heat from Chinese e-cigarette IPO may burn 4 Feb 2020 Smoore sells battery-powered devices to the global tobacco giants. A backlash against the smokeless pastime will likely hit the company’s red-hot profitable growth. Its planned Hong Kong listing will test how much puff is left in global vaping valuations.
Sundar Pichai gives investors the A-B-Cs 3 Feb 2020 The new boss of Google’s parent Alphabet broke down fourth-quarter revenue for YouTube, cloud and other units for the first time. Growth disappointed but the transparency will help shareholders make better decisions. It also puts pressure on rivals like Facebook to do the same.
U.S. regulator deal policy is death by 1,000 cuts 3 Feb 2020 The FTC wants to stop the maker of Schick razors from buying Harry’s because it could stanch competition. That foretells trouble for deals like Google’s bid for Fitbit. Yet, T-Mobile US-Sprint was approved. Disruptors are complicated, but unpredictable policy isn’t an answer.
WeWork needs more than a new adult in the room 3 Feb 2020 Bringing in real-estate veteran Sandeep Mathrani as CEO is just one step in turning around the cash-guzzling shared-office-space firm. Ending past excesses, focusing on bigger clients and negotiating better deals would help show the firm is more than just an exuberant mistake.
EU offers Johnson a few crumbs in Brexit talks 3 Feb 2020 The bloc wants the United Kingdom to abide by its standards and state aid rules, and give up fishing rights, in return for a tariff-free trade deal. It’s hard to square with the prime minister’s goals. Yet Brussels has left some wiggle room. And Johnson has compromised before.
Beijing’s virus response leaves seeds of doubt 3 Feb 2020 China’s effort to contain the disease is tougher than most nations could manage, just as its top-down structure allowed its economy to grow fast. But a yes-man culture initially allowed the problem to spread. It’s one reason promises on market opening and such may be unreliable.
Private equity doublethink signals rude awakening 3 Feb 2020 Buyout bosses at last week’s confab in Cannes admitted deal valuations are too high, yet insist their returns will continue to beat listed stocks. That may be true for firms with niche sector expertise. Others will disappoint investors who pay the $2 trln industry’s high fees.
Cox: Who’s afraid of a President Bernie Sanders? 3 Feb 2020 The Vermont politician is set to win big in Iowa and may lead the Democratic fight against Donald Trump. His bark scares business types. But his actions are more nuanced, as a 1980s flashback to his time as mayor highlights. And, anyway, the Senate would curb his enthusiasm.
Worldline’s latest deal stretches payments fervour 3 Feb 2020 Less than two years after his last purchase, CEO Gilles Grapinet is offering $8.6 bln in cash and shares for French rival Ingenico. It creates the world’s fourth-biggest payments processor by revenue. Still, the rapid pursuit of scale risks leaving investors with dour returns.
Julius Baer CEO embraces bleaker wealth era 3 Feb 2020 Philipp Rickenbacher is calling a halt to the voracious asset gathering that fuelled the $11 bln Swiss group’s past growth. With negative interest rates, idle client cash can be a drag for private banks. Shifting focus to cost discipline is a necessary response to leaner times.
Bezos-Saudi spat has e-commerce proxy war 3 Feb 2020 Tensions between Riyadh and the Amazon boss may seem a stateside phenomenon. Yet Saudi Prince Mohammed bin Salman and Jeff Bezos have backed different horses in the battle for the $34 billion Middle East e-commerce market. That implies risks for both sides.