Considered View

Jakarta is in a bind over interest rates

27 April 2018

Indonesian stocks are sliding alongside the rupiah, as higher U.S. yields prompt investors to sell out. But growth is tepid in Southeast Asia’s largest economy and an election looms. So the central bank is unlikely to follow through on talk of a hike, unless conditions worsen.

Australian hospitals operator given LBO lifeline

27 April 2018

An unwanted $3.1 bln offer values Healthscope only a bit higher than its 2014 IPO price. The deal is also being led by the same buyout executive who bought and sold the company for TPG. Healthy skepticism is warranted, but there's a chance to be discharged without further injury.

Baidu’s revival adds speed to China’s AI race

26 April 2018

Quarterly earnings at China’s search giant topped $1 bln, trouncing expectations. Sales at its listed video arm, iQiyi, also jumped. Baidu may have been eclipsed by rivals like Alibaba, yet progress in autonomous driving is giving it an early lead in tech's next battlefield.

Microsoft is designated driver of the tech world

26 April 2018

The tech giant is vying with Amazon to be the planet’s second-biggest firm by market value, at around $730 billion. Microsoft looks dull, but the predictability of its earnings under Satya Nadella has helped its shares outperform Apple, Alphabet and Facebook.

SoftBank-backed fintech slaps on smart M&A patch

26 April 2018

Online lender Kabbage is buying analytics firm Orchard, whose investors include Wall Street chiefs Vikram Pandit and John Mack. The deal is more about adding data than revenue, but that shows fintech lenders are starting to put profit and customer retention ahead of rapid growth.

Decline is comfortable for U.S. asset managers

26 April 2018

Volatility isn’t rescuing listed money managers: most had fresh asset outflows in the first quarter. Yet the industry’s high margins, a clamp on expenses and growth in areas like so-called target-date funds kept profit flowing. The sector’s erosion is mercifully glacial.

Amazon is getting bigger, but also heavier

26 April 2018

Jeff Bezos’s firm made $51 bln in quarterly revenue. Sales have more than doubled in five years, but it’s taking more fixed assets to get there. Amazon now uses property and such with less efficiency than Walmart – just as its more traditional rival tries to go the other way.

Mario Draghi struggles to ditch post-crisis policy

26 April 2018

Euro-zone growth is slowing before the European Central Bank boss can end asset purchases or join the Fed’s Jerome Powell in raising rates. One-off factors may be to blame now but a downturn is inevitable. Unusual policy will be the norm rather than the aberration in Europe.

WeWork junk-bond investors enable a contradiction

26 April 2018

The trendy shared-office outfit is the latest firm with heady prospects and huge cash burn to tap credit markets. Like Uber, Tesla and Netflix, WeWork needs funds for expansion to justify its valuation. Yet the healthy cash flow creditors prefer may only come with slower growth.

ConocoPhillips shows way on cash discipline

26 April 2018

Higher oil prices are fortifying Big Oil’s finances, as the U.S. producer’s earnings confirm. CEOs have to balance buying new assets, beefing up balance sheets, and paying cash out to shareholders. Wasteful opportunities abound, and Conoco’s measured approach is worth mimicking.