Companies will be first line of U.S. virus defense 26 Feb 2020 The White House is downplaying the spread of the coronavirus, perhaps to calm markets. If there’s an outbreak, it may be up to CEOs to make calls that would hurt the economy, like closing factories. It would follow the trend of firms stepping up where government has left a void.
Apple scores another unwanted first on China 26 Feb 2020 After sounding the alarm earlier than peers on the impact of coronavirus on manufacturing, the $1.3 trln iPhone maker just got a clear warning from shareholders on human rights. CEO Tim Cook has kept divergent stakeholders onside pretty successfully, but that’s becoming harder.
Rio Tinto’s green pivot suffers by new comparisons 26 Feb 2020 The miner wants carbon emissions to be net zero by 2050. That’s good, but unlike BP’s recent goal it doesn’t include CO2 produced by customers. A post-virus stimulus from Beijing will be a boon to the China-dependent Rio, but could strengthen the case for greener credentials.
Hong Kong applies Band-Aids to virus-related ills 26 Feb 2020 The city rolled out a $15 bln support package as it lurches into recession. Employers get more than workers, but there are handouts for all. It’s a move in the right direction for a notoriously tight-fisted government. It may soon need stronger financial medicine, however.
Nio’s $1.4 bln lifeline may pave a smoother road 26 Feb 2020 The cash-strapped U.S.-listed Chinese electric-car maker is close to securing funding from a municipal government in Anhui. Similar past agreements have failed to materialise but this one, with official ties, is a more promising immediate and longer-term pillar of support.
South Korea could spend more on picking itself up 26 Feb 2020 The central bank is expected to cut rates 25 bps to 1%, a record low, but that will have muted impact if consumers stay at home on virus fears and more. Low government debt gives President Moon Jae-in space to deliver a bold spending plan including tax breaks and income support.
Super-app M&A would be sign of more rational times 25 Feb 2020 A mooted merger of Gojek and Grab could create a $23 bln Southeast Asian food-delivery-to-ride-hailing giant. Strategic investors are still keen to write cheques, but easy money from SoftBank and others is drying up fast. Consolidation is the best path to continued rapid growth.
Unizo check-in borders on being inhospitable 25 Feb 2020 Bids for the Japanese hotelier have reached $1.9 bln, and could go even higher. The company is already loaded with debt, meaning that any buyout will require some serious housekeeping to generate a solid return. Blackstone, Lone Star or Fortress may be sweating their equity.
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.
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.
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%.
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.
Kirin fight taps into Japan’s tolerance for change 19 Feb 2020 A pushy investor makes a persuasive case for the $18 bln brewer to improve governance and ditch pharma and beauty holdings. The company offered a weaker board shakeup and pay-plan revision. In a country renowned for corporate rigidity, the sops could prevail in a proxy battle.
TSMC sits uncomfortably on U.S.-China tech fence 19 Feb 2020 The $280 bln Taiwanese company has benefitted from being everyone’s friendly chipmaker. Now the White House is mulling curbs targeting TSMC’s business with China’s Huawei. The financial hit looks manageable, but rising political pressure to pick sides will be a bigger threat.
HSBC investors are a step ahead of the interim CEO 18 Feb 2020 Noel Quinn is aiming for a return on tangible equity of up to 12% in 2022. He plans to get there by axing $4.5 bln in costs and better allocating capital. For all the upheaval, the shares already imply a similar level of profitability. The main risk now will be missing the mark.
Apple jars investors into coronavirus realities 18 Feb 2020 The iPhone maker warned quarterly sales would miss earlier guidance as Chinese consumers and supply chains seize up. Corporate caution thus far has been shrugged off in the markets. The tech titan should help inject greater appreciation for the outbreak’s serious ripple effects.