Hadas: Profit flows freely, companies behave badly 25 Apr 2019 An IMF study shows a significant increase in companies’ pricing power since 2000 in developed economies. The trend in profitability is likely to bring less investment, more market-stifling mergers and more smugness from managers. Change requires a rethink of how competition works.
Invisible India exposes Uber’s growth dilemma 25 Apr 2019 The ride-hailing firm has retreated from China but the IPO prospectus mentions it twice as much as India. Uber has tried to check out of local food delivery. Now a top executive’s exit suggests the cash-sapping subcontinent’s future is far from certain.
Nomura’s star rainmakers face a drier spell 25 Apr 2019 The $13 bln bank’s Japanese advisory arm had a blowout year, a bright spot in otherwise dismal earnings, thanks to mandates for SoftBank and Takeda. Yet cost cuts abroad, uncertainty around deals like Toshiba Memory's IPO and an apparent snub by Japan Post could tarnish 2019.
Guest view: Halve Bank of Japan’s inflation target 26 Apr 2019 Consumer prices are rising more slowly than the central bank’s 2 percent goal. Aiming for 1 percent is acceptable in a country with a low jobless rate, Koichi Hamada, economic adviser to Prime Minister Shinzo Abe argues. Any resulting yen appreciation will be manageable.
Hyundai Motor’s U-turn may stutter in South Korea 25 Apr 2019 The $29 bln automaker's first quarter sparkled, good news after a loss the previous period. New models revved sales despite a slowdown in China and U.S. safety issues. Worsening economic conditions in its home market, however, could put this turnaround into a spin.
Belt and Road repairs fix only some potholes 25 Apr 2019 Beijing's gathering this week to promote its $1 trln-plus foreign policy push comes after a year of unprecedented troubles, from Pakistan to Malaysia. Under pressure, China has shown some welcome flexibility. But U.S. hostility is ramping up too; that’s far harder to pave over.
SoftBank’s easy credit doesn’t extend to Wirecard 24 Apr 2019 The Japanese group is putting $1 bln into the under-fire fintech firm. Unlike some of SoftBank’s flightier deals, this will be done with convertible debt. Wirecard gets validation from a respected backer, which gets a disruptor on the cheap without taking upfront equity risk.
Nissan earnings cut is one symptom of distraction 24 Apr 2019 The Japanese carmaker slashed its forecast annual operating income almost one third, a second cut in months. It blames warranty costs, weak sales, and the fracas over its ex-chairman. New woes make it harder for boss Hiroto Saikawa to steer through old ones.
China’s game makers face a shapeshifting boss 24 Apr 2019 New rules provide some clarity and point toward fewer and blander video-game titles after a freeze on approvals last year. That should be manageable for giants including the $475 bln Tencent. Yet the whims of a revamped regulator finding its feet still warrant a discount.
Singapore raises stakes for Macau casino permits 24 Apr 2019 Las Vegas Sands and Genting will invest some $7 bln and endure harsher rules to extend their duopoly in the city-state. Investors flinched, wiping $2 bln off shares. It increases the odds that the Chinese gambling hub will demand more onerous terms from Wynn, MGM, and rivals, too.
The Exchange: Marco Polo 2.0 23 Apr 2019 Italy irked the United States by backing Beijing’s grand infrastructure plan. The country needs to improve ties with the People’s Republic to sell more wine and other exports, says Rome’s top China expert. Overcoming trade barriers will, however, require an EU team effort.
China’s wannabe Starbucks brews a muddy IPO 23 Apr 2019 Luckin Coffee is rushing to deliver a New York listing before its business plan leaks. Its prospectus argues fair value doubled in three months, and an April round put the company’s worth at nearly $3 bln. Its money-losing model and murky corporate structure leave a bitter taste.
Auto giants convert Chinese rivals into clients 23 Apr 2019 Volkswagen and Toyota share a new strategy in the world’s largest car market. In addition to designing own-brand electric vehicles, they are letting other automakers use their technology. It could be a clever way to leverage economies of scale, and hedge against competitive risk.
Saudi Arabia will feel Trump’s Iran slap too 22 Apr 2019 The U.S. president will fully enforce sanctions on Tehran’s oil exports. Riyadh must pump more to prevent crude prices spiking further, which it has the scope to do. But doing Trump’s bidding will rankle OPEC peers. And the administration has a track record of changing its mind.
Viewsroom: ‘Game of Thrones’-style war heads to TV 18 Apr 2019 HBO’s hit series is ending as parent AT&T, Amazon, Apple and Walt Disney launch their claims to the streaming-video crown. Netflix, though, will be hard to usurp. Elsewhere, India’s weeks-long election gets underway. And global economic growth collides with nationalism’s rise.
Aramco sale would grease Mukesh Ambani’s tidy-up 18 Apr 2019 The Saudi oil giant is eyeing a stake in the energy assets of the tycoon’s $127 bln Reliance Industries. That would aid Aramco’s strategic ambitions. It would also mean India’s biggest listed group could keep expanding its consumer-to-oil businesses without adding too much debt.
TSMC’s new chips will leave Samsung in the dust 18 Apr 2019 Quarterly earnings at Taiwan’s $220 bln semiconductor maker fell 32 pct to $2 bln. However, cutting-edge technology means TSMC will benefit first as 5G handsets come into use and its South Korean rival will struggle to catch up. That justifies the rich valuation gap.
Terry Gou’s presidential hopes will rock Taiwan 18 Apr 2019 Citing support from a sea goddess, the Foxconn founder is running for the top job. Beijing links and a history of outsourcing to cheap mainland factories will be at issue, when the economy is weak. The campaign will also unsettle relations between Taipei, Washington and Beijing.
Indonesian election may change some investor votes 18 Apr 2019 Polls suggest Joko Widodo won another term, but with a narrow enough victory margin to embolden a belligerent opposition. There were pockets of populist success, too. That will temper hopes he’ll finally tackle energy subsidies and even rigid labour rules to woo foreign money.
Veteran Indian bank CEO pushes the limit 18 Apr 2019 Aditya Puri has been at the helm of the high-performing $90 bln HDFC Bank over two decades. He’s now nearing retirement age. Stunning returns favour a mooted rule change allowing him, and others, to stay on, but blowups elsewhere suggest timely succession may be better.