Nomura’s messy quarter begs for faster tidy-up 31 Jan 2019 An estimated $120 mln fee from SoftBank bolstered the broker’s earnings but failed to offset abysmal performance across wholesale, retail and asset management divisions. Job cuts and improved incentives are steps in the right direction, but thin padding against tough markets.
Foxconn’s U.S. debacle offers an economics lesson 31 Jan 2019 The iPhone maker and Wisconsin taxpayers made a $10 bln bet on a manufacturing revival in the United States. Now Terry Gou's outfit says making flat screens there is uncompetitive, and jobs will be in research and design. It's a reality check for Donald Trump's industrial dream.
Sinochem’s backtrack sends a fresh IPO warning 31 Jan 2019 The Chinese chemicals and oil giant has paused plans to float its refining and trading unit in Hong Kong. Beijing’s behemoths once listed regardless of market conditions, thanks to government-backed peers. The $2 bln U-turn should worry hopefuls without state support.
Hadas: An ultra-tax on the ultra-rich makes sense 30 Jan 2019 Some U.S. politicians want to extract much more money from the topmost sliver of the population. This would amount to collecting an underpaid social debt and restoring a tarnished social contract, without much economic risk. And higher taxes now might prevent a revolution later.
Alibaba powers on with small things 30 Jan 2019 Quarterly sales grew 41 pct, the weakest pace in three years. But there’s still momentum in Jack Ma’s retail juggernaut. China’s wider slowdown has been marked by tepid demand for big-ticket items like iPhones. Everyday purchases like groceries and apparel are propelling Alibaba.
Xinjiang is an extreme case of China’s growth woes 30 Jan 2019 Beijing is trying to de-radicalise its Uighur minority in giant camps. Officials call them vocational training centres, but mass detentions are not helping investment or jobs. As provinces cut 2019 targets, the region is becoming an acute example of widespread capital retreat.
India’s competitive populism sets ugly fiscal path 30 Jan 2019 Congress party chief Rahul Gandhi is promising voters a minimum basic income of sorts, on top of a pledge to waive farm loans across the country. That would blow a hole in the budget. With an election close, it also puts pressure on Narendra Modi’s government to respond in kind.
Thruppence: Who wins by sponsoring UK book prize? 29 Jan 2019 Man Group has ended its support for the UK’s prestigious Booker award. The hedge fund decided there were worthier recipients of its 1.6 mln pound annual cheque. Luckily for aspiring authors, Breakingviews columnists have a handy shortlist of those who could step into the breach.
The Exchange: Joseph Tsai 29 Jan 2019 Alibaba’s co-founder and executive vice chairman joins Breakingviews to reveal what the future holds for the $400 billion tech giant. As investors fret over economic uncertainties, Tsai also tackles the recent fallout from Huawei, a bruising trade war and the case for tax cuts.
Europe’s telcos have 20 bln reasons to love Huawei 29 Jan 2019 Ditching the Chinese supplier could push up costs for the region’s carriers, and knock 7 pct off their market value. Politicians may deem that a price worth paying to ensure the security of mobile networks. Yet slow-growing, debt-heavy telcos hardly need another cash flow hit.
China’s next stimulus plan looks to the tax man 29 Jan 2019 Caterpillar’s cooler mainland sales are a reminder of Beijing's reluctance to build its way out of trouble. Monetary policy remains cautious too. A lower fiscal burden is the alternative way of encouraging companies to invest, even if local government finances suffer.
Venezuela teaches China a crude diplomatic lesson 29 Jan 2019 Beijing has poured over $50 bln into the oil producer over the past decade, making Caracas a top recipient of its largesse. That bet is now caught in upheaval and sanctions. Worse, the loans have sustained a regime that is battering the very interests it was supposed to serve.
U.S. Huawei charges test trade deal appetite 28 Jan 2019 The Justice Department indicted the Chinese telecom firm for fraud just before crucial U.S.-Chinese talks on tariffs. Presidents Trump and Xi are already facing choppy markets and a slowing economy. Their reaction to Huawei will show if they truly want to avert a trade war.
The end of gasoline-powered cars is nigh. Soonish. 28 Jan 2019 Sales of electric vehicles doubled last year while the overall market stagnated. China and California led the charge. The internal combustion engine still dominates, but demographics, governance and economics suggest that dynamic is not far from breaking hard.
Cox: Cannabis and impeachment on readers’ minds 28 Jan 2019 When asked which investment would outperform in 2019, participants at our Predictions events around the world chose Canadian weed stocks most over other assets. Most also put the chance of Congress impeaching Trump at 30 pct or higher. Consider some other surprising results.
Chinese markets may wait longer for bold changes 28 Jan 2019 The head of the nation’s securities regulator was replaced over the weekend. Liu Shiyu was more pragmatic than ambitious, an approach that achieved mixed results. His successor, ICBC Chairman Yi Huiman, hardly seems like the type to take big steps like reforming the IPO process.
Asahi gives fuller meaning to beer premiumisation 28 Jan 2019 The Japanese brewer is adding iconic London Pride to Peroni and Grolsch in its cooler. Paying a sudsy 24 times EBITDA for Fuller’s beer signifies the need for upscale and craft ales to keep up with liquor rivals. Cheap money should help make the deal go down easier for Asahi.
Review: The hollowing out of white-collar work 25 Jan 2019 New technologies and international trade have been disrupting jobs for some time. Now automation and global competition will do the same thing to Western services industries, Richard Baldwin argues in “The Globotics Upheaval”. Dysfunctional democracies are ill-prepared to cope.
Downbeat Davos is still short on introspection 25 Jan 2019 Corporate and political leaders in the Swiss resort fretted about slowing economies, angry citizens, and clashes over technology. The gloom contrasted with last year’s misplaced optimism. Yet delegates remain bafflingly confident about their ability to predict what’s next.
China outlook from Davos goes a little off-piste 25 Jan 2019 A sharper slowdown is high on the list of worries at the economic retreat. George Soros warns a Cold War with the country could turn hot. For now, China’s growth is merely cooling and Beijing has ammunition left. Its Alpine promise of "modest prosperity" may be feasible.