Chipmaker M&A exhibits increasingly fuzzy logic 29 Jan 2018 Amid a rash of big deals, Japanese firm Renesas may offer close to $20 bln for U.S. rival Maxim, CNBC reported. Combining the two could generate big savings – but Renesas would need to cut 100 pct of Maxim’s operating expenses to justify that price. That’s called overpayment.
Beware the Davos bubble’s dubious emissions 29 Jan 2018 Each January, the Swiss mountain gathering provides a snapshot of elite thinking. Often it proves to be wide of the mark. This year the global economy, Italy’s election, the importance of crypto-currencies and Saudi reform produced what may be the surest examples of groupthink.
Australia’s CBA makes a brazen CEO choice 29 Jan 2018 The country’s top lender picked retail head Matt Comyn as chief, despite a money-laundering scandal in his unit. Investors seem sanguine and CBA’s board argues the bank would be hard for an outsider to master quickly. Even so, the lack of accountability is disappointing.
Trump reworks “America First” for the global elite 26 Jan 2018 For the finale of the World Economic Forum, the U.S. president laid out in unexpectedly statesmanlike fashion how favouring the interests of his citizens could benefit the rest of the world. The demand for reciprocity remains, but the inclusive-sounding vision is an improvement.
China’s finance watchdogs best off in same kennel 26 Jan 2018 A mooted merger of the troubled insurance commission and its banking counterpart would reduce risk. Similar unions work well elsewhere. This could help pave the way for a “super-regulator”, perhaps led by bank tsar Guo Shuqing. Further judicious consolidation would be healthy.
Super-voting stock returns a split-ticket 26 Jan 2018 Senior officials from Credit Suisse, BlackRock, Bain Capital and PCCW Media squared off about Hong Kong moving to open the door to dual-class share structures. It'll invite more listings, they told a Breakingviews Predictions event, but the implications are many and varied.
Review: Shaking up Singapore’s ivory tower elites 26 Jan 2018 The city-state has fostered prosperity and stability. Yet as the fourth generation of leaders prepares to choose a new prime minister, a timely book from academic Cherian George presents a helpful to-do list. Broadening the political talent pool should be right at the very top.
The Exchange: Dual-class dueling 25 Jan 2018 Hong Kong’s plan to welcome super-voting stock weakens corporate governance, but its appeal to Chinese tech companies also may be exaggerated. Officials from Credit Suisse, BlackRock, PCCW Media and Bain Capital debated the upcoming changes at a recent Breakingviews event.
Viewsroom: Trump solar tax is more burn than balm 25 Jan 2018 The U.S. president seems to be trying to right past trade wrongs. But business has long since moved on, meaning tariffs on washing machines and solar panels will do more harm than good. Also, Merkel and Modi disappoint in snow-ravaged Davos. Plus: Spotify’s Wall Street snub.
Xi Jinping wannabes flub their lines at Davos 25 Jan 2018 Leaders including Emmanuel Macron of France and Germany’s Angela Merkel predictably spoke up for global cooperation ahead of Donald Trump’s finale. Unlike the Chinese president last year, however, their rhetoric fell flat. Competition for investment further muddles the message.
Romer exit flags World Bank’s human capital limits 25 Jan 2018 The academic known for his work on economic growth is leaving the bank after just 15 months. The attempt to shake up a staid institution fits his theories’ emphasis on new ideas. But his brash manner shows how organisations can be less than the sum of their inputs.
Small-town gamblers lend Macau casinos time 25 Jan 2018 Rising wealth in the Chinese hinterlands is driving a new cohort of players to the world’s largest gambling hub. They’ve helped boost revenues at casino operators like Wynn and Sands. This new mass market will help Macau’s gaming-centric economic model stay at the table longer.
Guest view: Japanese maverick bucks ROE revolution 25 Jan 2018 Just as corporate Japan starts to take return on equity seriously, a famed entrepreneur is headed off-course. Rakuten’s push into mobile under boss Hiroshi Mikitani will destroy shareholder wealth and shows up another supine Japanese board, argues investor Kisalaya Singh.
Uber plan highlights SoftBank’s addiction to debt 25 Jan 2018 The Japanese group might raise funds by borrowing against its shares in the U.S. ride-hailing app, or in British chip designer ARM, a report says. That’s plausible: SoftBank prefers maximum financial firepower. Extra layers of leverage will introduce fresh complexity and risk.
Hadas: Carillion and the danger of low prices 24 Jan 2018 Debt-heavy UK contractor Carillion collapsed because it wasn’t charging enough. Uber can keep distorting taxi markets with loss-making fares until its backers lose hope. And Amazon’s cross-division support unfairly harms competitors. Cheap prices can cause expensive trouble.
Banks have new reasons to fear digital disruption 24 Jan 2018 Wannabe fintech disruptors are out in force at Davos. Regulation and poor returns helped protect big lenders up to now. Renewed interest in financial services from the likes of Amazon and Apple poses a bigger threat. Banks will need to either join forces or partner with Big Tech.
Mnuchin opens door to new era of currency wars 24 Jan 2018 The U.S. Treasury secretary said a weaker dollar was good for his country in some ways. True, but the break with what his predecessors have asserted since 1995 raises the risk the greenback will be used as a trade weapon. That would be bad news for foreign holders of U.S. debt.
Perfect storm blows ill winds across Chinese tech 24 Jan 2018 Hubris, margin loans and starry-eyed investors have led to a cash crunch at $9 bln Leshi. The video-streaming and smart-TV arm of embattled LeEco is now chasing its founder, "China's Steve Jobs," for money he owes it. Bad behaviours that converged here will turn up elsewhere too.
Chinese gadget-maker IPO tracks Xiaomi hype 24 Jan 2018 Huami, China's answer to Fitbit, is aiming to go public ahead of a blockbuster share sale by the handset maker. It just turned a profit, thanks to growth powered by cosy ties to Xiaomi. Western hardware companies have disappointed investors, but they also didn't have an X factor.
Make in India clashes with America First in Davos 23 Jan 2018 Narendra Modi and Donald Trump share strongman characteristics and both have a zero-sum approach to trade. The Indian premier needs to boost manufacturing just as the U.S. president wants to do the same. The Asian nation has the most to lose if it fails to realise its vision.