Jeep sale would leave Marchionne nowhere to hide 22 Aug 2017 The Fiat Chrysler CEO advocates using M&A to stop carmakers wasting precious capital. Selling the company's top brand to China's Great Wall - a long shot politically - might raise $23 bln. But it would leave an emaciated rump and set up Marchionne’s last lap to be a dismal one.
McDonald’s ain’t loving the local Indian recipe 22 Aug 2017 The U.S. burger chain is taking the nuclear option, shutting 169 stores as a spat with a partner boils over. It's one reason McDonald's has fallen behind rivals in a huge potential market. Partnerships are always vulnerable but India's byzantine legal system raises the stakes.
BHP uses commodity rally to fortify position 22 Aug 2017 The Anglo-Australian miner swung to an annual net profit of $5.9 bln. Plans to exit a troubled shale business and hold off on investing in potash chime with demands from Elliott, an activist hedge fund. The compromise, plus more focus on financial strength, looks sensible.
Three steps to an Infosys reboot 22 Aug 2017 The $31 bln Indian IT giant is in a mess after its CEO quit. To restore confidence, it needs fewer bosses and to find a strong outside CEO. Publishing a report into whistleblower claims would also help draw a line under a founder's complaints of mismanagement.
Fiat Chrysler would rev up China’s Great Wall 21 Aug 2017 The $19 bln Italian group has bid interest from the Chinese carmaker. Just as Geely’s takeover of Volvo helped it revamp designs, Great Wall could benefit from Fiat’s knowhow, especially at Jeep. But this could seriously stretch the buyer’s finances and management capacity.
Trading floors send hopeful signs on disruption 21 Aug 2017 Hong Kong’s bourse is closing its trading floor, the latest big exchange to do so. Globally, brokers in bright jackets have had a good run, given how little sense “open outcry” trading makes today. Nostalgia can protect some jobs from automation for a surprisingly long time.
China’s M&A controls trap firms in a warped market 21 Aug 2017 Officials have formalized guidelines curbing "irrational" purchases of foreign hotels, soccer clubs, film studios and so on. However, M&A is a small factor in China’s debt problem. Nor does this fix the margin-destroying distortions that encourage companies to venture overseas.
Unilever can butter up price for margarine unit 18 Aug 2017 Private equity consortiums are reported to be circling the Anglo-Dutch giant’s spreads business. A bidding war and the rich price paid for Reckitt’s food brands may help Unilever pocket more money. But unappetising returns await any buyer who pays more than 7 billion pounds.
Jack Ma’s MassMutual deal shows promise 18 Aug 2017 The Alibaba founder’s unit Yunfeng Financial is buying MassMutual’s Hong Kong arm. The $1.7 bln deal with the U.S. insurer helps turn Yunfeng into a broader financial group, by adding insurance and pensions operations. Once again, Ma is melding online and offline businesses.
Founders’ coup leaves a void at Infosys 18 Aug 2017 Vishal Sikka delivered three years of outsize returns. Now the Indian outsourcer's first professional CEO has resigned, against the board's wishes, after criticism from founder shareholders. Finding a solid outsider who can put up with the backseat driving will be challenging.
India’s e-tailers burn bright in festival season 18 Aug 2017 Amazon India and SoftBank-backed Flipkart are going head-to-head for the first time in India’s months-long shopping season. Both will offer massive discounts despite New Delhi's dislike of the practice. The challenge will be growing the customer base enough to justify the losses.
South Korea’s Moon, 100 days in, moves too slowly 18 Aug 2017 The president's bold plans to revitalise the economy are off to a slow start, even allowing for distractions from North Korea and Trump. Populist handouts to boost consumption are no substitute for reforming the family conglomerates that dilute the nation’s economic energy.
Rot spreads to Lenovo’s core 18 Aug 2017 Flat sales and rising costs in the Chinese group’s main PC unit pushed it to an unexpected quarterly loss. The $7 bln group is already struggling to turn around smartphone and server arms, while pushing into AI. Lenovo’s top priority now has to be fixing its core business.
Advertisers rise to VIP status for Alibaba 17 Aug 2017 The Chinese e-commerce group raked in over $7 bln of sales in the recent quarter, thanks to a surge in ad dollars. Marketing revenue already accounts for half of the total, and Alibaba is pushing hard to attract more top brands. These early efforts look promising.
China’s telco overhaul is oddly engineered 17 Aug 2017 State-backed China Unicom will get $11.7 bln, including from Tencent and other tech stars. Less encouragingly, this flagship “mixed-ownership reform” also includes public money. And the funds are going through another unit in Shanghai, effectively limiting influence by outsiders.
China takes misplaced pride in stock meddling 17 Aug 2017 China's securities regulator credits a crackdown on financial risk for rallying indexes, cutting volatility and rationalising prices. Thus, curbs on derivatives in place since 2015 have been lifted. Officials have learned worryingly little about moral hazard since the last crash.
Cathay’s ugly first half points to further woes 17 Aug 2017 Cathay Pacific has posted its worst half-year loss in at least two decades. Despite attempts to cut costs, the Hong Kong carrier is still locked into costly fuel hedging contracts and faces tough competition. Investors shouldn’t expect a return to profitability any time soon.
Tencent is biggest target in China cyber crackdown 16 Aug 2017 As Beijing's campaign to control content gathers pace, gaming giant Tencent, which delivered another set of strong quarterly results, is an easy target for censors. Its soaring market value, however, suggests investors have yet to factor in the risk to earnings.
Geely drives bumpy road toward global fame 16 Aug 2017 The firm that bought Volvo could become China’s first truly international carmaker. That hope, plus surging domestic sales, has sent shares in Geely's listed arm up over 230 pct in a year. But the lure of overseas glory could distract. This company needs to keep winning at home.
Chinese tech titans suffer credibility GAAP 16 Aug 2017 Online retailer JD generated quarterly profit of $144 mln. Apply conventional accounting practices, however, and it lost $42 mln. Alibaba also emphasizes figures that flatter by excluding stock-based pay. It widens a chasm with U.S. peers like Amazon that have kicked the habit.