Australia

RBS turnaround boss can repeat trick Down Under

19 July 2019

Ross McEwan has been named CEO of National Australia Bank, the lender worst hit by a bruising inquiry into misconduct. He's a welcome arrival at a low point. But he'll need to draw on his Edinburgh nous to rebuild trust and overhaul the group, as the economy cools.

Rio sounds copper warning from Mongolian steppe

16 July 2019

The miner's flagship Oyu Tolgoi expansion will be up to 30 months late, and could cost as much as a third more than planned. It’s a fresh blow to a project that has been bruised by local politics. The latest snag is a reminder of why the red metal has become so hard to dig up.

Potash makes better sense for BHP than shale

20 June 2019

The miner is weighing whether to press ahead with a $20 bln Canadian project, its most significant investment in years. BHP shareholders, scarred from past blunders, are understandably wary. There may be a case, though, that potash will be more like iron ore than fracked oil.

Iron ore complicates Australia’s growth challenge

12 June 2019

The rising price of the steel ingredient has yet to boost investment in mining, or wages. But it is making the local dollar more resilient to trade tensions and a rate cut. That means the economy, expanding at its slowest annual rate in a decade, is even harder to revive.

Rare earths expose the trouble with next-gen M&A

6 June 2019

Beijing's threat to squeeze sales of the minerals has boosted $1.3 bln Lynas, one of few non-Chinese producers. That’s a blow for suitor Wesfarmers. It's also a reminder of how limited targets and opaque prices have challenged corporate heavyweights looking to tap new metals.

Thrice-ditched Aussie telco has its work cut out

5 June 2019

Swedish fund EQT has dropped its toppy $2.3 bln bid for Vocus after due diligence. Shares dropped 20%. It’s the third financial buyer to walk since 2017. It casts doubt on the target’s efforts to integrate deals. New boss Kevin Russell has to find a way to dial up confidence.

Aussie rate cut demands fiscal backup

4 June 2019

The RBA trimmed its benchmark interest rate to a record low 1.25% from 1.5%. Another chop is expected, which would bring closer the limits of conventional monetary policy. It puts the onus on Scott Morrison’s government to loosen purse strings and avoid mistakes made elsewhere.

Macau mogul picks up Crown jewels for a song

30 May 2019

Lawrence Ho is buying 20% of his former partner’s Australian casino operator for $1.2 bln, less than rival Wynn earlier indicated it might pay. A bet Down Under could play well for the New York-listed group but James Packer’s partial exit is a raw deal for other shareholders.

Aussie telco buyout exhibits fibre-optic fever

28 May 2019

Sweden’s EQT has offered to buy Vocus for $2.3 bln, a 35% premium to its undisturbed price and far higher than 2017 bids from KKR and Affinity. The price reflects hype around fancy fibre networks, which may not last. Shareholders will be grateful for the opportunity to exit.

Mother Earth loses the Australian election

20 May 2019

Prime Minister Scott Morrison's coalition held power over a Labor party that campaigned on climate change and was tipped to win for over a year. Some wealthy seats backed the cause, but most voters were alarmed at the economic cost. It’s a bad sign for the world from Down Under.

Mourned Aussie prime minister raises ballot bar

17 May 2019

Bob Hawke, dead at 89, floated the currency, boosted trade and broadly opened the country. Though his eight-year tenure ended in 1991 as Australia slid into recession, there hasn’t been one since. His legacy looms large as voters go to polls this weekend, amid a cooling economy.

Aussie election campaign blows hot air on climate

10 May 2019

It’s a rare place where voters have put the environment atop the list of their ballot priorities. The $1.3 trln economy is among the most vulnerable to global warming, but also depends on coal. Unfortunately, neither of the two main parties is tackling the contradiction head-on.

Blocked Aussie deal is sign of antitrust times

8 May 2019

Competition authorities Down Under torpedoed the $11 bln merger of TPG Telecom and Vodafone's local venture. Combining the smaller operators might have created a stronger challenger, but cheaper prices are no longer enough. Such aggressive oversight may become more common.

Qantas captain flies into risky tenure territory

8 May 2019

Alan Joyce agreed to serve as CEO of the $6 bln Aussie airline for another three years. He’s young and has led an impressive turnaround over the past decade, but problems often pile up for bosses who stick around too long. Succession should be atop the Qantas board’s to-do list.

Macquarie can keep its edge over Wall Street

3 May 2019

The first full-year results under Shemara Wikramanayake included an impressive 18 pct return on equity. Macquarie cautions things may cool off, but commodities and infrastructure are hot, and play to its strengths. Trading at some 2.5 times book value means expectations are high.

Nippon Paint buys pricey pot of Aussie gloss

17 April 2019

The Japanese brand is paying $2.7 bln for DuluxGroup, sending its Australian peer’s shares to record highs. The hefty premium reflects a shortage of targets and the buyer’s eagerness for expansion. Given a cooling economy Down Under, it may have been better to keep the brush dry.

Australia’s Crown could be Plan B for Japan losers

12 April 2019

James Packer’s $6 bln casino operator is effectively up for sale after Wynn submitted an offer and then ended talks. Crown would be a decent option for rivals that don’t win a licence in Osaka or Nagoya. The likes of Galaxy, Genting or Melco may yet train their sights Down Under.

Wynn splurges on a new beginning Down Under

9 April 2019

The casino giant wants to buy Australia’s Crown Resorts for $7 bln. Both companies are on the rebound after break-ups with billionaire bosses Steve Wynn and James Packer, and seeking fresh starts. But a hefty 26 pct premium bets too many chips on the return of big spenders.

UK web rules will speed internet’s balkanisation

8 April 2019

The government may fine groups like Facebook – and senior managers – who fail to police harmful content. This adds teeth to lame social-media regulation, but also creates a UK-specific standard. As other states beef up local regulations, web groups’ margins will feel the squeeze.

KKR plays weaker cards well Down Under

3 April 2019

The stakes got high in its $1.4 bln buyout of Australian software developer MYOB after a U.S. hedge fund pressed for a better price. It made a reasonable case holding a potential blocking stake, but KKR stood pat and the pushy investor folded. Seasoned gamblers are hard to bluff.