Australia

Afterpay zealots buy now and will pay later

25 February 2021

The $30 bln Aussie fintech champ reported more impressive growth as installment-plan purchases swell. A deal to buy out its U.S. business raises fresh valuation questions, however, as do bigger losses, PayPal’s entry and regulatory concerns. A reckoning for investors awaits.

Aussie jobs firm careers into a messy overhaul

24 February 2021

Shares in $8 bln Seek tanked 14% on plans to break in two, lose its founder-CEO and cut its prized stake in Zhaopin. At 14 times EBITDA, the sale values the Chinese unit in line with rivals but lower than Seek’s frothy multiple. Management and investors both deserve a bad review.

Aussie bank deal leaves rarity value on the table

22 February 2021

Four lenders dominate Down Under. That ought to mean the second tier has to dig deep for mergers that help them compete. Yet at $1 bln Bank of Queensland is paying just over book value for ME Bank. It’s a reality check for the other targets no matter how digital-savvy they are.

Crown Resorts raises Aussie governance stakes

19 February 2021

The $5 bln casino operator just lost one gaming licence and another is now threatened by a new regulatory probe. A board shakeup should help its case, but director candidates are in short supply. The usual suspects fill too many seats: Crown Chair Helen Coonan is a prime example.

Facebook and Google flaunt dominance Down Under

18 February 2021

The social network blocked news in Australia in defiance of Canberra’s effort to make it pay publishers. The search titan’s deals with Rupert Murdoch’s empire and others may protect it from wider oversight. Government and media have only chipped off fragments of Big Tech’s clout.

Aussie banks balance above topsy-turvy economy

18 February 2021

ANZ is the latest of the big-four lenders to post good earnings. Australia’s pandemic management has helped, but a mix of low interest rates, underemployment and a housing boom could spell trouble down the line. They are wisely keeping higher capital buffers largely in place.

Capital Calls: Tribune, Shopify

17 February 2021

Concise views on global finance in the Covid-19 era: Chicago Tribune sells to a hedge fund known for stripping out newsroom costs; Shopify’s strong year doesn’t shield it from competition.

Rio can use sunny outlook to mend leaky roof

17 February 2021

Jakob Stausholm’s first results benefitted from soaring iron ore prices, allowing the global miner’s new CEO to hike dividends. But he has a messy situation in Mongolia to resolve, and governance issues. Better to spend time and money fixing these than on splashy new deals.

Capital Calls: Super Bowl, Poison pills, Experian

8 February 2021

Concise views on global finance in the Covid-19 era: America’s game doesn’t benefit from scarcity value; Cubic’s poison pill serves a purpose; And Brazil’s cyberattack has a price for Experian.

BHP’s dual-listing dilemma gets ESG nudge

3 February 2021

The spread between the $160 bln miner’s Aussie and UK shares is at its highest since 2011. Tax perks mean the equity Down Under should trade at a premium, but distaste for fossil fuels among British funds is helping widen the gap. It’s time to reconsider collapsing the structure.

Viewsroom: Short squeeze craziness, Oz in the lead

28 January 2021

Something completely wacky is happening with GameStop and a few other stocks favored by short sellers, and it’s likely to end very poorly for some armchair traders, Breakingviews columnists discuss. Plus, a visit to our Melbourne bureau for tennis and Google lessons. 

Naturgy offers cut-price route to green transition

26 January 2021

IFM is spending 5 bln euros on 23% of the Spanish utility. Naturgy’s depressed shares and the Australian fund’s use of debt will juice its returns. Moreover, it’s a cheaper way of surfing the renewable energy wave than boarding rivals like Iberdrola.

Google threat demands that Australia find allies

22 January 2021

The tech titan says it’ll disable search Down Under if Canberra enacts a law forcing it to pay media companies for news. It goes to show how much clout $1.3 trln parent Alphabet thinks it has. Such corporate dominance suggests global regulators may have to put up a united front.

Australia commits unforced tennis error

22 January 2021

Foreign players are flying in for the Grand Slam tournament even as strict pandemic policies have left citizens struggling to get home. Stars like Novak Djokovic complaining about quarantine don’t help. Flimsy economic considerations may be distorting risk assessments.

New Rio Tinto boss has Mongolian bullet to bite

18 January 2021

Atop Jakob Stausholm’s to-do list is sorting out the miner’s troubled $10 bln Oyu Tolgoi copper project. Satisfying Ulaanbaatar, pushy hedge funds and minority shareholders at once will be impossible. Raising equity and reworking a sticky loan structure are the least-bad options.

Stock rewards for all would be valued virus legacy

29 December 2020

Woolworths pared manager bonuses so that over 100,000 employees could get a little slice of equity in the Aussie supermarket chain. More companies should follow suit. What’s good for Silicon Valley and Wall Street is good for everyone, starting with frontline pandemic workers.

Ominous iron ore seam opens in Aussie trade row

18 December 2020

Chinese state buyers are griping about how the steel ingredient is priced as officials Down Under debate an export tax. Beijing already has targeted wine and other imports. The idea that miners BHP and Rio might get dragged into the spat can no longer be discounted.

Rio’s new CEO reflects its lack of wiggle room

17 December 2020

Finance director Jakob Stausholm is the surprise choice to lead the $126 bln miner. Rio’s self-imposed difficulties in Mongolia and Australia meant an outsider might have been preferable. But given Rio may feel the need to soon replace its chairman, continuity is also important.

Rio Tinto’s CEO search just got even harder

10 December 2020

A scathing government report over the Australian miner’s destruction of Aboriginal sites calls for sweeping changes. It portends a long slog to repair the $120 bln company’s reputation. Corporate governance and climate issues add to the daunting challenges concerning growth.

Australian pension giant braves steep M&A curve

9 December 2020

New Zealand infrastructure investor Infratil snubbed a $3.8 bln takeover bid from AustralianSuper. Its first solo acquisition target enjoys a solid negotiating position and Goldman on defence. For this to be more than a learning experience, it will have to dig deeper.