Australia

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.

Rare-earth bid reverts Aussie conglomerate to type

26 March 2019

After spinning off supermarkets and selling coal, $27 bln Wesfarmers is back adding to its sprawl with a $1.1 bln offer to buy Lynas. The attraction of owning the only major producer of speciality ingredients outside China is clear, but the financial and strategic cases less so.

Australia can defy economic gravity for longer

22 March 2019

After nearly three decades of growth Down Under, there are fresh signs of sputtering. Fourth-quarter GDP grew just 0.2 pct, house prices are falling and wages only inching up. There are reasons for optimism, though. Canberra’s spending power, for one, can keep momentum going.

KKR left to recount beans in Australian deal

7 March 2019

The $1.4 bln buyout of accounting software developer MYOB was all but in the books. Now a hedge fund owning 10 pct is unexpectedly demanding a much higher price. With KKR sitting on a one-fifth stake and the broader stock market turning up, the numbers may be harder to reconcile.

Rio Tinto lays bare the mining paradox of plenty

27 February 2019

Including a special payout, the digger led by Jean-Sébastien Jacques returned a whopping $13.5 bln to shareholders last year. Despite Rio's ample cash, risks are rising and safety problems like Vale’s will lift costs. That should keep the industry's growth ambitions in check.

China coal curbs blow diplomatic smog Down Under

22 February 2019

At least one big port has put a lid on Australian imports, Reuters says. Beijing has used such tactics in the past to reduce stockpiles and support domestic prices. But denting a top export earner for Canberra will be seen as a message too, when ties are already under strain.

Storms won’t keep Qantas from higher flight path

21 February 2019

Australia's flag carrier said fuel costs pulled first-half earnings down by nearly a fifth to $559 mln. Domestic business proved resilient, though; its fleet and balance sheet are in good shape too. Choppy weather lies ahead, but Qantas looks sturdier than higher-valued rivals.

BHP sets judicious pace for big diggers

19 February 2019

Two fires and a runaway train smudged first-half profit at the world's largest miner. BHP cut debt to below its target and said it is eyeing $9 bln in free cash in the year to June, at current commodity prices. But CEO Andrew Mackenzie kept the tone cautious and spending flat.

Aussie watchdogs bark as economy starts to bite

18 February 2019

A spate of tough decisions on banks and other oligopolies augurs an era of stricter regulation. The broad inquiry into financial misdeeds helped spur an overdue crackdown. It's also a new risk for boards and investors as a long, stable growth streak Down Under looks vulnerable.

Viewsroom: Down Under’s upheaval

14 February 2019

Falling house prices and slowing Chinese growth are putting Australia’s record of almost 28 years of economic expansion at risk. The banking industry got dinged after a gripping year-long investigation. And a change of government looks likely. Breakingviews dives into the issues.