Australia

Miners can close the confidence gap in 2019

16 January 2019

Stock markets point to a rough year for diggers, valuing each dollar of expected cash at a stubbornly hefty discount. Investors are fretting about a Chinese slowdown and don’t trust cashed-up bosses at Rio, BHP and the like to restrain themselves. The reality may be brighter.

Expect a Macquarie 50th anniversary deal

28 December 2018

The Aussie financial conglomerate has routinely embarked on strategy-shifting acquisitions, including asset management and energy trading, since it began in 1969. Local banks are hurting now. Buying one will be new boss Shemara Wikramanayake’s half-century gift to shareholders.

Apax may have clicked on $1.8 bln Kiwi bargain

13 December 2018

The buyout group has won a rare New Zealand bid battle, buying Trade Me, a mix of Craigslist and eBay. That's fair, for a local champion with little debt and chunky margins. Apax has similar assets elsewhere, too. Only Amazon's looming spectre should unsettle.

Miners’ digging rush is a chance to show restraint

10 December 2018

Exploration, which stalled as prices crumbled after 2011, is back. Speculation over Rio Tinto’s drilling in Australia’s Great Sandy Desert, for example, has sent rivals on a copper-hunting frenzy. With deals scarce, such moves make sense, so long as the diggers stay disciplined.

Smarting Aussie lenders brace for Banking 2.0

30 November 2018

Commonwealth Bank of Australia and other top institutions have been battered by an inquiry that has wiped some $39 bln off their market value in 2018. As nine months of theatrics wind down, investors can expect five major changes, including tighter credit and tougher punishments.

SAP-Qualtrics deal may be mutually good experience

12 November 2018

Rather than go public the U.S. customer and employee feedback outfit is selling to the German giant for $8 bln, over $3 bln more than IPO expectations. Though it casts aside the Qualtrics founders’ desire for control, it could still be a smart long-term choice for both companies.

New Tesla chair will have to get tougher

8 November 2018

Robyn Denholm, CFO at Aussie telco Telstra, is moving from her boardroom seat at the $60 bln electric-car maker to the head of the table to oversee erratic CEO Elon Musk full-time. Splitting the top jobs is good, but Denholm has been part of a group unable to rein him in so far.

Australia’s CKI veto scrambles the China message

8 November 2018

Canberra is set to block the $9.4 bln takeover of its biggest gas pipeline company by an arm of Hong Kong's CK Hutchison. APA shares have lagged, hinting at some risk. Timing the news to coincide with a much-vaunted trip to repair ties with Beijing, though, looks careless.

Macquarie widens gap at home and abroad

2 November 2018

The $28 bln Aussie bank is set for a record year, thanks to a first-half lift from commodities. Return on equity stands apart and local lenders are under intense scrutiny. New boss Shemara Wikramanayake will need to keep up the impressive resilience in far choppier markets.

ANZ sets flat tone for contrite Aussie banks

31 October 2018

The $52 bln lender has reported a 5 pct drop in full-year earnings, hit by clean-up costs. Given regulatory heat, it could have been worse. Yet bank shares remain pricey. That suggests pain ahead as a boom, fed by a rosy economy, household debt and pricing power, winds down.

Hostile buyer may lose at Hong Kong hide-and-seek

26 October 2018

Private equity firm PAG is trying to bypass a property owner’s management with its takeover bid. Local conventions make it hard to track down Spring REIT’s many small investors and there are restrictions on contacting them directly. It’s time to rewrite the rules of the game.

The Exchange: Kevin Rudd

23 October 2018

Australia's prime minister in 2008 told Breakingviews how his government decided to spend some 6 pct of GDP on tax breaks, infrastructure and cash payments to citizens. That helped the country heavily exposed to China, commodities, finance and housing avoid a recession – just.

Cooled coal IPO singes commodities exuberance

22 October 2018

Private equity-backed Coronado shrunk a $1 bln share sale Down Under to just $550 mln and priced it at the bottom of the range. A rosy comparison to Rio Tinto’s recent asset sales came up short. And it is the latest sign of shakier prospects for steel and China demand.

Copper caught in crossfire of trade war

4 October 2018

Escalating tensions between Washington and Beijing have helped drag down the red metal by some 14 pct since June. The price is now well below levels required to inspire mining giants to invest in new supply, even though existing pits are ageing fast and green demand is on a tear.

BHP can hide behind Unilever dual-listing mutiny

2 October 2018

Some big shareholders oppose the Dove soap maker’s plan to switch to one, Dutch, headquarters. Pushy investor Elliott has been calling for a similar corporate overhaul at the world’s largest miner. There are differences, but the campaign for simplicity just got more complicated.

Barrick and Randgold wisely explore M&A riches

24 September 2018

The $12 bln Canadian miner led by former Goldman banker John Thornton is set to unite with its African-focused rival. A deal this big would shake up a sector long cowed by past mistakes. Given weaker prices, falling output and a geographic fit between the two, the idea has logic.

Aussie office bid war offers easy investor exit

19 September 2018

U.S. private equity giant Blackstone is fighting with a Canadian pension fund over $3 bln of Australian commercial property. The market has boomed but Investa, the target, has underperformed of late. The ensuing rally gives shareholders a chance to relocate at a nice premium.

Australia’s $11 bln telco deal dials up high hopes

30 August 2018

TPG Telecom and the Vodafone Hutchison joint venture are coming together. The merger reduces chances of a price war and the market is implying hefty synergies can be achieved. It should ease Vodafone’s exit and even rival Telstra may come out ahead.

Australian politicians play with economic fire

24 August 2018

Malcolm Turnbull has been forced out, ushering in the country's sixth prime minister in a decade. Political turmoil contrasts with 27 years of unbroken growth. But reforms are hard to implement and voters are disgruntled. The economy’s immunity to upheaval in Canberra is waning.

Australia’s Huawei ban undercuts “Made in China”

23 August 2018

Security and political concerns prompted Canberra to block the telecom titan from backing the country’s 5G network. It’s a setback for Huawei, but also for Beijing. The world-beating national champions it wants to cultivate are increasingly seen as dangerous arms of the state.