Rio Tinto board can choose CEO – at expense of ESG 10 Sep 2020 Many shareholders want harsher punishments for the mining giant’s destruction of Aboriginal heritage sites. Robust returns are one reason to stop short of axing boss Jean-Sebastien Jacques. If he stays, though, Rio’s responsible investing credentials will be deeply discounted.
Fintech payment pioneers face war on two fronts 3 Sep 2020 Afterpay’s shares fell 10% after PayPal said it would offer a “buy now pay later” product. Unlike the Australian group, the U.S. money transfer giant is giving its version for free. Competition will aggravate the regulatory risk Afterpay and Swedish rival Klarna already face.
Aussie finance scandal offers universal truths 3 Sep 2020 Storied wealth management giant AMP put itself on the block days after Chairman David Murray quit over the promotion of an executive accused of sexual harassment. The firm has been lurching from problem to problem for years. Fixing culture and regaining trust is hard to do.
BHP selfishly brushes up green credentials 18 Aug 2020 Surging iron ore sales cushioned declines in other commodities as annual earnings fell 4% to $9 bln. Boss Mike Henry plans to ditch some high-polluting energy assets, albeit for economic, not environmental, motives. Regardless, a cleaner portfolio makes business sense.
China’s economic recovery looks squiggle-shaped 30 Jul 2020 Budweiser, KFC and Rio Tinto point to reviving sales in beer, fried chicken and steel. Industrial profit is up too. But the rebound is unevenly distributed across sectors and regions, and employers are still shedding jobs. As pent-up demand is sated, the optimism might fade.
Crisis forces Australia and China closer 21 Jul 2020 Despite diplomatic tension, miners BHP and Rio are cashing in on Beijing's infrastructure stimulus. Supply disruptions in Brazil and weak global demand have left the two trading partners even more dependent on each other. Politics can’t change facts under the ground.
Qantas charts choppy path for Bain’s Aussie flight 26 Jun 2020 The U.S. buyout shop beat out rival bids for bankrupt Virgin Australia. There’s haggling to do with creditors and others before the sums are known. At the same time, Qantas is raising $940 mln and plans to axe 20% of its workforce in a fresh sign of the brutal challenges ahead.
Virgin Australia suitors strain to soar like TPG 22 Jun 2020 Buyout shop Bain and hedgie Cyrus are jostling to buy the carrier out of bankruptcy. The industry has foiled everyone from Warren Buffett to Gordon Gekko. David Bonderman’s TPG is one of the few with happy tales to tell. Replicating its success will require some fancy flying.
Stimulus blunder Down Under sends Big Data alert 25 May 2020 Australia overfunded an $85 bln wage subsidy programme due to excessively pessimistic epidemic models and data entry errors. Canberra thought 6.5 mln workers needed help, nearly twice the real number. Others will find it similarly difficult to cut through the noise.
Sino-Australian DNA sequenced by virus-test deal 11 May 2020 Fortescue’s chairman helped broker a controversial Canberra purchase of 10 mln Covid-19 kits from Chinese genomics giant BGI. It adds to diplomatic tensions over Huawei and the pandemic’s origins. And yet over $150 bln of bilateral trade probably will endure, and maybe even grow.
Corona Capital: SPAC reversal, Italy, Toilet paper 8 May 2020 Concise views on the pandemic’s corporate and financial fallout: Dan Loeb’s blank-check company tries to nix a deal; Italians warily get back to work; Australian TP panic subsides.
Cards played well in three-handed casino deal 29 Apr 2020 Blackstone is buying 10% of Australia’s Crown Resorts from Lawrence Ho’s Melco. The buyout shop antes up at a discount while the Macau operator sensibly folds a busted bet. And amid a crisis, Crown gets staked by a shrewd backer. It may take time, though, for the pot to grow.
Australia Inc reruns its crisis capital playbook 27 Apr 2020 Lender NAB will raise $2.2 bln in the biggest local equity issuance since the pandemic began. Just as in 2008, the country is weathering the disruption better than most. Companies Down Under are shrewdly restocking coffers, but often at the expense of retail investors.
Virgin Australia could struggle to regain altitude 21 Apr 2020 The carrier has gone into administration with over $3 bln of debt after a bailout failed to materialise. Australia is loath to leave Qantas a monopoly, which should help spur a solution, maybe with local pension funds. Remaking Virgin into a success is a different story, though.
Spurned Caltex can do some refining on its own 21 Apr 2020 Canada’s Couche-Tard abandoned its $5.5 bln plan to buy and break up the petrol station operator because of the pandemic. The Australian company’s mooted property spinoff looks like a poor consolation prize. It would make more sense just to proceed with the suitor’s blueprint.
Bad news could travel fast for Facebook and Google 20 Apr 2020 Australia is forcing the tech goliaths to share revenue with local media. The virus was the last straw after years of digital destruction and fake news scandals. Whatever the financial formula, the costs should be bearable. The trouble is that Canberra headlines will go global.
Treasury Wine’s posh-plonk split calls for a toast 9 Apr 2020 The $5 bln Australian winemaker could spin off its prized Penfolds business. That should deliver a higher valuation for the upmarket label and separate it from a ragbag of other brands that need restructuring. A coronavirus-induced glut of luxury grapes will eventually help, too.
M&A protectionists get even stronger cover 1 Apr 2020 All foreign takeover bids will now be subject to review in Australia, shielding local companies from a recovering China and beyond. As anti-globalisation rises, other countries might retrench similarly. That could make it harder for the capital-hungry and encourage oligopolies.
Australia fuels global race to flatten jobs curve 1 Apr 2020 Prime Minister Scott Morrison proposes spending some $80 bln subsidising wages for six months. That would cover about 70% of median pay for most and equal 6.5% of GDP. Increasingly generous pandemic stimulus measures in one country ultimately could help workers in another.
World will be ready for some 2021 Olympic spirit 24 Mar 2020 It’s likely the Summer Games won’t go on as planned in Tokyo. Cancelling would be a defeat, but rescheduling for next year a symbol of resilience. By then, an economic recovery should hopefully be under way and global audiences will be drawn more than ever to the Olympic flame.