Britain brings the gloom to global defence party 13 Nov 2017 Shares in Ultra Electronics fell by almost a fifth after a profit warning due to UK project cancellations and delays. It is a rare sour spot in a sector that has rallied this year. With UK spending tight, mid-market defence groups might face foreign invasions of their own.
McKinsey needs to run a matrix on itself 10 Nov 2017 The consulting firm has been facing tough questions over hiring in Saudi, and work in South Africa. Neither helps its image. But more worrying is how data is making consulting a commodity. Doling out advice looks less valuable when one’s own business is struggling.
Review: The economic common good is hard to find 10 Nov 2017 Jean Tirole won the Nobel Prize for his work on regulating tricky industries. In “Economics for the Common Good” he takes on broader themes. Newcomers to current debates can learn from his general discussions, but the highlights are subtle descriptions of his area of expertise.
Altice turnaround hinges on credit given to Drahi 10 Nov 2017 The European cable group’s founder is retaking the reins after shares fell by a third in a week. Only the Patrick Drahi faithful will see more potential in the same strategy, while memories of a 2015 block sale to pay back loans at his holding company could keep others sceptical.
ECB haste risks slowing its bad-loan cleanup 10 Nov 2017 The central bank overstepped its authority with proposals to impose stricter rules on banks for non-performing loans, the EU’s parliament says. The ECB is right to target European lenders’ 840 billion euro mountain of bad debt, but its clumsy move may set back the effort.
China gives foreigners second swing at cash piñata 10 Nov 2017 Beijing is relaxing, and later eliminating, caps on foreign ownership of banks and brokerages. It's less a concession than an enticement. China could use help deleveraging its economy. And the $10 trillion in personal savings languishing in Chinese banks are worth competing for.
Mickey Mouse offers Sky investors an escape hatch 9 Nov 2017 Walt Disney has expressed interest in buying parts of Twenty-First Century Fox, including its 39 pct stake in the British TV group. That gives Sky shareholders another option if regulators block Fox’s 11.7 bln pound bid for full control. Disney may even be a more logical owner.
ProSieben is the worst show on a lousy channel 9 Nov 2017 The German broadcaster cut its full-year sales target and abandoned a TV-advertising forecast, sending shares down 11 percent. Management churn and an inability to predict the rate of its own decline makes the group more vulnerable than similarly-challenged European peers.
Cox: Lisbon turns Tatooine for tech Rebel Alliance 9 Nov 2017 If the internet world can be likened to Star Wars, its dominant companies are the Death Star – and EU competition enforcer Margrethe Vestager is Princess Leia. But the insurgents descending on Portugal's capital are mostly finding ways to live with, not overthrow, the empire.
Frumpy Commerzbank retains M&A allure 9 Nov 2017 Germany’s second-largest lender earned a pitiable 0.3 pct return on tangible equity in the first nine months of 2017. That explains why it trades at a fraction of book value. But rising customer numbers and hope of higher interest rates will continue to tempt potential buyers.
Burberry’s risky new look rules out missteps 9 Nov 2017 CEO Marco Gobbetti’s plans to take the UK brand upmarket mean no sales or operating margin growth until 2020. Investors who lopped 1 bln pounds off Burberry’s market value will now be unforgiving. Only perfect execution and the right new designer can prevent a further slide.
Peugeot swerves carmakers’ biggest dilemma 9 Nov 2017 PSA Group is targeting 1.7 billion euros of savings from its purchase of Opel without sackings or plant closures. Renault and Nissan show that’s plausible. Job cuts would make the deal more lucrative and will be hard to avoid across the industry with the rise of electric cars.
Cars are the last big headache for Tata 9 Nov 2017 Newish group Chairman Natarajan Chandrasekaran has moved swiftly, tying up loose ends in steel and telecoms and reducing cross-shareholdings. The money-losing Indian unit of the $21 bln Tata Motors may be the toughest challenge. Even here, there are signs of a turnaround.
UniCredit’s choice of new chairman is a good omen 8 Nov 2017 The Italian bank has sent a welcome signal by picking Fabrizio Saccomanni, a former finance minister and central bank official. It’s a break with the cronyism of the past that gave too little weight to banking expertise. The lender could do with more like him on its board.
Akzo Nobel-Axalta merger is a hostage to history 8 Nov 2017 A proposed blend of the two paint makers could produce colourful cost savings. That must mean job losses – and Akzo is the less efficient. Yet the $23 bln Dutch group deflected a bid from PPG saying cuts were a no-go. It’s hard to see how it could do the requisite U-turn now.
SSE and Innogy subtly unplug from UK households 8 Nov 2017 The British energy group is merging its retail unit with its German rival’s struggling UK arm. The new separately listed company should have lower costs and a better chance of turning around Innogy’s loss-making business. But tougher regulation could eat into the benefits.
M&S swaps comfort food for tougher diet 8 Nov 2017 The UK retailer will speed up closures of its clothes stores, aiming to move sales online. A fresh urgency addressing changing consumer habits bears the hallmark of Archie Norman, the new chairman. That’s all the more important with the usually reliable food business going off.
Qatar makes timely escape from Indian telecoms 8 Nov 2017 A decision to sell a $1.5 bln stake in Bharti Airtel may have been forced. The four-year investment nevertheless brings a decent return from a savaged industry. A price war could ease after recent consolidation, but India’s top operator faces more challenges from a bold upstart.
Intesa’s bank pruning carries a short-term sting 7 Nov 2017 Rescuing two beaten-down lenders dragged on the Italian bank’s bottom line in the third quarter. However, a 1.3 bln euro tax-free state fund will soak up the cost of branch closures and layoffs, while Intesa will keep the upside. It’s still an attractive trade-off for investors.
Banks walk on eggshells in post-MiFID II world 7 Nov 2017 An EU ban on providing free research comes into force on Jan. 3 next year. Instead of bundling the cost together with trading fees, lenders will have to charge separately. Breakingviews imagines how a bank’s compliance department might finesse the issue with clients come Jan. 4.