Bank of England rate hike has dismal logic 2 Nov 2017 The first increase in UK interest rates for a decade is no grounds for celebration. Rather, it’s an admission that Brexit has permanently lowered the country’s growth prospects. Governor Mark Carney must worry about inflation and a weak currency. The rest is up to politicians.
Axalta is a chip in DowDuPont’s paintwork 2 Nov 2017 Activist Nelson Peltz once pilloried chemicals giant DuPont for selling its coatings business to private equity. He was right. Axalta is now weighing a merger with Akzo Nobel. With a bit more love, it might have given investors in what’s now DowDuPont a 29 percent annual return.
Cox: Saudi crown prince revealed his magic number 2 Nov 2017 It's not a sum of money, but a year: 1979. Mohammed bin Salman's promise to return the kingdom to the more moderate society that prevailed before the siege of the Grand Mosque is a watershed moment. Global investors can play a role in helping the Saudis modernize.
Belt-tightening gives Tidjane Thiam breathing room 2 Nov 2017 The Credit Suisse boss delivered an 80 pct jump in third-quarter pre-tax profit despite lower revenue. An activist seeking to break up the Swiss lender can point to a misfiring investment bank. But cost-cutting and higher wealth management earnings give Thiam the upper hand.
Shell and BP stuck incinerating shareholder value 2 Nov 2017 After years adjusting to cheap oil, Shell and BP are beating earnings estimates and throwing off enough cash to cover dividends. BP will soon be buying back shares, too. It’s a start. But even if prices hold up, it will be years before their returns top their cost of capital.
BT leaves decisive dividend call on hold 2 Nov 2017 The UK telecoms group kept its interim payout flat and raised the prospect of investment in pricey full-fibre networks. Increasing the dividend while pleasing regulators may prove tricky. But ducking the trade-off for now means shareholders will have to dial up the uncertainty.
Booming metal markets test mettle of memories 2 Nov 2017 The frenzy over electric cars is helping push copper, nickel and cobalt prices to their highest in years. An expected supply squeeze is also a factor. After frolicking in London this week, global miners get a shot to prove they've learned from cycles past and can use cash wisely.
BT’s dividend signal faces interference 1 Nov 2017 The British telco has pledged to keep lifting payouts to shareholders despite the burden of pension payments, rising capex and sports rights. Dividends could suck up almost all its free cash over the next three years. A 6 percent yield suggests investors think it’s at risk.
Dubai demonstrates the distance ahead of Saudi 1 Nov 2017 The UAE’s most populous emirate has become a global financial hub thanks to a diversified economy and tolerance of Western culture. Now Dubai is pushing a green agenda. The kingdom can learn much from its smaller neighbor, including its imperfections, as it tries to catch up.
StanChart has yet to reward shareholders’ patience 1 Nov 2017 Resurgence is proving more difficult than recovery for the emerging market lender. Chief Executive Bill Winters has returned it to profitability, but is struggling to boost income faster than costs. Still-low returns make restarting meaningful dividends a distant prospect.
Vivendi can unlock more time to stalk Ubisoft 1 Nov 2017 French laws may soon force the media conglomerate chaired by Vincent Bolloré to decide whether to bid for the 7 bln euro video-games group. He has more choices than putting up or shutting up. Vivendi can duck the decision by converting part of its stake into non-voting stock.
Complacency is biggest risk for Facebook investors 31 Oct 2017 Mark Zuckerberg’s firm set new highs even as it said nearly half of American voters may have seen Russian propaganda on its site. The fallout from fake content could hit its runaway value, but investors can’t be bothered as long as advertisers keep flocking to the social network.
UK student loan sale has costly Corbyn hedge 31 Oct 2017 Britain is pushing ahead with the sale of 4 bln pounds of loans, despite Labour leader Jeremy Corbyn’s promise to ease student debt. Investors will get compensation from a complex scheme if government policy changes. That further strains the logic of the sale.
Burberry can lose kid gloves along with Bailey 31 Oct 2017 Designer Christopher Bailey is leaving the British fashion brand after 17 years. It has taken the company three years to unpick the deferential 2014 decision to hand him the CEO role. His exit gives new boss Marco Gobbetti a freer hand to implement much-needed turnaround plans.
BNP Paribas earns benefit of capital doubt 31 Oct 2017 A drop in trading profit failed to do much damage at the French bank, which reported an impressive 11.6 pct return on tangible equity in the third quarter. Beating its own return targets, even though they’re modest, should help dispel perennial questions over BNP’s capital level.
WPP woes cement Mad Men bargain-basement valuation 31 Oct 2017 The group may cut targets for the third time this year. Advertising firms are grappling with frugal customers and online sales. Investors rate them as lowly as media dinosaurs like newspaper sellers. M&A options look tricky. Their best bet is to hope clients start spending again.
UniCredit NPL glitch muddies Italian bank cleanup 31 Oct 2017 The ECB is reportedly examining whether the bank inflated the price of a $21 bln bad-loan sale, a move that could hurt its capital. It’s surprising as UniCredit’s valuations were less rosy than peers. Regulatory confusion gives lenders more reason to cling on to dud loans.
Twin tailwinds help Ryanair weather pilot crisis 31 Oct 2017 The 20 bln euro no-frills airline will meet its full-year profit goal despite a rostering mess that cost it thousands of flights. Passenger numbers were up 11 pct in the six months to September. Ryanair’s fare cuts helped, but it also got lucky with rivals’ bankruptcies.
Sony’s success may delay further disentangling web 31 Oct 2017 The Japanese group riding high on Spider-Man is also thriving in games, chips and music. It now expects annual operating profit to hit a record $5.6 bln. That's testament to a long overhaul, but also increases a temptation to stay in areas like phones, TVs and financial services.
Glencore’s Hong Kong exit sends message to Aramco 31 Oct 2017 The secondary listing touted as a gateway to Chinese investors during the miner's 2011 IPO never lived up to the hype. The same goes for Coach and others, who could be forgiven for following Glencore out. It's also a good sign the Saudi oil titan can cross Hong Kong off its list.