Beware the Davos bubble’s dubious emissions 29 Jan 2018 Each January, the Swiss mountain gathering provides a snapshot of elite thinking. Often it proves to be wide of the mark. This year the global economy, Italy’s election, the importance of crypto-currencies and Saudi reform produced what may be the surest examples of groupthink.
Xi Jinping wannabes flub their lines at Davos 25 Jan 2018 Leaders including Emmanuel Macron of France and Germany’s Angela Merkel predictably spoke up for global cooperation ahead of Donald Trump’s finale. Unlike the Chinese president last year, however, their rhetoric fell flat. Competition for investment further muddles the message.
Suez public sector blowback makes for sorry trend 24 Jan 2018 Shares in the French water group fell 16 percent after a profit warning. Utility-like groups with long-term public contracts typically enjoy a low cost of capital. But having governments as clients is no safeguard, as Veolia and Carillion have already shown.
Carrefour picks right rescue plan five years late 23 Jan 2018 After two profit warnings, the new boss of Europe’s largest retailer will invest 3 bln euros to fend off online competition, and pledged to cut costs. A partnership with Tencent may help its ailing China unit. But sweeping change will be tough, and Carrefour is far behind rivals.
Nestlé fashions a more activist-friendly board 19 Jan 2018 The CEOs of Zara-owner Inditex and Adidas are among the Swiss giant’s proposed new heavyweight non-executives. Their e-commerce expertise will help steer efforts to sell more directly to consumers. They also pre-empt any move by activist Dan Loeb to install his own candidates.
Aramco IPO beggars needn’t feel like losers 19 Jan 2018 BAML, UBS and Barclays have missed the cut to be global coordinators on the Saudi oil giant’s mega-listing, Reuters reports. Forgoing big fees from a $100 billion IPO will be cause for garment rending. Then again Saudi is a risky client and the process is replete with uncertainty.
Guest view: Market rocket fuel will run out 18 Jan 2018 Investors are pushing up U.S. equities with little regard for an array of warning signals, writes former Citibank executive William Rhodes. The Federal Reserve is running out of time to warn them about their “irrational exuberance” before a probable market correction this year.
Vivendi’s Italian media journey hits roadblock 18 Jan 2018 The French media group run by Vincent Bolloré will have to redraft a venture between its pay-TV business and Telecom Italia, which it controls. Regulators and independent directors objected. Bolloré needs to make a clear case for his strategy of combining content and telecoms.
Carrefour’s bad news will come in threes 17 Jan 2018 Europe’s biggest retailer issued a second profit warning in five months on weaker sales. New CEO Alexandre Bompard will unveil his turnaround plan next week. With a need to ramp up online investment and cut back on hypermarket stores, notably in France, greater pain is to come.
Hadas: Malthus, Condorcet and “shithole” economics 17 Jan 2018 The English curate was totally wrong about permanent poverty, but the legacy of his grim expectations still clouds judgments. His lesser-known French rival was a better guide. Condorcet would have expected the recent progress in countries the U.S. president seems to despise.
Corporate loans can propel Europe’s bank recovery 15 Jan 2018 Lending to companies has seen minimal growth in recent years, official data shows. A raft of positive economic data should provide the catalyst for increased demand. It would be a welcome way for slimmed-down lenders to give revenue a leg-up.
Markets start doing Mario Draghi’s job for him 12 Jan 2018 The euro hit three-year highs and government bond yields rose after a hint the ECB boss may rethink how long ultra-loose policy will last. The moves amount to tighter monetary conditions. That buys rate-setters time to phase out negative rates even though growth is picking up.
Puma spinoff helps Kering’s race-fitness 11 Jan 2018 Gucci’s parent will hand investors most of its stake in the German sports label, a distribution worth 3.5 bln euros. Offloading the lower-end brand should boost the 52 bln euro luxury group’s value. Kering may even be able to leave behind its traditional discount to rival LVMH.
Drahi U-turn makes Altice’s problems easier to see 9 Jan 2018 Patrick Drahi is spinning off his cable group’s U.S. unit, raiding it for 900 million euros, and re-organising a struggling European business. The new structure will show whether he is doing enough to tackle slow growth, high debt, and a questionable content strategy.
Anti-euro debate rears its head in Italy 5 Jan 2018 Northern League leader Matteo Salvini has reiterated his opposition to the single currency. Growing Italian discontent with the EU could make an anti-euro stance a vote-winner in upcoming elections. Despite Europe’s economic revival, monetary union remains a political target.
Electric cars will catch up with gas guzzlers 5 Jan 2018 Plans to ban dirty vehicles are stoking investment in clean transport, driving down costs. Consumers could find battery power as cheap as combustion engines for the first time in 2018. But it will be harder to drive up profitability. Automakers will struggle as margins tighten.
Oil bulls look to Trump rather than Iran protests 4 Jan 2018 A tightening global balance of supply and demand for crude means geopolitical shocks could push up prices. Anti-government protests in Iran seem unlikely to disrupt production. A looming U.S. decision on whether to revisit sanctions could have a bigger impact.
Germany will follow money in EU top jobs carve-up 4 Jan 2018 Jockeying to replace the region’s most powerful people, including European Central Bank boss Mario Draghi, will begin in earnest in 2018. Proposed new posts like a euro zone finance minister complicate the contest. Berlin will prefer control of purse strings to interest rates.
European soccer’s spending splurge will intensify 29 Dec 2017 Transfer fees like the $263 mln Paris St Germain paid Barcelona for Neymar have stoked talk of a bubble. But increased spending is mostly justified by the soaring value of broadcasting rights. If U.S. tech giants join the action in 2018, players will reap the benefits.
Bank clients will learn the value of data in 2018 28 Dec 2017 New EU regulations will force lenders to share account information with competitors - subject to savers’ consent. Up to two-fifths of banks’ revenue could be at stake. New entrants will need to overcome privacy concerns. Even so, customers will discover what their data is worth.