China gives Trump cheap trade trinkets 9 Mar 2017 China looks to have fast-tracked the U.S. president's trademark applications, and its economy is going his way too. U.S. imports shot up 38 pct last month, and the yuan has firmed. There's less to the data than meets the eye, and the trademarks are trouble.
Suez’s $3.4 bln GE deal just holds water 8 Mar 2017 The French company is paying a higher multiple for General Electric’s H2O unit than recent takeovers even though its target has lower margins. And promised revenue synergies look meager. Cost cuts and a global need for water infrastructure, though, should help this deal flow.
White House’s cold shoulder slows economic agenda 8 Mar 2017 GE executive David Nason has withdrawn from the running to head bank supervision at the Fed. Trump officials declined to offer support after critics noted his Treasury bailout role during the 2008 crisis. Other qualified people may also think twice about joining the new regime.
Do-nothing UK budget belies big risks ahead 8 Mar 2017 Finance Minister Philip Hammond revealed minimal changes to tax and spending. His prudent message makes sense, but contrasts with the large and unpredictable economic consequences of leaving the European Union. It won’t take much for these to knock deficit reduction off course.
Obamacare repeal to test Trump negotiating chops 8 Mar 2017 The new GOP healthcare plan has been condemned by party conservatives and moderates as well as industry groups. The president is embarking on a charm offensive to woo doubters. His performance will have implications for other policy pushes, like tax reform and a fiscal stimulus.
Aramco IPO has limited destination choices 8 Mar 2017 Every global exchange would love to host the Saudi oil titan's shares. A Breakingviews analysis weighing market, political and other forces suggests New York is most attractive and Tokyo a top wild-card. Aramco's sheer size and importance mean finance fundamentals come first.
Adidas has the speed, now for the destination 8 Mar 2017 The sports brand shows how quickly fortunes in the consumer goods industry can turn. Better products and marketing are boosting sales. Profit is up too, but margins are still trailing Nike’s by a mile. Closing that gap will be the ultimate test for new boss Kasper Rorsted.
Stinky Chinese M&A leaves investors flush 8 Mar 2017 Two directors at Yingde Gases want a police probe into the chairman. All three plan to sell their shares to a buyout firm touting a $1.5 bln takeover. U.S. rival Air Products may offer more. It is a bizarre example of bad governance working out well for independent shareholders.
U.S. tech sanctions will rattle China’s firewall 8 Mar 2017 ZTE will plead guilty for violating U.S. trade curbs. The charges could have been more severe and an $892 mln fine is manageable. More powerful is the message it sends that the U.S. is prepared to take action against Chinese companies to rein in the likes of Iran and North Korea.
Board diversity is good use of passive voice 7 Mar 2017 Women in the boardroom can improve performance, but U.S. companies have been slow to adapt. State Street, where three of 11 directors are female, is threatening proxy fights if companies don't widen their gender horizons. It's a smart way for quieter fund managers to get pushy.
New York bank deal caps post-election euphoria 7 Mar 2017 Sterling Bancorp lost 5 pct of its market value even though cost cuts should cover the premium it's paying for rival Astoria. The $2.2 bln price bakes in the buyer's plan to swiftly triple its target’s poor returns, leaving no room for error. Even giddy investors can see that.
Even flawed UPS trustbusters beat none at all 7 Mar 2017 Brussels has egg on its face after a court overturned its 2013 decision to block the U.S. parcel delivery outfit's merger with TNT. Europe rarely nixes deals, and occasional errors are inevitable. A bigger threat to M&A is protectionism, which requires far less serious analysis.
Big Oil drills through White House policy crust 7 Mar 2017 Energy industry bosses, including Exxon's, kicked off their annual Houston hootenanny with reassuring words about the environment and free trade. They notably clashed with the new administration's climate-change and border-tax positions. Global market forces will be hard to move.
New U.S. healthcare plan is in critical condition 7 Mar 2017 After deriding Obamacare for years, Republicans have rolled out an alternative afflicted with financial and political problems. It would worsen insurance-exchange woes, raise costs for many Americans and weaken Medicare. The prognosis from Washington and Wall Street is dire.
Citi dips cautious toe in China bond pool 7 Mar 2017 The U.S. bank will include Chinese bonds in existing emerging market indexes - the first major provider to do so. This is a victory for Beijing, which has struggled to lure foreign investors. It’s a low-risk diplomatic win for Citi, as the sums involved are probably small.
Virtual-reality hype fades, 3D printing solidifies 6 Mar 2017 Tepid sales, legal questions, immature technology and a chicken-and-egg problem are putting dreams of immersive digital worlds on the back shelf. Meanwhile, steady progress is burning away disillusionment over digital manufacturing to order, as a Ford initiative makes clear.
Holding: Alphabet-Uber collision dents tech ethos 6 Mar 2017 Silicon Valley broadly, and especially the former Google, thrived more by sharing than suing. A legal brawl between its Waymo outfit and the $70 bln ride-hailing service over driverless-car secrets may signal a sharp turn. Open cultures would fade far in the rearview mirror.
Nationality of Vauxhall’s owner is a red herring 6 Mar 2017 The sale of GM’s European operations to French carmaker PSA Group has caused fresh concern over its plants in the UK. Yet irrespective of the owner, the key risk for automotive jobs in Britain is Brexit. A stronger Peugeot may even have more patience with Vauxhall than GM.
Deutsche Bank gives itself a chance of revival 6 Mar 2017 The German lender is to raise 10 bln euros, chiefly via a rights issue and a part-IPO of its funds arm. Assuming slimmed-down revenue can then grow, there’s a path to hit a 10 pct return goal in the medium term. But the fragile investment bank will need to do the heavy lifting.
Peugeot’s Opel deal shows shrewd engineering 6 Mar 2017 At a price of 1.8 bln euros, the French carmaker should get a good return from GM’s European business. The U.S. auto group lacked sufficient size to run Opel and Vauxhall efficiently. By taking PSA warrants, GM also gets insurance against appearing to have sold too cheaply.