Companies & Funds

P&G’s innovation drive could use a boost

19 October 2018

Healthy consumers helped the consumer-goods giant report strong sales. Even its troubled razor business has sharpened up a little. P&G is following activist Nelson Peltz’s advice and trying new things. With costs rising and pricing power weak, it can’t afford to slacken the pace.

Facebook hires one weapon for two-handed fight

19 October 2018

Nick Clegg, former UK deputy PM, will lead global affairs at the $450 bln social network. His anti-Brexit stance and EU background could help with tribulations in Brussels. But he’s an odd choice to deal with Washington, where scrutiny may intensify after the midterm elections.

Spanish bank tax hit not as scary as it looks

19 October 2018

Shares in Spanish lenders dropped sharply after a court ruled banks may have to refund mortgage taxes. That could mean a collective hit to earnings of up to 1.5 bln euros, based on the last four years of new loans. With lending rates set to rise, that’s painful but manageable.

ABB belatedly succumbs to industrial revolution

19 October 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.

Nigeria bank reform offers olive branch for MTN

19 October 2018

The continent’s most populous nation has invited telecom groups to launch mobile payment services. South African operator MTN could be a big winner. The prospect of a lucrative new market gives it a good reason to end its $10 billion dividend and tax feud with the government.

Movie-themed casino IPO sticks to messy script

19 October 2018

Macau-based Studio City, part of Lawrence Ho’s $9 bln gambling empire, made a stellar New York debut with a 24 pct pop. The listing provides some needed capital and could help existing minority investors eventually stage an exit. It also features Melco’s costly complex structure.

China needs shadow bankers to unclog growth

19 October 2018

The economy expanded only 6.5 pct last quarter, missing expectations. The campaign to quash financial risk is squeezing private companies, and exhorting banks to lend more won’t cut it over the long run. It’s time to let unconventional credit play a bigger role.

Holding: Company babysitters get deserved spanking

18 October 2018

The U.S. Justice Department will cut back on hiring monitors for corporate wrongdoers. Trusted to keep Citi, Apple and others in line, these super-nannies often turn into meddlers fond of excessive oversight and fees. Policing business misconduct is too important to outsource.

Viewsroom: Saudi fiasco sets Wall Street ablaze

18 October 2018

Bankers and officials have ditched a huge Saudi shindig after Turkey accused the kingdom of killing a prominent journalist – but big deal fees and oil reserves make the kingdom hard to shun. Breakingviews columnists discuss the financial ramifications of the diplomatic crisis.

Bond investors add fuel for Uber’s profit bonfire

18 October 2018

The ride-hailing company has tapped the junk market for $2 bln, even though it generates no EBITDA from which to pay interest. Investors are betting either that Uber will turn a profit – or more likely, that its dash for growth will lure future investors who can pay them back.

Blackstone’s $1 trln goal needs some protection

18 October 2018

Steve Schwarzman’s outfit hopes insurers can help double its assets by 2026. Its credit funds offer the higher yields the industry is dying for, while steady fees might boost Blackstone’s valuation. The trick is to persuade risk-averse insurers that a buyout firm is a good home.

Unilever and Nestlé’s growth tests pricing power

18 October 2018

Higher prices helped the consumer goods giants boost revenue in the third quarter. Both need to keep charging more to offset rising costs. The risk is that price-conscious customers go elsewhere. It ultimately depends on whether the world economy can cope with higher inflation.

Wall Street offers no relief to European rivals

18 October 2018

On average, U.S. investment banks reported a 7 percent jump in equities revenue in the third quarter, while fixed income trading declined. If results from European peers follow the same trend, top-line growth will be minimal. That leaves more cost cutting to boost dreary returns.

SAP margin crunch comes with a silver lining

18 October 2018

The 120 bln euro software group’s results disappointed, with its operating margin declining. Yet that’s because its cloud computing unit is outgrowing the older, more profitable business. If that continues it will mean more stable revenues, faster growth, and a higher valuation.

TSMC can withstand a worsening trade storm

18 October 2018

The $200 bln Taiwanese chipmaker’s quarterly profit only dipped 1 pct in a tough market. U.S.-China tensions loom, but next-generation semiconductors are helping cushion the blow. Unlike fellow Apple supplier Foxconn, TSMC is also less vulnerable to customers moving production.

#MeToo has room to spread in India Inc

18 October 2018

Companies are rushing to improve practices after a wave of harassment allegations from film stars and journalists. That’s welcome: implausibly few complaints are reported. Where New Delhi has been relatively silent, firms can set the tone. It will help retain more talent too.

The sick man of Southeast Asia faces ill winds

18 October 2018

Thailand fared better than its neighbours in recent market ructions. Yet the ossified $460 bln economy is held back by an ageing population, poor education and high household debt. With an interest rate hike and a contentious poll ahead, there will be even fewer reasons to cheer.

China’s wink at punters hints at intervention

18 October 2018

Top officials are being trotted out to reassure investors after a near-25 pct stock slump this year. "Spring" is not far off, they say; a deleveraging campaign is already on hold. This is all in Beijing’s playbook: if markets keep falling, more active policy support comes next.

Finance makes Apple and Google forced friends

17 October 2018

Steve Jobs once wanted to destroy Google for copying the iPhone. The company he founded is now dependent on the search engine and its parent Alphabet for around 10 pct of its profit. The growth of mobile search and the market for secondhand phones will bind the two even tighter.

Dollar Tree proves money doesn’t grow on mergers

17 October 2018

The $20 bln U.S. ultra-discount chain has lost a quarter of its value in nine months. That’s despite winning a fight to acquire Family Dollar in 2015 and beating merger cost-cut targets. Now activist Carl Icahn may be buying shares. Deals only buy time for struggling retailers.