Companies & Funds

Jakarta is in a bind over interest rates

27 April 2018

Indonesian stocks are sliding alongside the rupiah, as higher U.S. yields prompt investors to sell out. But growth is tepid in Southeast Asia’s largest economy and an election looms. So the central bank is unlikely to follow through on talk of a hike, unless conditions worsen.

Australian hospitals operator given LBO lifeline

27 April 2018

An unwanted $3.1 bln offer values Healthscope only a bit higher than its 2014 IPO price. The deal is also being led by the same buyout executive who bought and sold the company for TPG. Healthy skepticism is warranted, but there's a chance to be discharged without further injury.

Baidu’s revival adds speed to China’s AI race

26 April 2018

Quarterly earnings at China’s search giant topped $1 bln, trouncing expectations. Sales at its listed video arm, iQiyi, also jumped. Baidu may have been eclipsed by rivals like Alibaba, yet progress in autonomous driving is giving it an early lead in tech's next battlefield.

Microsoft is designated driver of the tech world

26 April 2018

The tech giant is vying with Amazon to be the planet’s second-biggest firm by market value, at around $730 billion. Microsoft looks dull, but the predictability of its earnings under Satya Nadella has helped its shares outperform Apple, Alphabet and Facebook.

Decline is comfortable for U.S. asset managers

26 April 2018

Volatility isn’t rescuing listed money managers: most had fresh asset outflows in the first quarter. Yet the industry’s high margins, a clamp on expenses and growth in areas like so-called target-date funds kept profit flowing. The sector’s erosion is mercifully glacial.

Amazon is getting bigger, but also heavier

26 April 2018

Jeff Bezos’s firm made $51 bln in quarterly revenue. Sales have more than doubled in five years, but it’s taking more fixed assets to get there. Amazon now uses property and such with less efficiency than Walmart – just as its more traditional rival tries to go the other way.

WeWork junk-bond investors enable a contradiction

26 April 2018

The trendy shared-office outfit is the latest firm with heady prospects and huge cash burn to tap credit markets. Like Uber, Tesla and Netflix, WeWork needs funds for expansion to justify its valuation. Yet the healthy cash flow creditors prefer may only come with slower growth.

ConocoPhillips shows way on cash discipline

26 April 2018

Higher oil prices are fortifying Big Oil’s finances, as the U.S. producer’s earnings confirm. CEOs have to balance buying new assets, beefing up balance sheets, and paying cash out to shareholders. Wasteful opportunities abound, and Conoco’s measured approach is worth mimicking.

Nintendo aims splat bomb at Japan’s gerontocracy

26 April 2018

The maker of hit video game Splatoon is getting a 46-year-old boss. That’s refreshing in an ageing country where seniority counts for so much. Youth can be a liability too, as evidenced by the growing pains of Uber or Facebook. But Nintendo’s business is a young man’s game.

Lazard and independent peers stuck in the middle

26 April 2018

Advisory firms hate being called “boutiques,” and justly so. The $7 bln Lazard collects more deal fees than Citigroup. But outgrowing the moniker still leaves them with the volatility of being fairly small, while adding the hiring problems of banks 10 times as large.

Diminished Deutsche Bank resembles cut-price BNP

26 April 2018

The German lender signalled the end of its global investment banking ambitions with cuts in the U.S. and Asia. New boss Christian Sewing plans to focus on Europe and more stable revenue sources. But low profitability hinders his plan to mimic continental rivals like BNP Paribas.

BP’s chairman pick is odd balm for old pay scars

26 April 2018

The UK oil major has picked ex-Statoil CEO Helge Lund to replace Carl-Henric Svanberg. Lund is a respected figure, but drew investor heat for his high remuneration when at BG Group. Given BP Boss Bob Dudley himself had a pay spat in 2016, it will raise investor eyebrows.

Barclays’ new vigour tempers calls for shake-up

26 April 2018

The UK bank earned an 11 pct return on equity in the first quarter, excluding 2 bln pounds of fines and charges. A revived investment bank vindicates CEO Jes Staley’s faith in the business. His next challenge is to re-stock capital buffers to clear the way for higher dividends.

VW’s new boss has $184 bln of low-hanging fruit

26 April 2018

CEO Herbert Diess kick-started an overhaul of the carmaker. Cutting jobs will be hard given VW’s union-heavy board. But by slashing the group’s excessive spending on materials like steel, Diess could squeeze suppliers instead. That would make a big difference to its thin margins.

Nomura targets are so close and yet so far

26 April 2018

Weighed down by a legal charge, the Japanese bank's annual profit fell 8 pct to $2 bln. At least there were encouraging signs in trading and investment banking in the last quarter. With earnings at just 62 yen a share, though, Nomura will struggle to reach a goal of 100 by 2020.

U.S. squeeze could rally China tech behind Beijing

26 April 2018

Like rival ZTE, Chinese telecoms equipment giant Huawei could also be in trouble over sanctions. The duo’s woes show how vital U.S. parts are to global supply chains. Beijing, which has long dreamt of self-sufficiency in technology, could enlist help from the likes of Alibaba.

Ford finally gives GM something to think about

25 April 2018

The $43 bln automaker is scrapping most U.S. cars to focus on SUVs and trucks. That'll free up money and managers to tackle EV and self-driving challenges. It could leapfrog GM, which ditched its unprofitable Europe unit but still has plenty of unroadworthy models and divisions.

Facebook’s future could look like Microsoft’s past

25 April 2018

Tumbling valuations and regulatory attacks crushed the shares of Bill Gates’ software juggernaut two decades ago. Mark Zuckerberg’s social network is growing fast. But that’s no reason to assume that Facebook is immune to the same kinds of risks that challenged Microsoft.

Comcast is best leaving Fox to the Mouse

25 April 2018

Boss Brian Roberts says the cable company is open to acquisitions and he won’t use stock. But how he pays is less important than what he pays. Challenging Disney’s $66 bln deal for parts of Rupert Murdoch’s empire would be an expensive fight. Roberts is better off walking away.

U.S. industrial giants need to be better than good

25 April 2018

Boeing shares took off after the $200 bln plane maker beat forecasts and raised its outlook. Rivals with strong earnings that cast even faint doubt on the future, like Northrop Grumman and Lockheed, lost market value. With equities priced for perfection, investors are seeking it.