Illicit money is Europe bank stability blind spot 22 Mar 2018 U.S. authorities arrested the head of a Maltese bank for violating Iran sanctions, prompting calls for it to lose its licence. Similar issues triggered the recent folding of a Latvian bank. Without power to fight financial misconduct, euro zone regulators can’t keep banks safe.
China’s 5G ambition is China Mobile’s punishment 22 Mar 2018 The country's biggest wireless group grew earnings 5 pct in 2017. This year will be tougher. Beijing wants the carrier to deliver a world-beating, ultra-fast network in a jiffy, and sell access cheaply. That will be tough on shareholders, but the state-owned group has no choice.
Chinese drone giant DJI charts a risky flight path 22 Mar 2018 The world’s top maker of unmanned aircraft is raising money at a $15 bln valuation, Reuters says. Sales are soaring and DJI has a commanding market lead. Given drones’ data-gathering ability and military potential, though, DJI could easily hit turbulence in major foreign markets.
How Washington could really fix trade with China 22 Mar 2018 President Trump is rolling out tariffs and wants a $100 bln cut to the deficit. Yet Beijing’s import-substitution plans, forced tech transfers and IP policy are the real problems. By ditching them China would justify a truce, and reinforce its claim to free-trade leadership.
Zuckerberg’s slow defense reveals real weakness 21 Mar 2018 The Facebook founder finally explained how users’ information was harvested - four days after it was revealed by press reports. But his promise to tighten controls rings hollow. The trouble is the social network is built on data. Truly securing it may blow up its business.
Failed MBO leaves Nordstrom in a jumble 21 Mar 2018 The board's rejection of the founding family's $8 bln offer for the retailer makes both sides look too stubborn. Nordstrom is a middling performer in a struggling industry. Compromise would have suited shareholders well. Instead, they face an ill-fitting future.
Bumble may regret swiping left too soon on Match 21 Mar 2018 The women-friendly dating app dissed its $13 bln rival in an ad after Match sued over patent infringement. “We’ll never be yours” is a strong rejection considering the paucity of suitors in the hookup trade. Then again, playing hard to get is a time-honored negotiating tactic.
Aviva reminds investors to read small print 21 Mar 2018 The UK insurer has riled shareholders with a plan to retire supposedly “irredeemable” preference shares at their 450 mln pound face value. The juicy 8.5 pct average coupon made them a hit, but also encouraged Aviva to seek legal loopholes. It’s a powerful lesson in buyer beware.
Facebook leads Silicon Valley to its Minsky moment 21 Mar 2018 The social network feasted on burgeoning data and devices, just as banks gorged on easy money before the crisis. Society’s focus on benefits over risk gave tech companies free rein – until the resulting abuses couldn’t be overlooked. As user trust evaporates, regulation beckons.
Time for Germany to make Deutsche/Commerz happen 21 Mar 2018 The country’s two biggest banks are projected to scrape mid single-digit returns on tangible equity by 2019. A merger that cut a tenth of joint costs could get that closer to double-figures. It could also stabilise Deutsche and give Berlin an excuse to sell its Commerzbank stake.
Vivendi discovers quitters can be winners 21 Mar 2018 Vincent Bolloré’s media group has made a capital gain of 153 pct by selling its stake in Ubisoft, which he had long coveted. The restraint is laudable. If only he could exit as easily from an investment in Telecom Italia, where he is stuck with a paper loss and angry investors.
Kingfisher’s refurbishment has a sloppy finish 21 Mar 2018 The DIY merchant’s good 2017 results fail to cover up other problems. Softening demand in Britain chimes with other UK retailers’ experience. But there’s less excuse for poor stock management and underperformance in France. The company’s turnaround plans may be prone to cracks.
Tencent wisely prepares for post-“Kings” era 21 Mar 2018 Hits like "Honour of Kings" powered another blockbuster quarter for the $565 bln web titan. Yet Tencent's incredible run in online games may tail off, as overall market growth in China slows. Pushing into videos and music is vital, despite high upfront costs and distant returns.
Daimler’s creepy Chinese suitor scrubs up well 21 Mar 2018 Geely’s earnings doubled to $1.7 billion in 2017, as its SUVs flew off the lots. Chairman Li Shufu’s surprise stake-building ruffled feathers in Germany. But Li’s company is trouncing Daimler’s current local partner, BAIC. That might in time prompt a rethink in Stuttgart.
Asia’s banks leave room for debt funds to thrive 21 Mar 2018 Traditional lenders neglect many smaller borrowers in the region. But while they are weighed down by bad loans and tough regulation, that creates a gap for new providers. Private debt funds are benefiting from limited competition and better bankruptcy regimes too.
James Packer’s exit deals Crown a better hand 21 Mar 2018 The Australian billionaire has resigned from the board of his casino empire again, this time for health reasons. He leaves a group still reeling from a Chinese crackdown that left staff in prison and prompted a costly global retreat. The path to recovery is clearer without him.
Pete Peterson built a career, and legacy, on debt 20 Mar 2018 The former Lehman CEO and Nixon cabinet member revolutionized modern finance by teaming with Stephen Schwarzman to found private-equity giant Blackstone. He later used his wealth to champion the cause of deficit reduction. Washington has yet to repay that obligation.
Cox: Dual-class buyers’ early remorse at Facebook 20 Mar 2018 IPO investors in 2012 granted founder, CEO and Chairman Mark Zuckerberg totalitarian power to build the social network. He's now in over his head, seemingly struck dumb, amidst a whirl of data-mishandling allegations. His nearly 60 pct voting control means shareholders are stuck.
Elon Musk pay deal is crazy enough to get the nod 20 Mar 2018 The Tesla boss could collect nearly $60 bln over 10 years. That’s excessive and surely unimportant for motivation. Yet it’s built on PR-stunt targets involving sales, EBITDA and market cap exploding 10-fold or more. For investors voting on the plan, it’s like playing the lottery.
Europe’s data tax war is worthy but hard to win 20 Mar 2018 The EU may tax tech groups’ revenue. The bloc is right to argue that current rules overlook the value firms like Google extract from its citizens’ data. A crude levy on sales is far from perfect, but might add impetus to longer-term international reform efforts.