Google boycotts expose flaws of digital ads 23 Mar 2017 Verizon and AT&T joined other advertisers in pulling spending from Google over questionable content. A bigger issue is the opacity of the search giant and its fellow online duopolist, Facebook. By withholding money, companies are voicing doubts about digital ads’ effectiveness.
Viewsroom: Google, Facebook under the gun 23 Mar 2017 The ad kings have faced criticism over questionable content. Now Google is in the hot seat as brands like L’Oreal pull their digital spending. Also, Lyft finds an opening as Uber hits roadblocks. Plus: Not all is copacetic between Goldman Sachs alumni in Washington.
Investors too blasé about grim reaper’s scythe 23 Mar 2017 An activist bet the farm on 72-year-old Hunter Harrison turning around $43 bln railroad CSX in four years. Actuarial tables suggest a real danger he might not. CEOs are becoming grayer, meaning shareholders have become more willing to bear the risk of impromptu corporate changes.
Unilever’s spreads sale plan contains adequate fat 23 Mar 2017 After Kraft’s aborted bid, the Marmite maker needs a self-help plan. Selling its spreads business would be risky as weak growth prospects may mean a low price. But on modest assumptions a private equity buyer could get a decent return – and kick-start Unilever’s reinvention.
Co-op bail-in would set bank creditors on edge 23 Mar 2017 The Co-operative Bank needs capital again, and markets are fretting over the risk of a resolution. Given Co-op’s ongoing losses, the Bank of England could justify one. The risk is investors think that even banks with respectable capital ratios aren’t safe from regulators.
Next takes fashion tips from financial world 23 Mar 2017 The retailer has subjected itself to a stress test – previously the stuff of banks. The result: if a store’s sales fall 6 pct a year for a decade, its net profit margin will halve. Openness about problems is welcome. But this voluntary exam may gloss over some other risks.
Life is looking up for China’s insurance giants 23 Mar 2017 Low interest rates and stricter capital rules made 2016 hard for mainland life insurers like Ping An and China Life. Now, the tide is turning as bond yields rise. For major players, a crackdown on high-return investment products should also help them regain market share.
Sears endgame and Lampert’s may diverge 22 Mar 2017 The troubled U.S. retailer warned it could be headed for bankruptcy after a 12 pct decline in sales and more losses. The hedge-fund boss's long quest – and drip feed of credit – to turn Sears around looks destined to fail, but along the way he has hedged some of his bets.
Hadas: The stakeholder revolution has been delayed 22 Mar 2017 Robust takeover rebuttals by Unilever and Akzo Nobel suggest that explicitly ethical stakeholder capitalism can overturn the idol of short-term shareholder value. That mostly makes economic sense. But the pressure for quick financial results is increasing. Compromise, please.
Oil giant Petrobras leads Brazil out of the mire 22 Mar 2017 A rotting-meat scandal is the latest corruption mess to stink up Brazil’s reputation. But an earnings revival at the country’s state oil firm, whose kickback woes helped create the stench, shows reforms are bearing fruit. Sweeter smells of recovery should follow.
Tencent’s new high score enables M&A attack mode 22 Mar 2017 The Chinese web giant’s revenue surged 44 pct to $6 bln in the fourth quarter, powered by games and advertising. Fast-growing payments and cloud computing units also contributed. To sustain growth and keep rivals at bay, Tencent's acquisition machine will have to go up a level.
Banks could do more in money laundering battle 22 Mar 2017 ING faces probes over links to a years-old graft case in central Asia, while UK lenders face questions over illicit Russian funds. The common theme is the difficulty of compliance in a world of faceless shell companies. The key is for banks to lobby harder for transparency.
Deutsche Bank bonus payout is bigger than it seems 22 Mar 2017 The German lender said its 2016 variable compensation was almost 80 pct less than in 2015. But factor in 1.1 billion euros of “retention awards” and the cut looks less extreme. The need to avoid an exodus of key staff helps explain the gap between rhetoric and reality.
Big brokerage IPO requires faith in Chinese reform 22 Mar 2017 Guotai Junan Securities is poised to raise $2 bln in Hong Kong. The sector is crowded, margins are thin, and regulators are fickle. But Guotai's scale and breadth position it well to benefit from more liberalisation and better enforcement.
SoftBank and Alibaba have Indian tangle to unpick 22 Mar 2017 A potential merger between Snapdeal and Paytm would take Masayoshi Son and Jack Ma off the warpath in India, where their flagship companies, SoftBank and Alibaba, have invested in the rival e-commerce unicorns. Such a truce would save investors money in the long run.
Jefferies reassures Wall Street’s momentum is real 21 Mar 2017 A surge in fixed-income trading and underwriting helped the investment bank more than double its revenue in the latest quarter. With the Fed tightening and the yield curve steepening, the first batch of 2017 results suggests trading engines are firing on many cylinders.
Goldman’s robo venture co-opts startup rivals 21 Mar 2017 The U.S. investment bank is the latest established player to build an automated private banking tool for clients. Standalone robo-advisory services are already struggling with lousy margins. Now, as more incumbents fight back, their best option may be to sell.
Spotless bid leaves private equity mess Down Under 21 Mar 2017 The cleaning and catering firm is fielding a surprise $1 bln takeover bid. Long-suffering owners will be tempted to cash out at a 59 pct premium. But IPO buyers won't be made whole. So this will remain a cautionary tale for Australian investors wary of PE-backed flotations.
Lyft gets free ride from Uber’s spate of accidents 20 Mar 2017 Lyft trailed so badly in the battle of ride-hailing services that it recently considered selling itself. But a series of crises at market leader Uber has enabled its smaller rival to attract riders, drivers and capital. Travis Kalanick’s missteps could make this a closer race.
Google and Facebook tipping balance of power 20 Mar 2017 The web-search giant lost Havas as a client in Britain and is being squeezed by the UK government over ad placements and policies. Similarly, Mark Zuckerberg’s social network faces outcries over fake news. Pressure is slowly but steadily mounting for this $1 trln digital duopoly.