Consumer Products and Services

China makes market tea leaves very hard to read

28 July 2021

It took a while, but an unrelenting stream of crackdowns finally spooked investors. The country’s blue-chip stocks have slid near bear-market territory from a February peak. Although some sectors have been spared, only the truly daring will venture into riskier areas now.

Tech giants’ next acquisition could be themselves

27 July 2021

Alphabet, Amazon, Apple, Facebook and Microsoft hold around $600 bln of cash. As revenue booms, investors will be keen to see it put to work. Doing deals is a tough sell politically, so buying back more shares could be the logical answer, even with stock prices riding high.

GE chief accepts the things he cannot change

27 July 2021

Larry Culp’s monomaniacal quest to make his $120 bln conglomerate “lean” is paying off. GE’s cash flows are improving. But Culp can’t do anything about shifting tides of customers’ behavior. Investing in GE also requires getting comfortable with the things Culp can’t control.

Tencent sends frightening WeChat status update

27 July 2021

Investors wiped $54 bln from the Hong Kong-listed company’s value after it froze user sign-ups on its chat app. Tencent blamed a technical upgrade, reassuring few given regulators have used suspensions to punish other firms. As panic sets in, markets will get harder to calm.

Inflation complicates Reckitt’s tricky turnaround

27 July 2021

The Strepsils maker’s stock fell as much as 9%, as rising costs hurt its profitability. The shares are now down since CEO Laxman Narasimhan took over in 2019, highlighting the challenges he faces in reviving the group’s fortunes. A likely boom in cold medicine sales should help.

China’s tutoring rules create tough VIE homework

27 July 2021

Variable interest entities used to skirt overseas investment restrictions have existed in a regulatory gray area. Beijing’s ban on foreign funds in education suggests those days are ending. Unwinding the structures will be messy, but also could teach other industries a lesson.

GSK’s messy split opens door to cleaner M&A cure

26 July 2021

The British drugmaker could sell its consumer unit after pressure from activist Elliott. The maker of Advil painkillers might be worth $70 bln to a bidder like Procter & Gamble. A sale would mean a faster exit and raise more cash than CEO Emma Walmsley’s spinoff plan.

Guest view: Investing when inflation is a mystery

23 July 2021

Trying to outguess asset prices on how fast consumer prices will rise is pointless, Gerard O’Reilly, chief investment officer at Dimensional Fund Advisors, says. Better to focus on ways of outpacing or hedging against what’s anticipated by market gauges of inflation expectations.

Capital Calls: Covid fibs, M&A flop, Hard seltzer

23 July 2021

Concise views on global finance: Forcing social media to take down vaccine misinformation is a good step on U.S. content rules. Meanwhile, a German real estate deal fails to get enough shareholder votes, and Boston Beer’s hard seltzer sales fizzle.

South Korea plays foolish game of IPO Whac-A-Mole

23 July 2021

Dizzying valuations are prompting regulators to meddle in stock listings including Krafton’s. It's a misguided attempt to rein in retail traders and an overheating market. Kakao Bank escaping scrutiny is just one indication of how hard it will be to keep up with the frothy deals.

Investors too gloomy over Biogen Alzheimer’s drug

22 July 2021

The approval of what might be the top-selling drug of all time has tacked a remarkably meh $5 bln onto Biogen’s value. Sure, the drug seems marginally effective. And it’s costly. But investors are assuming successful payer pushback, which rarely happens in American healthcare.

Unilever’s inflation struggle is a mixed basket

22 July 2021

Higher costs squeezed the $155 bln Marmite maker’s profitability in the first half, forcing CEO Alan Jope to dump his goal of higher operating margins. Hefty marketing spend gives Unilever scope to raise prices faster. But investors are placing a bigger discount on future growth.

Las Vegas Sands’ new boss lays down his cards

22 July 2021

The first set of quarterly results under Sheldon Adelson’s successor show Covid is sapping growth in Asia. But Robert Goldstein is touting bold plans to take the $38 bln casino empire online. The fresh strategy looks promising and might reward investors who play a long game.

China’s nimbler Robinhoods have arrows in reserve

22 July 2021

E-brokerage firms Futu and Up Fintech shed a combined $3.4 bln in market value after Beijing's tech crackdown. Growth may slow, but diverse business models spanning wealth management, IPO underwriting and managing employee stock schemes set them apart from the U.S. firm.

Capital Calls: Volvo, Moderna, Mediobanca

21 July 2021

Concise views on global finance: The Swedish automaker boosts its appeal ahead of a possible IPO by buying out its Chinese joint venture partner; joining the S&P 500 will cut both ways for the vaccine maker; another Italian tycoon ups his stake in the Italian investment bank.

SoftBank checks in early for post-Covid hotel boom

21 July 2021

The Japanese group’s Vision Fund 2 is investing $1.7 bln in South Korean unicorn Yanolja. As travel returns, it’s a bet on the upstart’s AI-powered software and contactless services for guests. Business is booming, suggesting the sector is eager to master new tech.

Aussie oil deal drills into some messy territory

21 July 2021

Embattled Oil Search rejected a $6.5 bln offer from rival Santos. A merger would help clear up the target’s poor governance and improve the bidder’s balance sheet. And yet a takeover looks a financial stretch for Santos and could devolve into a value-destructive bidding war.

Great Wall Motor is all thrills, no frills

21 July 2021

The $54 bln Chinese automaker’s no-nonsense approach tripled earnings in the first half. Its affordable conventional designs are crowd-pleasers, while smart bets on battery technology are goosing the valuation. Shareholders in flashier rivals like Geely might take note.

Altria better off giving cash away than burning it

20 July 2021

The Marlboro maker agreed to sell a wine business for $1.2 bln and is sitting on $13 bln worth of shares in A-B Inbev, from a previous sale of Miller Brewing. Exiting that in October, when it can, makes sense especially given Altria’s habit of splurging at shareholders’ expense.

Capital Calls: BBQGuys go easy on the hot sauce

20 July 2021

Concise views on global finance: An e-commerce company for grill connoisseurs is going public via a blank-check company with a valuation that befits its side-dish status.