Corporate Governance – Breakingviews

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Corporate Governance

India holds back a currency bazooka

5 October 2018

The rupee is the worst performer in Asia this year, and doubts about the integrity of local shadow lenders are weighing it down further. A decision to keep rates steady acknowledges monetary policy won’t help much. Still, the central bank has a bigger weapon: diaspora bonds.

China is feeling the aftershocks of 2008, again

28 September 2018

Wall Street’s implosion taught Beijing to rue reliance on a rival. Yet officials, gloating over U.S. failures, neglected reform. Despite a decade trying to wean itself from American consumers, cash and currency, complacency has left China exposed to bad policies in Washington.

Musk suit could uncover Tesla’s true value

27 September 2018

The U.S. securities regulator wants Elon Musk removed as CEO and director, saying he lied about a plan to take the $53 bln electric-car maker private. His exit would leave Tesla much depleted, but also more rationally valued – if it can motor past a looming liquidity crunch.

Alibaba at last tackles taboo governance topics

27 September 2018

The Chinese online titan published its first ESG report, spotlighting awkward partnership and mainland ownership structures. It's a big step given that such thorny matters usually get short shrift. Accountability questions remain, but Alibaba is heading in the right direction.

Chinese IPOs bring casino trading to New York

18 September 2018

U.S. markets are getting a taste of mainland volatility. News app Qutoutiao more than doubled on its first day before plunging on the second; carmaker Nio has also see-sawed. Small floats and untested models are partly to blame, but erratic behaviour will hamper future debuts.

Chinese Tesla’s $1.3 bln IPO revs up too fast

11 September 2018

Electric-car maker Nio has a rich price tag to match its premium branding. Under the bonnet, though, it looks less shiny. The group combines an opaque legal structure favoured by tech giants with dependence on a local auto partner. Sales are still nascent, and rivals abound.

Jack Ma’s exit plan just raises more questions

10 September 2018

Alibaba says CEO Daniel Zhang will succeed the $420 bln group's co-founder as chairman in 2019. Planning ahead is laudable, but the sketchy blueprint, after a baffling interview, leaves worries over the top job and Ma's influence unanswered. It's one step forward, two steps back.

Jack Ma’s next moves will instruct China tech

8 September 2018

The charismatic co-founder of Alibaba says he plans to retire. It’s a sign of the $420 bln company’s maturity that others are ready to step up, unlike at rivals like scandal-hit JD. But he will still wield huge influence. Investors will want clarity on who really holds the reins.

Musk flip-flop makes job harder to do – and keep

25 August 2018

Tesla’s CEO has pulled the plug on taking the $55 bln electric-car maker private, capping a record of overpromising and underdelivering. The abysmal handling of the half-baked idea calls Musk’s judgment further into question, just as Tesla needs cool heads to become profitable.

Guest view: ESG ratings aren’t reliable enough

10 August 2018

Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.

China Tower debut reveals costs of tech leadership

8 August 2018

The newly listed towers firm trades at a low valuation like its telecom peers. Investors know that politics will come before profit as a costly build-out of 5G looms on the horizon. It’s a keen reminder of the price Beijing must pay to achieve cutting-edge tech dominance.

Australia’s bruised CBA shows signs of resilience

8 August 2018

The country's largest bank has endured public scrutiny, fines and executive departures. But a near-5 pct drop in full-year earnings, the first decline in almost a decade, belies a more encouraging picture for businesses like home loans. New boss Matt Comyn has tools to rebuild.

Viewsroom: CBS’s $184 mln #MeToo challenge

2 August 2018

That’s what CEO Les Moonves gets if he leaves the U.S. TV network – unless fired for cause. That’s rare in corporate America. But allegations he sexually harassed women put the board on the spot. Plus: Hong Kong battles the Big Apple for IPOs. And China faces a vaccine scandal.

GAM plays canary in bond liquidity risk coalmine

2 August 2018

Redemption requests spiked after the Swiss hedge fund suspended one of its asset managers. Turning down such demands prevents less agile clients from being penalised. But the move highlights the industry-wide problem of how little it can take to gum up apparently liquid funds.

Google’s China re-entry plan looks evil and risky

2 August 2018

The internet giant is planning a censored search engine for China, The Intercept reports. Taking share from local champions like Baidu could prove profitable. But Beijing wants to get its hands on Google's AI expertise. Morality aside, a return would be dangerous business.

Rio’s shareholder bonanza hints at elusive M&A

1 August 2018

The giant miner reported a sturdy 12 pct rise in first-half earnings, narrowly missing forecasts. It will, though, hand back $7.2 bln, including a record dividend. That suggests long-expected deals are hard to find despite shaky markets, cheaper shares and M&A noise elsewhere.

How Sergio Marchionne saved Fiat and Chrysler

30 July 2018

The automakers’ former boss, who has died at 66, rescued both from the wrecker’s yard. His push for breakups and consolidation also helped produce better shareholder returns than his main rivals. A new selection of Breakingviews columns offers a taste of his 14-year tenure.

Lax corporate governance damns China Inc

24 July 2018

A new report reveals slow progress improving clarity and accountability. Weak controls are so rampant that foreign and local investors alike prefer state dinosaurs to independent companies. More boardroom meddling by Beijing will further deter investment in the private sector.

China’s fiscal nudge betrays growth jitters

24 July 2018

The government is adding some $10 bln of corporate tax cuts as part of a broader policy push. It follows tussles between the central bank and the finance ministry over how to support an economy that just expanded 6.7 pct. Speed is as much a priority as rebalancing growth.