Government & Agencies

Viewsroom: Disney, Comcast go from zero to berserk

21 June 2018

The Magic Kingdom and the cable company are driving up the price for parts of Twenty-First Century Fox in a global M&A battle that throws financial logic out the window. But does it make sense strategically? Plus: India’s cricket league takes a few pages from the NFL playbook.

KPMG wrist-slap shows auditors are too few to fail

19 June 2018

Half the accounting firm’s audits for large companies last year were flawed, the UK watchdog found. Bigger fines and closer scrutiny are reasons to improve. But as long as competition is limited to the “Big Four” it’s hard for clients to switch – or for regulators to get tougher.

ZTE becomes an even cheaper stock option

19 June 2018

The sanctioned Chinese telecom giant’s Hong Kong shares tumbled 22 pct after the U.S. Senate passed a bill that would yank a lifeline tossed by President Donald Trump. Yet ZTE’s fate is not sealed. The political calculus may be tough to solve, but favours the brave investor.

Glencore Congo settlement is a calculated risk

15 June 2018

Paying royalties to Israeli businessman Dan Gertler in euros rather than dollars helps solve the commodities giant’s headache in the African country, while avoiding falling foul of American sanctions. The danger, though, is that the United States changes the goalposts.

The Exchange: Italy’s almost premier

15 June 2018

Carlo Cottarelli talks about how he nearly led a caretaker government after President Sergio Mattarella last month rejected a euroskeptic finance minister put forward by the parties that won March elections. The former IMF economist has some advice for Italy’s new bosses.

Judges supplement U.S. defences on China trade

15 June 2018

The Supreme Court said courts shouldn’t take foreign governments’ claims about their own laws at face value. The underlying case, over vitamin price-fixing, rumbles on. This decision attacks an inconsistency Beijing has exploited in arguing firms are just following orders.

Viewsroom: AT&T win is unlikely to muzzle watchdogs

14 June 2018

The telco firm prevailed against the DOJ and can now legally buy Time Warner for $85 bln. The green light doesn’t mean that regulators will roll over for other deals however. T-Mobile US and Sprint may still be in the crosshairs. Plus: An Australian bank cartel runs into trouble.

China starts trading debt for growth

14 June 2018

Shadow bank lending slowed sharply in May, and investment growth slipped to just 6.1 pct. For now, Beijing’s target of increasing GDP by 6.5 pct annually is safe. But officials will be thinking about creative ways to keep credit flowing, even as they discourage riskier behaviour.

Fed steps closer to horns of interest-rate dilemma

13 June 2018

The U.S. central bank raised rates again as expected. Low unemployment and building inflation will force the Fed to consider how high it should go to prevent overheating – a shift from worrying about keeping rates low to support the economy. Trade wars are another complication.

AT&T deal approval doesn’t mean anything goes

13 June 2018

The U.S. Justice Dept gambled when it sued to block the $85 bln Time Warner sale. Its failure means business as usual for vertical mergers, like Comcast’s likely bid for Fox. Big firms that directly compete will still face tough scrutiny – and prosecutors eager for a clear win.

Toshiba’s $6 bln buyback signals welcome change

13 June 2018

The electronics group will retire more than it raised from hedge funds last year. While it was flush with cash after selling a memory chip unit, the new CEO had plenty of reasons to hoard. That he didn’t aligns Toshiba with Japan’s broader push to be more investor-friendly.

Glencore solves least troubling Congo problem

13 June 2018

A debt-for-equity swap at a DRC unit settles a thorny dispute with state miner Gecamines. But the $74 bln resources giant is no nearer to a deal on the country's burdensome new mining code. Heightened uncertainty over upcoming presidential elections only adds to the discomfort.

New ZTE regime could climb out of big hole

13 June 2018

The Chinese telecoms company lost some $3 bln of market value after its reprieve from a U.S. death sentence. That suggests concerns about the clean management sweep. If, however, ZTE can find decent leadership and stay out of trouble – big ifs – a 5G rollout holds real promise.

Facebook is light on Washington friending skills

12 June 2018

Its lobbyists tried to do damage control in Congress as its data-sharing with China’s Huawei came to light. Their lack of answers left the impression they weren’t in the loop, and the company’s defensive tweets didn’t help. Facebook could use a lesson in diplomacy as well as transparency.

Trump and Kim’s TV diplomacy lacks definition

12 June 2018

A meeting between U.S. President Donald Trump and North Korea’s leader was mostly for the cameras. "Denuclearization" remains a distant prospect. Still, engagement reduces the risk of ruinous conflict and might even pry open Pyongyang’s closed economy, benefiting neighbours.

Trump-Kim parley has a downside for Xi

11 June 2018

A breakthrough in Singapore between the mercurial U.S. and North Korean leaders would be an economic win for Seoul and others in the region. China might even profit from the détente. President Xi Jinping also could lose negotiating leverage, though, as trade tensions escalate.

Italy’s new cabinet dials up protectionist signal

8 June 2018

Prime Minister Giuseppe Conte’s government declared a listed telco in which Libya has long been the top investor a strategic asset, hitting shares. Retelit says it can handle the state oversight. But it sends a warning to foreigners seeking to buy Italian infrastructure.

Japanese CEOs get new excuse to stop stock-picking

8 June 2018

An updated governance code tells boards to run cost-benefit analyses on holding stakes in other listed companies. It’s too much to hope this alone will catalyse disposals and buybacks. But it could help shareholders, such as those at broadcaster TBS, make a case for streamlining.

G7 risks becoming G-zero without consensus

7 June 2018

President Donald Trump is the sore thumb among leaders meeting in Canada on Friday. Last year’s G7 pledges were already watered down, and he hadn’t then left the global climate accord or started erecting trade barriers. The forum loses relevance if it lacks U.S. economic backing.

Investors think Qualcomm-NXP deal is back on

6 June 2018

The $44 bln chip acquisition-in-waiting may finally get approval from Beijing – if Chinese telecom-equipment group ZTE can turn a U.S. business ban into a less damaging fine. NXP’s stock is again trading within 10 pct of the offer price. It’s still a bet fraught with uncertainty.