Capital Calls: LVMH and Arnault 16 Mar 2022 Concise views on global finance: The 315 bln euro luxury group’s plan to raise the age limit for its CEO role may mean Bernard Arnault is struggling to decide on a successor, though for now shareholders won’t care.
Fed board flame-out still leaves banks on thin ice 16 Mar 2022 Sarah Bloom Raskin’s failure to clinch the supervisory lead role at the central bank proves what was already clear: only a centrist who avoids divisive issues like climate can get approval from a divided Senate. But while Big Oil may be off the hook, Wall Street probably isn’t.
Discovery CEO pay starts new era on wrong footing 15 Mar 2022 David Zaslav was awarded $247 mln for heading the TV firm in 2021, twice what Tim Cook got for running Apple, a company 200 times bigger. Shareholders don’t get a say on Zaslav’s slab of cash and options. But they will after its merger with WarnerMedia, and it may not be pretty.
Deutsche CEO’s new plan is a dicey bet on peace 10 Mar 2022 Christian Sewing hopes to boost revenue 4% a year to hit a 10% return on tangible equity target in 2025. A prolonged Ukraine war and soaring energy prices could make that impossible. Sewing would then be back to square one: cutting his way to higher returns rather than growing.
Capital Calls: Americans accept inflation for now 10 Mar 2022 Concise views on global finance: U.S. prices rose a whopping 7.9% year-on-year in February. Even so, Russia’s invasion of Ukraine has improved President Joe Biden's approval ratings. It may not last.
Wall Street hyperbole washes up in Sydney storms 4 Mar 2022 The New South Wales premier called this week’s torrent a “one-in-a-1,000-year event”. It evokes Goldman CFOs ascribing improbable standard deviations to choppy markets. Such quips, like the terms drought and natural disaster, mischaracterise risk and obscure needed action.
Capital Calls: Argentina, Oligarch yachts 4 Mar 2022 Concise views on global finance: Argentina’s $45 bln debt deal is hope trumping experience; Floating assets sometimes worth more than $500 million each are worthy sanctions targets.
Capital Calls: Snowflake’s no snowflake 3 Mar 2022 Concise views on global finance: The data warehouse firm doubled revenue, but the stock was whacked. Snowflake’s solid finances mean missteps are valuation conundrums, not existential threats.
Citi’s new targets half hit the mark 2 Mar 2022 CEO Jane Fraser thinks the gaffe-prone U.S. bank can clean up and deliver a 12% return on tangible equity. It’s less ambitious than Wall Street peers, but Citi’s challenges are bigger. To the extent it relies on growth rather than self-help, investors are justifiably skeptical.
Oligarch sanctions’ devil no longer in the detail 1 Mar 2022 Brussels froze assets of Russian billionaires like Alexei Mordashov and Mikhail Fridman. Unlike U.S. sanctions, their companies don’t automatically get hit. Even so, counterparties may in any case decide steel group Severstal and investor LetterOne are too toxic to deal with.
Toshiba CEO change sends promising signal 1 Mar 2022 Satoshi Tsunakawa will be replaced by Taro Shimada, who joined from Siemens in 2018. The move suggests a sale option might get reconsidered over a controversial breakup plan. The bad governance that has dogged the conglomerate, however, means any optimism should be muted for now.
Goldman reminds top dogs it can do what it wants 23 Feb 2022 The Wall Street firm may confiscate stock issued to a banker who left to start a business for Walmart. Goldman has historically gone easy on employees who join big clients. But competitors are proliferating, and boss David Solomon needs a firm hand to deal with new rivals.
CalPERS offends no one with new investment chief 22 Feb 2022 That’s tough on Nicole Musicco, appointed to run the retirement fund’s nearly $500 bln of assets after an 18-month search. But it reflects politics at the California giant, not her abilities. One goal should be to nudge CalPERS toward the pension model of Musicco’s native Canada.
Capital Calls: DraftKings, Shake Shack, Fanatics 18 Feb 2022 Concise views on global finance: The online gambling firm predicts fast growth but heavy losses; the U.S. burger chain had disappointing earnings yet its valuation is sky-high; the sports merchandiser teams up with Jay-Z to buy a streetwear firm for a song.
StanChart’s modest targets risk becoming a mirage 17 Feb 2022 CEO Bill Winters is aiming for a 10% return on equity by 2024, having failed to hit the same goal in his first seven years in charge. Rate hikes will help this time, but the plan hinges on aggressive growth hopes. Winters may have to consider more radical cost cuts and disposals.
Citi’s Jane Fraser embodies Wall Street’s pay gap 15 Feb 2022 The new CEO’s $22.5 mln package lags jumbo sums awarded to JPMorgan’s Jamie Dimon and Goldman Sachs’ David Solomon. Citi hasn’t been a great investment. But overemphasizing past returns could leave Citi the worst of both worlds: A troubled bank with a boss in need of motivation.
Capital Calls: EVs run over ethanol and gas 15 Feb 2022 Concise views on global finance: Farmers and oil barons are set for more fights after a recent study showed the biofuel is likely at least 24% more carbon-intensive than gasoline. They are missing the bigger threat.
Capital Calls: Clariant’s whistleblower woes 14 Feb 2022 Concise views on global finance: The $6 bln Swiss chemical firm’s shares fell by as much as 20% after it delayed 2021 results due to an accounting probe.
Rio’s culture rot puts investors on the spot, too 14 Feb 2022 The miner’s endemic racism, sexism and bullying is a wider wake-up call. Shareholders tend only to push firms for board diversity and equal pay. Yet a dysfunctional workplace runs deeper, affecting earnings and even M&A. It’s time social failings got some climate-style activism.
Naturgy split may be less than sum of its parts 11 Feb 2022 The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.