Managerial competence makes the difference in 2016 5 Jan 2016 Markets are getting choppier. Capital is becoming more expensive in the world’s largest economy. Globalization is taking big knocks. Economic growth is middling. Good managers will distinguish winners from losers as much as valuable assets do from lousy liabilities.
Healthcare M&A will wear down in 2016 4 Jan 2016 Obamacare and tax avoidance spurred over $550 bln of U.S. deals in 2015. That’s three times more than the previous record. With the obvious combinations already struck, acquisitive companies hurting and trustbusters sharpening their pencils, a repeat will be challenging.
Technology can help banks do a hard reset on costs 4 Jan 2016 U.S. lenders face slow growth, barely rising interest rates and a likely jump in bad loans. They ought to pinch a few ideas from the financial-technology crowd. That could make banks far more efficient - and do wonders for the sector’s mediocre returns.
Luxury slowdown could delay Gucci revamp 4 Jan 2016 The Italian brand is heading into year eight of its makeover. With a sluggish China dragging down personal luxury sales growth to 2 percent, parent Kering has picked a difficult time to bring in new bosses. Resuscitating its most important label could take longer than expected.
Asian bankers will shift from deals to distress 4 Jan 2016 Cheap credit helped drive Asia’s merger boom. As growth slows and debt becomes more expensive, bankers are limbering up for a wave of restructurings. The work can be lucrative, but arranging corporate burials requires a very different set of skills than presiding over marriages.
Breakingviews predicts a rock’n’roll 2016 4 Jan 2016 For some economies and businesses, the year could be a stairway to heaven. For others, it may turn into a highway to hell. From the U.S. election to Britain’s possible exit from the EU, upheaval at Volkswagen and much more, we offer smart financial ideas for the 2016 playbook.
Viacom, Time Warner among 2016 merger wannabes 31 Dec 2015 U.S. media distributors such as cable outfit Comcast have bulked up, and Apple, Amazon and the like have built new streaming models. The giants have 12-digit valuations. With the exception of Disney, traditional content makers are looking puny. They’ll feel the urge to merge.
Volkswagen top brass will be up for the chop 31 Dec 2015 The German carmaker’s chairman and CEO are both new to their roles. But in 2016, huge emissions-cheating fines and a scathing external report on VW’s governance will shine a spotlight on leaving long-term insiders in charge. Chairman Hans Dieter Poetsch looks particularly exposed.
European populism poised for troubling second wave 31 Dec 2015 Southern Europe’s high debts and unemployment made it ripe for populism, but movements like Podemos have been held in check partly by economic recovery. They may now gather steam in other European countries, feeding on growing anti-immigration and eurosceptic sentiment.
Ivan Glasenberg may be mining’s last man standing 31 Dec 2015 The Glencore chief outlasted his peers when the commodity boom turned in 2013. The sector may be due another shakeout in 2016 if prices keep falling. But Glasenberg’s big stake in Glencore and his newfound dash of humility mean his copper plating should last another year.
Oil will blow past $80 a barrel in 2016 30 Dec 2015 Low-cost OPEC producers will win the hydrocarbon price war because they can fight harder for longer. For now, OPEC is flooding the market with cheap crude. But it is building power over prices by making rival output uneconomic. The next big move in the oil price will be up.
Fund glut will send Asia’s buyout barons off-piste 30 Dec 2015 Local private equity firms are flush with unspent capital. Though that’s a global issue, it’s more acute in Asia due to a dearth of sizeable takeover targets. Firms will be tempted to overpay for assets, buy businesses from rivals, or drift into unfamiliar kinds of dealmaking.
Giants of central banking will be cut down to size 30 Dec 2015 The limited power of the Draghis and Yellens of the world is evident. They can’t conjure up inflation and the market impact of unorthodox monetary policies has waned. Rate-setters did their bit to support the global economy. It’s time fiscal and wage policies did more work.
Luxury groups could shrink their way to riches 30 Dec 2015 Labels like Prada and LVMH have spent a decade expanding like crazy to meet emerging market demand. Burberry has tripled its store base. It’s time to go the other way. While cutting back will be painful, it could spur higher luxury valuations. Hermes is one that has it right.
Annual reports offer front-page warnings 30 Dec 2015 Valeant’s investor update boasted of a “simple philosophy” that is now under attack. Volkswagen’s claim of “moving progress” rings hollow. StanChart stock has been “leading the way” down since the bank used that heading in 2012. A smug title may be a sign that hubris has set in.
Rail mega-deal holds ticket to runaway M&A train 29 Dec 2015 Canadian Pacific’s $28 bln bid for Norfolk Southern involves an industrial buyer facing low growth and an aggressive investor. The offer is unsolicited, cross-border and legally messy. After a record year of mergers, this one transaction foretells much of what to expect in 2016.
Worst CEO job in America for 2016? P&G 29 Dec 2015 David Taylor will struggle to make his mark on the lumbering $200 bln giant. His predecessor-turned-Chairman A.G. Lafley already axed weaker brands, leaving Taylor to sort out growth. He may be forced to break up the Tide-to-Pampers icon or spend the year fighting calls to do so.
Arab sovereign wealth fund exodus just beginning 29 Dec 2015 Oil-dependent Gulf sheikhdoms need money to shore up their budgets. They’ll hold on to trophy assets like stakes in VW or Barclays for as long as possible. But if the price of crude keeps sliding to $20, the region’s rulers might need to liquidate their rainy-day funds by 2020.
Japan’s outbound M&A wave will sweep up minnows 29 Dec 2015 A growing number of companies are trying to buy their way out of a shrinking home market. While blue-chips like Canon, Nippon Life and Mitsubishi UFJ are still shopping abroad, smaller companies are getting bolder. Watch for less familiar names venturing overseas in 2016.
Clinton White House run clouded by home economics 28 Dec 2015 The Democrat who could become America’s first female commander-in-chief in November is ahead in early polls and at the bookies. Growth is up and unemployment down under Obama, too. It might not be enough, though: traditionally, voters only reward bigger economic dividends.