Fed lets Goldman, Morgan Stanley off lightly 29 Jun 2018 Neither firm can boost buybacks or dividends after their leverage ratio fell below the stress-test minimum. A one-time hit from last year’s tax changes caused it. But Amex, JPMorgan and others handled that smoothly. The two Wall Street banks are lucky the Fed didn’t flunk them.
Xiaomi humble IPO pie still good enough to eat 29 Jun 2018 The Chinese smartphone maker priced its Hong Kong float at the bottom end of a marketed range, valuing it at $54 bln. This isn’t a failure, and investors who believe in the company will like the discount. Missteps by executives and bankers offer lessons for those next in line.
Australia’s ban on Huawei would be a costly call 29 Jun 2018 Having passed a law on foreign meddling in its politics, Canberra now looks set to block the Chinese telecom giant from working on its next-generation mobile network. There are valid concerns. But a ban carries costs: pricier 5G, and worsening ties with its best export customer.
Failed exam suggests deeper U.S. cuts at Deutsche 28 Jun 2018 The German lender was the only bank to flunk the Fed’s annual stress test, adding to its U.S. regulatory woes. Given compliance costs, the result could force new boss Christian Sewing to shrink the bank’s American presence even further. Wall Street titans will strut higher still.
Wall St feels little of Trump’s deregulatory love 28 Jun 2018 Lobbyists for the likes of Goldman Sachs and JPMorgan want watchdogs to reduce a capital surcharge, arguing it’s superfluous. The Fed wants to give it more weight. It’s another example of how smaller banks benefit most from the president’s pledges to roll back post-crisis rules.
Derivatives spat is bad omen for UK-EU regulation 27 Jun 2018 The Bank of England wants European authorities to provide assurance that contracts worth 100 trillion pounds will be valid after Brexit. The EU’s watchdog says banks must prepare for the worst. Playing politics with financial stability bodes ill for future regulatory cooperation.
Disney-Fox-Sky puts UK M&A regulators in a bind 27 Jun 2018 After the Mickey Mouse owner boosted its offer for Rupert Murdoch’s group, Sky investors reckon they’re due a bump. UK regulators’ keenness to protect minority investors implies it should agree. But doing so will also put it in the odd position of adding fuel to an already red hot bidding war.
Softer U.S. China plan is no comfort for investors 27 Jun 2018 President Donald Trump rationally chose to use national-security deal reviews to restrict Chinese investment. It’s a win for his Treasury secretary over trade hardliners. But the review body is opaque, mixed messages have confused markets, and Trump still wants auto tariffs.
Uber leaves London pit stop with minor dents 26 Jun 2018 The ride-hailing app won back its permit to operate in the UK capital. Its new license is shorter than hoped, and concessions like providing drivers’ insurance will lift costs. But CEO Dara Khosrowshahi keeps his service on the road in Europe’s top market and an IPO on track.
Facebook D.C. probe could open a can of worms 26 Jun 2018 Congress wants to hold the social-media platform accountable for Russian election meddling and other concerns. That could affect a key protection for internet firms, which have broad legal immunity for posted content. Reducing it would expose them to a rash of costly lawsuits.
Carillion pitchforks are a blunt but merited tool 26 Jun 2018 The UK pension regulator could claw back 17 mln pounds from bosses of the collapsed outsourcer. That’s peanuts compared to Carillion’s pension deficit, and implies a tortuous legal saga. Still, the group’s chaotic failure and reckless management warrant a hefty deterrent.
Viewsroom: Disney, Comcast go from zero to berserk 21 Jun 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.
Italian bad loan sale defies political risks 20 Jun 2018 Banco BPM sold 5 billion euros of dud loans for 34 percent of face value, amongst the highest prices to date. Rosy valuations and the ECB’s more lenient stance on disposals are a boon for lenders. But buyers risk downplaying the threat posed by Italy’s radical government.
How to solve a brewing $100 trln antibiotic crisis 19 Jun 2018 Germs are evolving immunity to existing treatments, but drug firms are reluctant to develop new ones. The costs could be monumental if they don’t. So-called patent vouchers might help – but big prizes and delinking revenue from pill sales would be cheaper ways to encourage R&D.
KPMG wrist-slap shows auditors are too few to fail 19 Jun 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.
BIS cryptoskepticism is more than fear of change 18 Jun 2018 A rally in digital currencies faded after the bank for central banks said bitcoin and its ilk are unlikely to replace dollars, yen et al. There are good reasons to downplay the roughly $300 bln market’s disruptive potential and instead find complementary uses for the technology.
Audi arrest puts brakes on VW’s reform drive 18 Jun 2018 The head of Volkswagen’s luxury brand is being held over fears he may hinder an investigation into emissions cheating. The question is why the long-serving executive still had his job. The carmaker’s messy governance is still hindering new boss Herbert Diess’ cleanup operation.
Glencore Congo settlement is a calculated risk 15 Jun 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.
Chinese P2P giant Lufax dodges valuation bullet 15 Jun 2018 A mooted private fundraising of more than $1 bln makes sense. With regulatory change coming to peer-to-peer lenders, floating now could upset Beijing, and might only be doable at a bargain price. Abundant venture capital offers a way to keep growing without a distracting IPO.
Xiaomi IPO escalates China’s battle of the bourses 15 Jun 2018 The handset-maker will now sell at least half of its mooted $10 bln offering in Shanghai. That is a blow to the other listing venue, Hong Kong, which changed its rules to woo more tech IPOs. The city will have to share a lot of this business with its two mainland rivals.