Month: November 2017

Full-fat valuation suits Vietnamese dairy giant

21 Nov 2017

Vinamilk stock is up 48 pct this year, valuing it at $12 bln. It helps that regional investors Fraser and Neave and Jardines are building big stakes. But even if no takeover follows, the group stands to benefit from booming consumption in one of the most promising corners of Asia.

Randall Stephenson makes his last stand

20 Nov 2017

The AT&T boss is fighting U.S. regulators who sued to block his $85 bln merger with Time Warner. Faced with similar opposition six years ago, he gave up a $39 bln tilt for T-Mobile US. This time he has left no room for retreat. Anything less than all-out victory would be fatal.

Mastering effluent can make a financial splash

20 Nov 2017

Some 80 pct of global wastewater goes untreated, causing health and other societal problems. That leaves untouched 1 trln gallons of sludge that could be harnessed for energy, fertilizers and reusable water. With a potential fivefold return, investors need not hold their noses.

Powell’s mystery Fed board poses continuity risk

20 Nov 2017

As expected, Janet Yellen will leave the U.S. central bank when her successor takes over. Jay Powell will inherit a skeleton board in need of four more Trump appointees. The lack of holdovers, amid a pivotal shift away from crisis-era policies, could make for a bumpy transition.

Market will trump politics on Keystone pipeline

20 Nov 2017

Nebraska’s green light for the controversial project is a victory for President Trump but doesn’t guarantee it will be built. Years of delays have let rivals steal a march while low prices sap interest in drilling Canadian oil sands. The economic grounds for proceeding are soft.

Patrick Drahi’s Altice faces tricky debt detox

20 Nov 2017

The tycoon’s telecom group has lost 40 pct of its value following weak results in France. The group is now pledging to cut its 50 bln euro debt pile and sell assets. Yet rising rates, growing competition and a complex financial structure leave Drahi little room for error.

LSE boardroom brawl will produce only losers

20 Nov 2017

Activist TCI wants to oust bourse Chairman Donald Brydon and reverse the departure of CEO Xavier Rolet. The board is preparing a public explanation for Rolet’s exit, perhaps including salty details. Directors, executives, shareholders and the exchange itself will all look bad.

Mugabe will cast a long shadow over Zimbabwe

20 Nov 2017

The 93-year-old ruler is likely to be impeached after nearly four decades in power. He bequeaths an economy in urgent need of reforms. The most important – attracting foreign investment and restoring trust in the currency system – will happen over years, not weeks.

Uber-Volvo deal scrapes self-driving surface

20 Nov 2017

Providing 24,000 vehicles for the ride-hailing service’s autonomous fleet could pump $1 bln into the Swedish carmaker’s tank. While a decent chunk, the car industry of the future ought to generate multiples of that from running robo-taxis and selling a plethora of other services.

Marvell suits up well for growing chipmaker wars

20 Nov 2017

The value of cost cuts easily covers the premium in its $6 bln offer to buy rival Cavium. The deal also welds together two sets of mostly complementary business, strengthening the combined company’s portfolio. That should set it up well for further M&A in a consolidating market.

Merkel’s weakness could give Europe strength

20 Nov 2017

The collapse of coalition talks will force German Chancellor Angela Merkel to weigh other options. Another grand coalition or a minority government would be preferable to new elections. Revamping the euro zone will be easier without the Free Democrats opposing fiscal integration.

Italy’s problem banks defer profitability question

20 Nov 2017

Shareholders in Carige have pulled the mid-sized lender back from the brink by backing a 560 mln euro cash call. That’s a relief for taxpayers. But the bank’s high cost base will weigh on its attempts to return to the black. A new owner may be needed to push through deeper cuts.

Toshiba’s fresh funds provide for hard reboot

20 Nov 2017

The ailing Japanese group is raising $5.3 bln, or nearly half its market value again, by selling new stock. That ensures it avoids delisting. Buyers must see value in Toshiba’s residual interest in memory chips, plus the potential for turnaround elsewhere.

China shadow banks feel stronger central bank grip

20 Nov 2017

Beijing has put fresh restraints on the $15 trln market for asset management products, a useful but risk-prone part of the financial system. The rules will squeeze profits at those lending to rickety clients. They show the central bank's growing authority over other regulators.

Alibaba deal guides grocers to checkout

20 Nov 2017

The e-commerce goliath is buying over a third of Chinese supermarket owner Sun Art for $2.9 bln. It underscores how food marks a pivotal retail battleground. And for Alibaba to secure the stake at a 24 pct discount suggests its brick-and-mortar rivals see the writing on the wall.

Viewsroom: AT&T’s $85 bln deal runs into static

17 Nov 2017

The telecom firm’s acquisition of Time Warner, owner of CNN, may hit regulatory hurdles in D.C. President Trump’s caustic tweets against the news network look self-interested, but watchdogs could yet legitimately rethink norms of competition. Plus: GE searches for a way forward.

Review: The next fight for Latin America’s soul

17 Nov 2017

Dictators and demagogues have come and gone; progress in the region has been impressive. Still, rule of law and effective institutions still lack, Michael Reid writes in "Forgotten Continent." That makes the next steps toward prosperity harder.

Tesla takes crowdfunding to 250 mph

17 Nov 2017

Elon Musk’s money-losing $53 bln electric-car maker unveiled a surprise new Roadster model while showing off a battery-powered truck. Pre-orders for the first-edition supercar, available in 2020, may raise $250 mln up front. It’s a reminder of Tesla’s constant thirst for capital.

Carillion meltdown shows risk in return-free world

17 Nov 2017

Creditors of the UK construction group face losses in a looming restructuring. The company expanded too fast and took on risky contracts. Meanwhile, BBB-rated Veolia is borrowing at sub-zero yields. Investors should remember that even central banks can’t make default impossible.

Chinese authorities throw down gauntlet to HSBC

17 Nov 2017

Scrapping the limit on foreign bank ownership could in theory enable the lender to raise its 19 percent stake in Bank of Communications. But tying up more capital in China’s fifth-largest bank looks inferior to HSBC’s own expansion plans. Better to sell and redeploy the proceeds.

Northern Ireland is Brexit’s Gordian knot

17 Nov 2017

Avoiding a hard border in the region is an aim of all sides in the Brexit talks. The least-worst fix is for Europe to treat Northern Ireland the way it does Norway. That’s only possible if pro-UK politicians in Belfast can be made to see the economic necessity.

Vivendi doubles down on video-game mystery

17 Nov 2017

The French media group won’t buy the rest of Ubisoft in the next six months, but nor has it said it will sell its 27 pct stake. It may even forgo voting rights to avoid making a bid. That leaves investors guessing as to its long-term plan, and marking down the stock accordingly.

India rating upgrade confirms Modi on right track

17 Nov 2017

Moody's unexpectedly upgraded the country's credit rating for the first time since 2004, in a major boost to Premier Narendra Modi. This recognises that, despite short-term disruption and some negative sentiment, recent reforms will fundamentally improve the economy.

Fox hunt gives Murdoch rare chance to play defense

16 Nov 2017

The acquisitive media mogul who once put Dow Jones into play now finds himself a target. Comcast, Verizon and Disney want portions of the Fox empire. Rupert Murdoch has been an able hunter, but if he's reluctant prey he may need protection from reinvigorated U.S. trustbusters.

Gender bonds are more than feel-good investments

17 Nov 2017

Investors have flocked to the first-ever U.S. dollar bond promoting equality at work. They are smart to do so. It's more than good PR at a bad time for the war of the sexes. Given the correlation between moral behaviour and sound returns, the bigger issue is lack of supply.

Sandell asks Barnes & Noble to pick an adventure

16 Nov 2017

Flip to chapter “flimsy proposal” to see the activist try a buyout of the struggling bookstore chain without financing. Turn to chapter “worse than before” to trade liquid stock for private shares without founder backing. Stay here if you don’t want to see how this story ends.

Cox: Amazon to become biggest impact investor ever

16 Nov 2017

Jeff Bezos' $550 billion creation has become a Shiva-like force, threatening whole swaths of the retail industry and its jobs, while paying a relative pittance in taxes. By choosing a second HQ in 2018 where it's needed most the company can forestall a social and state backlash.

DOJ warns dealmakers that a new sheriff is in town

16 Nov 2017

Antitrust chief Makan Delrahim isn’t a fan of behavioral remedies like the ones Comcast made to buy NBC. In his first major policy speech, he said he prefers divestitures to address competition issues. AT&T’s bid for Time Warner wasn’t cited, but he’s clearly ready for a fight.

Norway’s oil exit is a wake-up call for industry

16 Nov 2017

The country’s $1 trln sovereign fund wants to unload oil and gas stocks for diversification. It makes sense given the state’s dependence on fossil fuels, but the world’s biggest equities holder is sending a broader signal: petroleum majors need to prepare for a low-carbon future.

Third time might be a charm for Time

16 Nov 2017

Publisher Meredith is reportedly again in talks to buy the owner of Time magazine, along with the Koch brothers. A deal could pass financial muster, based on the market’s reaction last time around. And the conservative billionaires may be less focused on monetary returns anyway.