Year: 2019

BHP boss makes himself tougher act to follow

20 Aug 2019

The miner reported a record $3.9 bln final dividend alongside its highest earnings in five years. Even as CEO Andrew Mackenzie conserves cash ahead of economic clouds and the end of his tenure, he has fulfilled shareholder return pledges. Any successor will face harder choices.

It is too soon to call a bottom on Baidu

20 Aug 2019

Despite a 62% decline in quarterly profit, the $36 bln Chinese internet company gave investors something to cheer with unexpected growth in video. Its main search business is hurting, though, and the ad outlook is weak. ByteDance and Meituan Dianping are coming for Baidu, too.

Li Ka-shing raises fresh glass to diversification

19 Aug 2019

Hong Kong’s richest man is buying the Greene King pub chain for $5.6 bln including debt. Most of his empire’s sales are abroad already. But given the deal injects new capital into the UK, it’s still a boon for Brexit Britain and a minor thumbs-down for his troubled home turf.

American CEOs may be half way to enlightenment

19 Aug 2019

The Business Roundtable touted a pledge by corporate leaders to run companies more for the greater good as if it’s a new era. In reality, shareholder primacy has reached a natural limit. Such promises, however, require concrete steps. One might be breaking down CEO primacy, too.

Holding: Are white-collar prosecutors going soft?

19 Aug 2019

That’s the implication of declining U.S. demand for defense lawyers. It’s possible corporate America is finally behaving itself. More likely, though, the dearth of cases against banks and other companies means enforcers are both turning a blind eye and chasing different prey.

SoftBank skin in the game risks major organ damage

19 Aug 2019

CEO Masayoshi Son and his dealmakers could contribute a chunk of the capital for Vision Fund 2, according to reports. Aligning staff and investors’ incentives is one thing. But since SoftBank would lend them the cash, its own losses would be magnified if the tech vehicle flops.

Green bond purists overlook benefits of grey

19 Aug 2019

Companies that pollute can sell debt with an eco-friendly tag if they ringfence the money for climate-conscious projects. Critics call this “greenwashing”. But the extra transparency asked of borrowers is useful. So is an injection of ethical thinking into corporate treasuries.

Chinese tourists’ reverse-Marco Polo is no fluke

19 Aug 2019

The flow of visitors from the Middle Kingdom to Italy has jumped. That is the reward for becoming the People’s Republic’s new best European friend. The Communist party uses its $315 bln outbound tourism market to exercise soft power, helping friends and punishing foes.

China’s rate reform inches along the market path

19 Aug 2019

The central bank is shaking up loan pricing, pushing aside a long-standing benchmark set by officials. It’s an overdue step designed to ease credit conditions and help companies borrow. Transmission problems remain, but a move closer to a more responsive system is welcome.

Baht’s brawn weakens sick man of Southeast Asia

19 Aug 2019

Thailand’s $500 bln economy expanded at its slowest rate in nearly five years last quarter, hit by cooling exports and tourism. Yet its currency is an outperformer, aggravating both problems. Lower rates and public spending could weaken it, as might investing more funds abroad.

Wall Street adds $125 bln to recession conundrum

16 Aug 2019

That’s the market value lost by the top five U.S. investment banks in just three weeks, leaving only JPMorgan trading above book value. History suggests it’s an early investor bet on a downturn. But as with the yield curve, the fallout from the last crisis distorts the message.

American CEO pay inflation is down but not yet out

16 Aug 2019

A new study shows top company bosses made 278 times an average employee’s pay in 2018 – a quarter less than the 2000 peak. At this rate, it will only take another 50 or so years to get back to the 30 times ratio of 1978. There might be an anti-elite revolution before then.

Dell cleans house further with pivot on Pivotal

16 Aug 2019

Michael Dell’s dealings have left investors mistrustful and owning bits of three overlapping listed firms. Having one, the $58 bln VMware, buy another, Pivotal Software, simplifies things at a reasonable price. The lack of direct benefit for Dell himself may be a selling point.

Cathay shakeup clarifies China’s corporate muscle

16 Aug 2019

Boss Rupert Hogg and a top deputy resigned abruptly after the $5 bln airline scrambled to quell a mainland backlash related to Hong Kong protests. State carrier Air China owns a smaller stake than Swire, but Beijing’s sway looks bigger. The timing couldn’t be worse for Cathay.

Cox: Let’s just get on with the recession already

16 Aug 2019

After the longest unbroken recovery following the severest financial crisis in generations, markets are super-jittery about a possible slowdown. But with few exceptions (G’day Australia), resets are normal. They can curb unhealthy excesses, preventing bigger problems later.

SoftBank’s Saudi substitute is a head-scratcher

16 Aug 2019

CEO Masayoshi Son thinks he can raise $108 bln for his second Vision Fund without the Gulf state which bankrolled the first. Yet the numbers make it hard to see how he will do so. They imply either a big corporate or a Kazakhstani fund is writing an unexpectedly large cheque.

Russia’s En+ swaps one U.S. headache for another

16 Aug 2019

The Rusal holding company escaped punitive Washington sanctions in the first half. But Donald Trump’s trade war pummelled aluminium prices, leading to a sharp drop in EBITDA. Investors face a long wait to get anywhere near their 2017 IPO price.

Unrest is recurring cost of Hong Kong’s stinginess

16 Aug 2019

Since demonstrations rocked the city in 2014, economic roots of dissatisfaction have worsened. Housing prices rose, tycoons’ dominance increased, and officials made token gestures while hoarding fiscal reserves. Today’s protests are political, but inequality feeds the flames.

Nio flashes warning for China’s luxury car market

16 Aug 2019

A co-founder of the $3 bln Tesla wannabe has quit, the latest in a string of departures. It comes after battery fires and other strategic missteps at the electric-vehicle maker. But its woes may also portend slowing premium demand: that should worry peers.

Viewsroom: WeWork unfurls the red flags

15 Aug 2019

The shared-office provider’s long-awaited IPO filing is packed with pointless life-affirming tropes. But it also details a host of conflicts of interest and other risks that should send investors running. Plus: India’s powerhouse Reliance is building a war chest for dominance.

GE has more to lose from whistle-blower

15 Aug 2019

A man who warned about Bernie Madoff’s Ponzi scheme accuses the conglomerate of hiding $38 bln in losses. GE’s history of opaque reports and belated write-offs have tarnished its credibility. The stock’s 10% drop implies investors give the claims only partial credence – for now.

Walmart proves it’s a port in gathering storm

15 Aug 2019

Strong sales last quarter, especially in e-commerce, allowed the $300 bln giant to sail past growing headwinds battering retail rivals. It may even be able to withstand more Trump tariffs. And in a broader downturn, CEO Doug McMillon could pick up more price-conscious shoppers.

Alibaba gets tailwind from Beijing stimulus

15 Aug 2019

Better-than-expected quarterly results from Jack Ma's $420 bln e-commerce empire show Chinese consumers are still spending amid slowing economic growth and a trade war. Tax cuts boosted earnings at rival JD.com. Lower levies will also help keep Alibaba's momentum going.

Germany would kill a few birds with one green bond

15 Aug 2019

Raising ring-fenced money to manage a shift away from fossil fuels would underscore Berlin’s focus on making the transition. It would also give eco-friendly finance a boost. And ideally, the government would exclude spending on a greener future from its balanced budget goal.

Carlsberg can relax with a brew in second half

15 Aug 2019

Unlike larger peers AB InBev and Heineken, the Danish brewer’s recently increased year-end targets look easy to reach. Still, the end of a cost-cutting programme may bring slower gains in profitability. After strong share price gains, the beer maker’s valuation has enough fizz.

Dutch insurer revisits ghosts of low yields past

15 Aug 2019

Despite hiking its dividend, Aegon’s shares dived after a sharp drop in solvency. That revives bad memories of the insurer’s volatile capital a few years back. Incoming CEO Lard Friese’s first job is to show investors he’s better at managing the group as low rates bite once more.

Iron ore feels the pinch of Beijing’s restraint

15 Aug 2019

Prices of the steel ingredient have cooled, as a supply squeeze fades but a hoped-for Chinese boost to demand remains elusive. Mainland growth is lacklustre, but construction has yet to rev up in response. Stimulus this time may not mean more bridges: bad news for Rio and peers.

Luckin Coffee waters down its strategy

14 Aug 2019

Starbucks' money-losing Chinese rival burned more cash in its first quarter since its IPO as marketing costs popped. It’s diversifying into tea, vending machines and the Middle East, suggesting less confidence in its original plan. But investors are still on a caffeine high.

Viacom-CBS is the Rip Van Winkle of TV

14 Aug 2019

The two firms split 13 years ago to extract value and boost growth. That plan failed, while peers got larger like Disney, or sold like Fox. A reunited Viacom and CBS can best shake off its slumber by amassing a portfolio of great shows to sell to more established video streamers.

U.S. recession signal bears clear fingerprints

14 Aug 2019

A key bond-market metric flashed a downturn warning last seen in 2007, hammering stocks. Business confidence and investment are dropping, China is slowing and Germany’s output just fell. The common thread linking these is Donald Trump’s trade war. At least he’ll win lower rates.