Year: 2019

U.S. exchanges have reasons to stay in their lanes

1 Aug 2019

ICE and CME show no interest in butting in on data outfit Refinitiv, the LSE’s $27 bln target. The NYSE owner is pushing into fixed-income data, while CME is dominant in futures. Exchanges may yet consolidate further, but the big players have plenty to do on their own turf.

Viewsroom: Is Beyond Meat worth a bite?

1 Aug 2019

The meatless-burger maker is the best-performing IPO of the year by far. Now insiders are selling stock early as the company deals with rising competition, regulations and even a potential pea shortage. Plus: Using wine goggles to look at Western firms’ joint ventures in China.

Refinitiv’s unequal exchange

1 Aug 2019

As the London Stock Exchange reveals plans to merge with data provider Refinitiv, run the numbers to see which of the target’s backers, Blackstone and Breakingviews parent Thomson Reuters, comes off best.

Gas-guzzlers undercut GM’s triple-zero goal

1 Aug 2019

CEO Mary Barra aims one day to nix pollution, crashes and congestion with electric and self-driving cars. But the $59 bln automaker relies on SUVs, pick-ups and the like for most of its profit and is delaying robo-taxi plans. Committing to lower emissions could provide a boost.

Thomson Reuters beats Blackstone in Refinitiv deal

1 Aug 2019

If the financial data provider clinches a $27 bln takeover by the London Stock Exchange, the buyout firm will make a handsome return. Yet an insurance policy designed to protect its downside works in its Canadian co-investor’s favour. Thomson Reuters may almost triple its money.

Brexit makes Carney less of a central bank oddity

1 Aug 2019

Bank of England boss Mark Carney is, like everyone, in the dark about whether Britain will crash out of the EU. Without that uncertainty, he might be tightening policy when peers are either easing or hinting they might. Being odd man out would be better than the current limbo.

Greece’s new PM needs to avoid banking own goal

1 Aug 2019

The fund that oversees state shareholdings in the country’s four big banks has been a force for better governance. Even so, recently elected Prime Minister Kyriakos Mitsotakis may decide to overhaul its leadership. A changing of the guard now would send the wrong message.

Father of Indian TV muddies deal transmission

1 Aug 2019

Subhash Chandra is selling 11% of Zee Entertainment to Invesco to pay down debt. The transaction values the top broadcaster at $5.6 bln and fends off a mooted Comcast-led bid. Shareholders miss out on a control premium and face more uncertainty before Zee can realise its value.

LSE’s data download needs growth to add up

1 Aug 2019

The stock exchange operator confirmed its $27 bln takeover of financial information provider Refinitiv. To earn an adequate return on investment, CEO David Schwimmer will have to cut costs, but also find new sources of revenue. LSE shareholders’ expectations are already high.

Barclays takes out insurance policy to meet target

1 Aug 2019

Lower revenue and higher costs led to a 15% first-half drop in underlying pre-tax profit. The bank’s UK division faces tough times and will be less likely to offset dour performances in trading. CEO Jes Staley is pledging more cost cuts to hit a 9% annual return target.

StanChart’s Winters makes best of a weak hand

1 Aug 2019

The emerging market bank is growing, helped by trading revenue and falling impairments. But currency swings, a trade war and rate cuts make Bill Winters’ targets harder to hit. Investors probably shouldn’t begrudge him a salary that's a sliver of what he could have had elsewhere.

European oil majors’ gas lifeline could be a noose

1 Aug 2019

Royal Dutch Shell and Total rely on gas for future growth. That’s greener than oil, but weak second-quarter results show the drawback of their exposure. More importantly, longer pay back times than shale projects may help explain why the pair trade at a discount to U.S. peers.

Rio’s shiny profit masks a less lustrous reality

1 Aug 2019

The miner reported solid earnings, seasoned with a $1 bln special dividend. The detail is a bit more tarnished: iron ore operations are feeling the strain from years of cuts, and a Mongolian mine has underwhelmed. Investors love cash, but Rio also needs to invest in what it has.

Victor Li is a half mark up on Hong Kong’s tycoons

1 Aug 2019

Political unrest is a threat to top conglomerates with a big focus on the Fragrant Harbour. Earnings at Li’s CK Hutchison put a spotlight on the group’s shift away from the territory. Global growth is slowing and currencies are volatile, but a diversified bet still looks better.

China’s best-case trade deal looks worse and worse

1 Aug 2019

Negotiators have wrapped up another round of talks in Shanghai without result. A ceasefire was brokered in June but Trump no longer seems enthused about a quick compromise that might expose him to criticism. Unfortunately, a lacklustre economy means time is not on Beijing's side.

Banking tests Jack Ma’s lemons-to-lemonade skills

1 Aug 2019

China makes life deliberately hard for online lenders like MYbank, backed by Alibaba's founder. The bank is now raising capital, but what it really needs are elusive deposits. Still, MYbank is growing and profitable, and Ma has experience at being the financial underdog.

Carlyle a late but welcome arrival at C-Corp party

31 Jul 2019

The U.S. buyout firm is finally joining rivals in ditching its partnership for a corporate structure. Better yet, it’s giving shareholders voting rights, unlike its peers. Insiders retain control, but it’s a governance improvement that widens the potential market for its shares.

Jerome Powell finds another way to please nobody

31 Jul 2019

The Fed chief presided over a quarter-point interest-rate cut on Wednesday, disappointing investors, presumably the president, and even some colleagues. Most people have enough worries, real or not, to want lower borrowing costs. Most economic statistics, though, say not yet.

Hadas: Gratuities reach an economic tipping point

31 Jul 2019

Customers like to reward good service. But food delivery service DoorDash’s now-abandoned policy of pocketing tips shows how generosity has become subservient to optimising profit. Fairer wages and clearer prices might work better.

U.S. strength gives Fiat Chrysler an M&A breather

31 Jul 2019

The $21 billion Jeep maker is braving the car market downturn better than rivals. Record results in the key North American market produced better-than-expected operating profit. That gives boss Mike Manley headroom to cut costs while keeping an eye out for potential partners.

GE turnaround is barely past stalling speed

31 Jul 2019

CEO Larry Culp upped the $92 bln conglomerate’s earnings outlook a tad. But costs are up, revenue down, the power business looks drained and the grounding of Boeing’s 737 MAX could deplete cash by $1.4 bln this year. What progress there is doesn’t add up to a convincing recovery.

Old Mutual row shows merit of the quiet CEO payoff

31 Jul 2019

The South African insurer’s shares lost 5% after sacked boss Peter Moyo convinced a court he should get his job back, at least temporarily. A public slanging match looks damaging for all concerned. There’s a reason why warring boards and bosses usually settle disputes quietly.

European trader laggards’ energy boost has legs

31 Jul 2019

Higher investment banking results drove year-on-year rises in Credit Suisse and BNP Paribas’s quarterly earnings. Euro-denominated debt issuance hikes and the scope to pick up business from ailing Deutsche Bank are tailwinds. They could help erode the banks’ valuation discounts.

Prada’s independence hinges on green millennials

31 Jul 2019

As creative guru Miuccia turns 70, the fashion brand’s stock sits 35% below its IPO price. To return there Prada needs Gucci’s sales growth and LVMH’s margins. Unless neophyte 31-year-old son Lorenzo’s renewables push enthuses his peers, it may not stay independent.

Lloyds’ PPI tragicomedy has suitably shambolic end

31 Jul 2019

The UK bank set aside way more than expected for missold insurance compensation. Since 2011, Lloyds has consistently underestimated how much these payouts will be, and how long they will last. The claims will finally stop next month, but the hit to its credibility will linger.

EssilorLuxottica M&A invites sharp antitrust lens

31 Jul 2019

The $58 billion eyewear giant’s merger was waived through last year by regulators. But its purchase of Dutch optical retailer GrandVision risks curbing competition. It could promise to permit opticians to offer rivals’ products or sell some shops to a peer to help allay concerns.

Nomura feels the happy effect of a low base

31 Jul 2019

The ailing Japanese brokerage turned in a strong performance in its markets division, which is in the middle of a restructuring. What’s encouraging is that it happened as big U.S. rivals said business was limp. Boss Koji Nagai’s efforts to turn Nomura around may be bearing fruit.

Japan’s banks could use a dose of kind cruelty

31 Jul 2019

As companies slow investment and the central bank talks looser monetary policy, lenders like $62 bln Mitsubishi UFJ look poorly positioned to defend Japan against a slowdown. Tokyo may have to hurry through harsh medicine, including sector consolidation and even taxing deposits.

Japan dims hopes of a Samsung memory chip rebound

31 Jul 2019

Shares of the $260 bln tech giant slid after the company warned of poor visibility into the impact of Tokyo's export curbs. South Korea’s escalating dispute with its neighbour threatens supply chains. It now throws into doubt Samsung's confidence that chip prices will recover.

China’s next debt jitters will be among households

31 Jul 2019

Worries over bad loans are concentrated in the corporate sector but families are taking on borrowings at about twice the rate of overall economic growth. The relentless increase is unsustainable. As other engines sputter, consumers may not be a reliable fallback for Beijing.