Year: 2019

Amazon can afford to give Big Apple one more shot

11 Feb 2019

The e-commerce giant’s plan for a second HQ is in jeopardy over local opposition. One idea would be to give up half of the $3 bln in incentives. Amazon can afford it, and rival Google created jobs for less. If that doesn’t quiet the critics, Amazon may be better off elsewhere.

The Exchange: Huawei’s U.S. security chief

11 Feb 2019

Andy Purdy, who previously worked in academia and for the U.S. government, talks about the geopolitical edge to allegations about Beijing’s influence at Chinese tech group Huawei, and how communications equipment needs global standards and better testing across the board.

China may help T-Mobile and Sprint win over D.C.

11 Feb 2019

The proposed $26 billion merger of the U.S. telecom firms is rooted in the promise of a 5G buildout. The deal will reduce competition. Yet America’s race with the PRC to take the lead in the next generation of mobile technology could overcome any domestic competition concerns.

Jerome Powell’s boon is Mario Draghi’s bane

11 Feb 2019

Inflation in the U.S. and the euro zone is easing and looks set to subside further. That will help the Federal Reserve boss justify a pause in rate hikes, but is a headache for his European Central Bank peer who has yet to tighten monetary policy and has less room to manoeuvre.

Smith & Nephew $3 bln spinal deal is a backbreaker

11 Feb 2019

The medical services group’s shares fell on a report that it may buy U.S. surgery specialist NuVasive. A takeover would take the company into a market it doesn’t know, and need years to pay off. New CEO Namal Nawana would do better to focus on smaller, less risky M&A.

Just Eat could prove a tasty M&A morsel

11 Feb 2019

The 4.9 bln pound UK food-delivery group is leaderless and faces an activist investor. It could keep investing in its delivery services to fend off Uber, but peers like Takeaway.com and Delivery Hero are doing the same. Just Eat’s cut-price valuation could force the board’s hand.

Norwegian investors only winners in bourse battle

11 Feb 2019

Euronext has hiked its bid for Norway’s stock exchange to $785 million. The hefty premium may no longer cover expected cost savings, and does not guarantee a victory against rival bidder Nasdaq. Shareholders in the Oslo exchange are beneficiaries of the larger groups’ largesse.

London’s after-Brexit party will be dreary affair

11 Feb 2019

Property prices in the capital have stuttered since the 2016 referendum. If Prime Minister Theresa May can avoid a chaotic exit, investment may pick up. Yet a rising pound will discourage some foreign punters. And political and economic uncertainty will linger.

Japan’s foreign invaders could use domestic allies

11 Feb 2019

From sumo rings to convenience stores to boardrooms, immigrants are changing the way the world’s third-largest economy works. Their presence is politically awkward, but demographically essential. Policies that internationalise Japanese citizens would help ease the transition.

India’s tech rules are taking on a Chinese quality

11 Feb 2019

New Delhi's plan to compel the likes of Facebook and Google to police their content threatens free speech. Coming after edicts that limit foreign e-commerce giants, there is a touch of the People's Republic that will worry global players relying on the subcontinent for growth.

Boeing can afford a business upgrade

8 Feb 2019

The $225 bln aerospace firm is considering whether to build a new jet. It stumbled with the 787 a decade ago. Since then, boss Dennis Muilenburg has fixed production snags, and customers are in better shape. A new wide-body could boost Boeing’s lead over Airbus.

U.S. auto tariffs may force trade-war ceasefire

8 Feb 2019

Talks with Europe and Japan are not going well, increasing the odds of the White House taxing their vehicle imports. The possible $42 bln sales hit and 200,000 lost jobs would hurt voters in a way Trump’s overall tariff tirade hasn’t. That may finally prompt lawmakers to wake up.

Review: Howard Schultz, the author, is a winner

8 Feb 2019

The former Starbucks chief’s tough boyhood and corporate rise inspires in “From the Ground Up.” Workers helped by his policies are also stirring. But this message is oddly absent from his White House rollout. The candidate needs to harness his business success more effectively.

China bling scare was healthy reality check

8 Feb 2019

Birkin bag maker Hermes reported strong fourth-quarter sales momentum in the Middle Kingdom, echoing rival LVMH and easing fears of a slump in Chinese demand that hit luxury shares last year. Yet valuations were probably too high. The correction is welcome.

African miners get mix of red carpet and red card

8 Feb 2019

The continent can’t work out whether to shake hands with the sector, or shake its fist. Warm welcomes from Ghana, South Africa and Ethiopia contrast with the aggressive resource nationalism of Tanzania. A nasty slowdown there would bolster the open-door approach.

Sony’s record share splurge misses the big picture

8 Feb 2019

Fresh from reporting lacklustre earnings, the electronics giant says it will buy back nearly $1 bln worth of stock. It’s a sign of boss Kenichiro Yoshida’s confidence. To boost longer-term returns, though, he needs to convince investors a much-needed overhaul is also underway.

China’s property giants have a decent foundation

8 Feb 2019

Evergrande and other developers are tapping pricey offshore markets to refinance $98 bln of debt maturing this year. Sales are slow, but prices are still rising fast enough for comfort. Things will look even better if officials ease curbs as part of an economic stimulus package.

Viewsroom: U.S. water crisis may evaporate wealth

7 Feb 2019

Overuse and climate change are sapping the Colorado river, source of a fifth of U.S. GDP and at least $1.3 trln of market value. The feds and basin states are struggling to adapt, but investors pay little heed. Plus, can India Prime Minister Modi’s budget help him win re-election?

U.S. Green New Deal is at least a big idea

7 Feb 2019

The progressive Democrat plan envisages sweeping measures to combat climate change and a raft of social ills. It’s vague, flawed and hotly opposed by Republicans. But backer Alexandria Ocasio-Cortez has a knack for getting noticed – and a serious environmental debate is overdue.

L’Oréal can save up to buy out Nestlé

7 Feb 2019

Buoyant demand from Chinese shoppers boosted the cosmetics giant’s sales and margins in 2018. The Lancôme owner’s growing 2.8 billion euro net cash pile may seem an unnecessary indulgence. But it will come in handy if Nestlé gives in to pressure to reduce its 23 pct stake.

Market ignores Colorado river crisis at its peril

7 Feb 2019

The waterway supports at least $4 trln in GDP and $1.3 trln in stock value across seven U.S. states. Declining flows are worsened by rising temperatures, and screwy governance makes basin-wide planning hard. Now the feds are stepping in. Yet investors have barely caused a ripple.

Twitter’s destiny is to be a profitable niche

7 Feb 2019

The social-media firm enumerated its daily users for the first time – 126 mln and rising. It will stop reporting monthly users, which are falling. Twitter may be nearing maximum size, but its odd mix of conflict and content is doing a good job of retaining devotees.

Franco-Italian diplomatic row may taint economics

7 Feb 2019

Paris recalled its ambassador in Rome to protest what it called baseless attacks. The fracas may hurt the countries’ ability to present a united front on revamping fiscal rules or bank reform. That would be a costly consequence of short-term electioneering before a European vote.

Chevron climate pay plan may get more out of less

7 Feb 2019

The $230 bln oil giant is tying compensation to emissions cuts. The details may seem less ambitious than Shell’s, and pay is still partly linked to production. But the scheme targets methane, includes most Chevron workers and sets a potent challenge for U.S. rivals.

Big U.S. lenders school industry on M&A

7 Feb 2019

BB&T’s $28 bln offer for SunTrust is the largest bank deal in a decade and the first to create a new lender regulators regard as systemically important. It should please investors on both sides - so long as the banks don’t take their eye off the digital-banking ball.

Fiat needs some driving support

7 Feb 2019

Shareholders wiped 10 pct off the Italo-American carmaker’s value after it forecast a weak 2019. Europe, in particular, is a concern. But It’s not the only carmaker struggling in the region. That should give CEO Mike Manley a chance to strike a partnership, the sooner the better.

Total can pay up for Eneco – and may have to

7 Feb 2019

The French oil major could well bid for the Dutch utility. As annual results show, it has the financial heft to pay a big premium. Yet so does Shell, which is equally keen to diversify into power – and with the potential trump card of home advantage.

Pernod Ricard half answers Elliott critique

7 Feb 2019

The spirits maker converted more sales into operating profit in the second half of 2018, and promised higher growth and more savings. That addresses some of the activist investor’s concerns. But it glossed over worries about the family-dominated board lacking outside perspective.

Ad groups’ growth spin is a marketing flop

7 Feb 2019

Publicis shares fell 11 pct after a bad fourth quarter. Along with peers like WPP, the French group is priced at a hefty discount to other media companies despite its promise to boost sales. The relentless shift of advertising spending to tech giants means scepticism is deserved.

Spluttering SocGen undone by its own complacency

7 Feb 2018

France’s No.2 lender has reduced 2020 profit targets blaming low interest rates. That undercuts boss Frédéric Oudéa’s strategy based on revenue growing faster than expenses. Cuts to the misfiring investment bank will only go so far. A capital shortfall is now a bigger concern.