Month: January 2020

Silicon Valley wakes up to financial independence

13 Jan 2020

Scooter-sharing outfit Lime is exiting cities and letting staff go in the hope of turning a profit. After WeWork’s nightmarish IPO failure, it’s not the only startup whose vision now includes making money. What’s old has become new for tech newbies, but growing up isn’t easy.

Siemens CEO’s climate blog sends semi-woke signal

13 Jan 2020

Joe Kaeser has admitted the 98 bln euro German engineer should not be working on Australia’s Adani coal mine, but cannot pull out. Creating a panel to vet deals for their greenness, and possibly nix them, is partial penance. The CEO’s public disapproval may be a better deterrent.

Geely’s European car collection is too eccentric

13 Jan 2020

The Chinese rescuer of Lotus and London black cabs might inject funds into Aston Martin, James Bond’s favoured ride. Founder Li Shufu had some success with Volvo, but with his home market under pressure, becoming a collector of genteel money-losers is an unwelcome distraction.

Mark Carney has reason to ease before he leaves

13 Jan 2020

The UK economy grew at its slowest annual pace since 2012 in November. The Bank of England boss has one more policy meeting left before Andrew Bailey takes over. Catching up with recent easing by the U.S. Federal Reserve and European Central Bank would be the best handover gift.

Aussie fires could be tipping point for carbon tax

13 Jan 2020

Horrendous bushfires are pushing CO2 emissions cuts ever further into the spotlight. The scope for sharp hits to earnings at domestic champions like airline Qantas has stopped Canberra properly pricing carbon before. But inaction is becoming increasingly unsustainable.

Taiwan’s revival is Tsai’s to squander

13 Jan 2020

The independence-leaning president has coasted into a second term on anti-Beijing sentiment and a strong $580 bln economy. Tsai Ing-wen can take credit for neither. After wasting an earlier opportunity, she now has another to fix poor infrastructure that threatens growth.

Sultan Qaboos’ legacy of peace looks safe for now

12 Jan 2020

Oman’s iconic leader is dead after a 50-year reign. The risk of upheaval has been eased by the appointment of his cousin, and regional tensions that have subsided in recent days. But the longer-term scope for weak finances to hit Muscat’s role as a key Gulf mediator remains.

Casper IPO little better than cash in the mattress

10 Jan 2020

After investors snubbed WeWork’s over-complex IPO, here’s something simpler: a company that sells beds online. The trouble is that the “sleep economy,” while easy to understand, is littered with corporate nightmares. And regrettably, Casper shares WeWork’s penchant for claptrap.

Boeing CEO’s top task is to re-engineer culture

10 Jan 2020

David Calhoun knows the importance of a company ethos, after having a front seat at General Electric’s rise and fall. Disturbing messages released by Boeing show a multi-year overhaul facing him – refocusing the firm from profit to engendering trust and making great planes.

New York entertains a lesson in secession

10 Jan 2020

Staten Island may reanimate a 26-year-old bid to break away from the Big Apple. There are countless reasons not to, and the economic case is sketchy – but residents could back it anyway. New York’s “forgotten borough” is a fitting ambassador for a world that’s getting smaller.

Review: Greek crisis drama shows EU’s good and bad

10 Jan 2020

“The Last Bluff” tells how politicians and bureaucrats negotiated and bullied Alexis Tsipras, Greece’s prime minister, into submission in 2015. The book captures the strange excitement of complex negotiations, and the enduring appeal of the powerful but flawed European vision.

Rising fares squeeze Ryanair’s budget mantra

10 Jan 2020

The low-cost carrier lifted its full-year earnings forecast by 17% after a bumper holiday season. Boss Michael O’Leary can thank Thomas Cook’s demise and grounded 737 MAX planes for dearer tickets. But price hikes dent the halo of the self-appointed patron saint of cheap flights.

Benettons play risky game of chicken in road row

10 Jan 2020

Motorway operator Atlantia, part-owned by the Italian dynasty, is haggling with the government over toll fees following a 2018 bridge collapse. Betting that the fragile executive won’t cancel its concession could backfire. Besides, the $20 bln group can afford Rome’s demands.

Thailand’s capital markets are anything but sick

10 Jan 2020

Central Retail is raising up to $2.7 bln in a record IPO, putting the country on course to be top for new issues in Southeast Asia for a fourth year. As Thai Inc looks abroad for growth, helped by a strong currency, it’s a reminder that the market’s relative maturity has upsides.

Hong Kong bourse boss trusts in awkward necessity

10 Jan 2020

Charles Li has seen HKEX earnings plunge on political unrest as Beijing mulls alternative venues. Yet Li is confident China’s market inefficiencies will leave it dependent on Hong Kong’s financial plumbing in the end. The exchange’s reviving share price suggests investors agree.

Occidental CEO gets no deal peace from Middle East

9 Jan 2020

Rising Mideast tensions have lifted both the oil price and the $40 bln driller’s stock. But Oxy is still worth far less than before CEO Vicki Hollub’s pricey Anadarko swoop last year. With Carl Icahn agitating, she needs to boost performance, or risk being ousted.

BlackRock starts to tackle uneven climate record

9 Jan 2020

The world’s largest money manager is joining the planet’s biggest anti-pollution investor group. Larry Fink’s firm hasn’t always been a visible ESG champion – it even voted against the coalition’s proposals in the past. At least BlackRock is now hanging with the right crowd.

Private equity tries for the tech patriot premium

9 Jan 2020

Insight Partners is buying a Swiss cloud company for $5 bln, relocating it to the United States and replacing its Russian co-founders on the board. Veeam wants U.S. growth, and Insight will eventually want to sell or float the business. Making it more American can only help.

Hospital M&A adds to U.S. healthcare absurdity

9 Jan 2020

A merger wave has made highly-concentrated local markets for hospitals more so, while raising prices and lowering quality, according to a new study. With antitrust cops having only limited powers, hospitals – already 6% of U.S. GDP – will keep sucking more blood from the economy.

London’s new year IPO will buck sad 2019 trend

9 Jan 2020

KKR is looking to list one-quarter of its UK smart-meter group, Calisen. Last year the volume of London listings dipped as new offers were pulled and existing ones lurched. The strategic tailwinds behind Calisen’s sector should stop it being added to the pile of duds.

Euro zone bank rally is built on sand

9 Jan 2020

The bloc’s 20 largest lenders, such as BNP and ING, are worth $84 bln more than in October. Investors believe the ECB is now done with rate cuts, which squeeze profit. But renewed trade frictions could change such thinking. And rising capital requirements will weigh on returns.

IAG dealmaking will outlast Willie Walsh

9 Jan 2020

The Irishman is disembarking after nine years at the helm of the BA and Iberia owner. The holding structure he led from its birth has been more successful than Air France-KLM and makes it easier for his successor to go shopping, say for a carrier that flies to South America.

Royal couple test House of Windsor revolving door

9 Jan 2020

Harry and Meghan’s plan to step back seems a financial no-brainer: the pair’s commercial opportunities far exceed their small state income. Like ex-politicians in business, though, success derives from close ties to former public life. That means keeping Buckingham Palace sweet.

Gulf’s long-serving ruler is ailing at a bad time

9 Jan 2020

Oman’s Sultan Qaboos is ill. For 50 years the iconic leader has positioned his realm as a neutral Gulf player. If he dies as the Iran crisis rages, an opaque succession process and shaky finances could deprive a fractious region of a key backchannel when it’s most needed.

UK grocery war will be fought on more than prices

9 Jan 2020

Tesco’s local sales barely rose over the festive period. Like other big peers, the 25 bln pound company lost market share to discounters such as Lidl. Improving online services and stocking sought-after premium goods may do more to halt the rot than selling products more cheaply.

China’s Ucommune may have missed WeWork IPO memo

9 Jan 2019

The country's biggest shared-office outfit is gearing up to go public after its U.S. peer flamed out. A $2.6 bln private valuation implies a similarly punchy 13 times estimated sales. And like WeWork, Ucommune rents from its entrenched founder. A down-round or worse probably awaits.

Infrastructure investors catch the tech bug

9 Jan 2020

Macquarie may be in talks to buy AirTrunk for over $2 bln. It follows a record year for data centre M&A which saw volumes triple. Growing consumption of the new oil is fuelling demands for storage warehouses. And the hunger for yield is building up towering multiples.

Viewsroom: Hong Kong’s uncertain 2020

9 Jan 2020

Political unrest continues to roil the financial hub. For investors, though, it’s mostly business as usual as markets take protests in their stride. As Beijing replaces its top representative in the city, and makes other changes, that uneasy balance may be hard to sustain.

Tesla’s lucrative mode enabled

8 Jan 2020

Elon Musk’s electric-car maker is now worth $89 bln. That requires some hefty assumptions, not least on annual car sales. Shift the numbers up and down to see how many Tesla needs to deliver to justify its racy valuation.

Tesla valuation speeds into ludicrous mode

8 Jan 2020

The electric-car maker is worth $89 bln after finally hitting one of CEO Elon Musk’s targets. Tesla’s future is rosier than a year ago. But the valuation means believing it’ll soon sell 3 mln vehicles a year, an eightfold increase, or be a robo-taxi giant. Neither is realistic.