Corporate Governance

Hong Kong will ride China bulls beyond stampede

2 Feb 2021

A market frenzy has made the city’s stock exchange the world’s biggest at $82 bln and helped online broker Futu’s shares more than double this year. Valuations are frothy, but mainland rule changes should gird both the bourse and traders when momentum subsides and bubbles pop.

Leon Black report shoves Apollo in right direction

26 Jan 2021

The private equity firm unveiled shareholder-friendly changes following an investigation into its co-founder’s ties with Jeffrey Epstein. Plans to eliminate supervoting rights and separate Black’s CEO and chairman roles boosted shares. His full retirement would be better still.

Corona Capital: U.S. jobs, Covid-19 tests

8 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: The U.S. job recovery is stalling as the pandemic surges, increasing the chances of more stimulus; a Covid-19 testing startup may be the reason for a rise in cases in Los Angeles.

Team Trump should be an ESG red flag

7 Jan 2021

It’s common for former U.S. officials to pop up on company boards. But cabinet members who stuck by the president as he rejected the election result can’t be relied on to respect the will of shareholders. Investors who value governance should ensure the revolving door stays shut.

A big Chinese backer would be roll of dice for MGM

7 Jan 2021

Investor Snow Lake wants the casino operator to sell 20% of its $6 bln Macau business to a local buyer. There are merits to the idea, including the edge it could provide for a new licence in the world’s biggest gambling hub. It would also, however, complicate other deals.

HSBC breakup will turbocharge CEO’s Asian pivot

30 Dec 2020

Noel Quinn's plan to cut costs and shift assets away from America and Europe has failed to boost the bank’s shares. In 2021 he’ll have to opt for more radical moves, like selling the U.S. retail network and spinning off HSBC’s $15 bln UK arm. A higher valuation should follow.

BlackRock stretch goal: real shareholder democracy

29 Dec 2020

The $8 trln asset manager votes on behalf of millions of small investors. Rather than telling companies how to handle gun safety or climate change, BlackRock might do better to pass the decision to the ultimate owners. That calls for investment in new technology, and new habits.

Guest view: China’s role in emerging economy debt

24 Dec 2020

Developing nations, struggling to repay loans, are being slowly locked out of credit markets. Their plight is likely to worsen. But when it comes to resolving this looming crisis, China has been largely missing in action. It should be held to a higher standard.

Guest view: Woke markets present growing dangers

18 Dec 2020

The politicisation, and even weaponisation, of ESG investing is a concern, argues Frank Sixt, finance director at CK Hutchison. Exclusionary strategies are too prone to populist influence and ratings are chaotic. Absent quick changes, capital allocation distortions will rise.

Unilever inches head above climate change parapet

14 Dec 2020

The group will follow Spain’s Aena in granting investors a say on green transition plans. As with advisory votes on pay, letting shareholders take potshots at strategy is good governance. Unilever’s scope for strife is less than would be the case in a sector like oil, though.

Rio Tinto’s CEO search just got even harder

10 Dec 2020

A scathing government report over the Australian miner’s destruction of Aboriginal sites calls for sweeping changes. It portends a long slog to repair the $120 bln company’s reputation. Corporate governance and climate issues add to the daunting challenges concerning growth.

Sinovac deal is placebo to governance woes

7 Dec 2020

A unit of the Chinese company making the Covid-19 jabs rolled out by Beijing has won fresh funds pointing to a $3 bln-plus valuation for the scandal-hit parent. It’s cold comfort for owners of the U.S. stock halted since 2019, and reminder that the vaccine lead may not pay off.

India’s frugal crisis could prove a false economy

30 Nov 2020

A GDP contraction of 7.5% points to a faster-than-expected recovery, as manufacturing swung back to growth. Government stimulus has been tepid, however. That may yet lead to more harmful virus after-effects, unless India can capitalise on a vaccine edge it has over most nations.

Cox: Swiss firms get too global for local britches

27 Nov 2020

From ABB to Zurich, corporations extended their reach in ways that brought outsized pride and prosperity. Now a referendum might make them liable for human rights abuses abroad. Whatever the result, it’s a useful reminder companies need to avoid losing sight of their local roots.

Bigger DAX is still too small for Germany

24 Nov 2020

Exchange operator Deutsche Boerse is expanding the blue-chip benchmark by a third to 40 members. Including a larger slice of the country’s listed companies is a good thing. But given the ubiquity of family-owned mid-sized firms, investors are still missing much of the action.

Bond defaults hand Beijing a timely oversight test

19 Nov 2020

A surprise default by a state-owned coal miner has undermined confidence in the $2.7 trln triple-A market. Without tougher supervision of credit agencies, local officials, and company executives, President Xi Jinping’s fight against excessive leverage will pile on systemic risk.

Stingy copper buyout may tarnish Kazakh listings

17 Nov 2020

Two shareholders of 3 bln pound miner Kaz Minerals want to take it private. The offer looks low and premature, given uncertainty over the prospects of the Eurasian group’s biggest asset. An opportunistic takeover may further dent London’s appetite for companies from the region.

Walmart sale is nod to Japan’s online Suga rush

16 Nov 2020

The U.S. retailer is selling control of its Japanese supermarkets to KKR in a $1.7 bln deal. Rakuten is piling in too. The pair are well placed to get shoppers online as Prime Minister Yoshihide Suga pushes digitisation. Walmart is smart to stick around as a minority investor.

Moutai’s charitable turn will be real market drag

27 Oct 2020

The Chinese liquor champion’s mediocre third-quarter results shaved $14 bln from its market cap on Monday. The $309 bln index heavyweight is giving handouts to local governments even as state investors dump shares the company gave them. Worse, there’s probably more to come.

Samsung chairman bequeaths a tainted empire

25 Oct 2020

Lee Kun-hee, who transformed a noodle business into a smartphone and chipmaking colossus, has died at 78. The second-generation leader's mark on Korea Inc will endure, as do scandals that follow the family. Their challenge is to clean up the messy parts of his $355 bln legacy.