Corporate Governance

Sonos IPO sounds like a sales pitch to Amazon

9 Jul 2018

The wireless-speaker maker plans to go public and may target a $3 bln valuation. That’s pitched high for a firm facing stiff competition and losing money on barely double-digit sales growth. But it’s a trifle for Amazon CEO Jeff Bezos, who can mimic Apple’s success with Beats.

Malaysia taps brakes along China’s Belt and Road

5 Jul 2018

Prime Minister Mahathir Mohamad has suspended work on a $20 bln rail link between his country’s east and west coasts. It’s a rare setback for Beijing's massive infrastructure initiative. The project's importance, though, means Kuala Lumpur can afford to fight for a better deal.

China eases HNA’s glide path

19 Jun 2018

The troubled conglomerate has billions in debt coming due soon. Official pressure on banks to support HNA bonds could therefore help it refinance, minimising the risk of an unplanned financial accident. That also buys time for more selloffs to further sharpen its focus on travel.

Italian corporate finance suffers political shock

18 Jun 2018

The country’s election and its turbulent aftermath contributed to a sharp drop in capital markets activity. Despite still-buoyant M&A, total investment banking fees are down 30 pct year-on-year. This is bad news for banks, but worse still for local companies seeking funding.

Japanese CEOs get new excuse to stop stock-picking

8 Jun 2018

An updated governance code tells boards to run cost-benefit analyses on holding stakes in other listed companies. It’s too much to hope this alone will catalyse disposals and buybacks. But it could help shareholders, such as those at broadcaster TBS, make a case for streamlining.

Solar star GCL has fix for dark days in China

7 Jun 2018

The world’s top maker of polysilicon, a key ingredient in solar panels, is selling control of a core Chinese unit for nearly $2 bln. That’s a surprisingly good price. This will help GCL-Poly through a lean patch as the industry adapts to a sudden withdrawal of government grants.

Malaysia’s 1MDB purges may hurt before they help

6 Jun 2018

The central bank is the latest institution caught in the backlash over the disgraced wealth fund, with the mooted departure of its governor. More heads will roll in the bureaucracy and beyond, creating extra uncertainty just as external pressures mount and fiscal plans shift.

Vedanta’s tin ear is a problem for shareholders

30 May 2018

After deadly protests forced the closure of a plant, Chairman Anil Agarwal is blaming a foreign conspiracy. That is no way to reassure rattled investors in the Indian miner, especially given Vedanta’s controversial history. At least a new incoming CEO can set a better tone.

China’s flabby stock market set for a workout

29 May 2018

MSCI index inclusion will inject a few billion dollars into mainland shares from June. While some money will simply track the benchmark, active investors will arrive too. That should mean that prices more closely reflect fundamentals, and bosses feel more pressure to shape up.

Samsonite short case piles up Hong Kong’s baggage

24 May 2018

An experienced stock sceptic has laid into the $6 bln luggage-maker’s governance and accounting. It’s a bigger and better-known company than the Chinese minnows typically targeted. For a market relaxing standards to broaden its appeal, Samsonite gives investors more to unpack.

Indian hospital deal merits a second opinion

24 May 2018

A Fortis Healthcare director was ousted by shareholders after three others facing a similar fate resigned a day earlier. It’s a rebuke of the decision to sell a minority stake to local tycoons. A fresh review of four other offers by a new board should lead to a better prognosis.

Deutsche fightback begins with legacy asset reveal

21 May 2018

The German lender’s balance sheet includes about 50 billion euros of unprofitable trades which drag down its investment bank’s return on equity. Reporting them separately would attract attention to past mistakes – but also offer a clearer picture of the bank’s recovery.

Settling 1MDB scores will be easier than debts

18 May 2018

Malaysia’s new government can reopen investigations in the state fund but they are stuck with its debt. Reckless promises of support, and a previous desperate clean-up, put the state on the hook for about $8 bln. Trying to dodge these obligations would do more harm than good.

Hardy Indian hospital auction takes sickly turn

11 May 2018

A divided Fortis board chose selling a minority stake to two investors with little experience running hospitals over four other offers, including a $1.3 bln takeover. Half the directors may be gone before shareholders vote. The disarray leaves room for a hostile bid.

U.S. helps make RBS nearly great again

10 May 2018

A $4.9 bln fine for missold mortgages is less than feared and means the lender has 4 bln pounds in surplus capital. The UK’s 71 pct stake means it gains most from renewed dividends and greater chances of a share sale. It’s a small present ahead of President Trump’s July visit.

Emerging markets split into haves and have-nots

8 May 2018

A stronger dollar and higher U.S. bond yields have hit Argentina, Indonesia and Turkey especially hard. But others like the Philippines are in sounder economic shape. Buoyant oil prices create winners as well as losers. For investors, discrimination is the better part of valour.

Australian banks are down but not out

3 May 2018

A string of inquiries and painful revelations is buffeting ANZ, CBA, NAB and Westpac – the most recent about lost details on 20 mln accounts at CBA. As ANZ’s boss says, a golden era is over. But though costs are rising and loan growth is set to slow, the oligopoly will endure.

Elliott sends powerful signal with Seoul case

2 May 2018

The hedge fund wants payback from South Korea for a tie-up between two Samsung units. Fighting this under free-trade rules is highly unusual. But the scandal around the deal bolsters Elliott’s case and its determination puts other targets, like Hyundai, on notice.

Review: China experts enter their own “New Era”

27 Apr 2018

Two new books from respected scholars try to make sense of the country under Xi Jinping. Both see it fast moving toward a more centralised political regime, with messy and probably unpredictable consequences. As interesting is the shifting mood among China analysts themselves.

China’s bad banks go on, even if bad bankers don’t

26 Apr 2018

Huarong is humbled as graft busters oust its chairman and confiscate passports. The company is part of an aging group that evaded obsolescence by turning into distressed asset investors. With $270 bln of bank loans gone sour, Beijing needs to keep bad banks around.