Blog Profile / Reuters Breakingviews Blog

Filed Under:News
Posts on Regator:3803
Posts / Week:16.9
Archived Since:June 19, 2011

Blog Post Archive

Asian capital controls are a real risk once again

Malaysia’s prime minister has ruled out a repeat of the country’s 1998 hot money curbs. But slumping Asian currencies suggest it’s too soon to be complacent. Raising interest rates could mean deep recessions. Some politicians might decide to prevent capital from leaving instead.

Valeant pops risky $1 bln libido pill

The acquisitive drug firm is buying Sprout, the maker of just-approved “female Viagra.” Valeant will have gotten a bargain if it can crank out billions in annual sales. Snag is, the drug isn’t very effective, it has bad side effects, and regulatory restrictions may crimp sales.

SoftBank’s hired gun takes high road to ownership

Nikesh Arora will invest $483 million in the Japanese tech group, cementing his place as successor to founder Masayoshi Son. It’s a refreshing change from the complex awards handed out by many U.S. companies. It should also help the ex-Googler push through more bold investments.

Glencore tripped up by faith in rational markets

The commodity trader’s earnings have disappointed as copper and coal have tumbled. Anticipating the market is getting harder because both rivals’ behaviour and Chinese demand for raw materials are even more unpredictable. Glencore is thus focusing on what it can control: cash.

Edward Hadas: Amazon’s ultra-XY management style

The retail giant denies running a cruelly competitive workplace. But when a super-charged inspirational management style collides with an excessively discipline-centred one, impossible expectations of what staff can achieve become normal. Fortunately, the mix is unlikely to last.

Indian e-tailer’s funds will disappear in a flash

Online marketplace Snapdeal is raising $500 mln from investors led by Alibaba and Foxconn valuing it at $5 bln. Securing more big-name backers is a coup for the Indian start-up. But the huge discounts it offers to lure buyers and sellers means the new funds won’t last long.

New bank M&A powerhouse leaves rivals for dead

Regional U.S. lender BB&T’s $1.8 bln swoop for National Penn is its fourth deal in a year. The acquisition makes financial sense and is more proof the Fed supports industry tie-ups. The longer other banks stay on the sidelines, the more it’ll look like they fear rejection.

Bangkok attack shakes Thai economy’s last support

The deadly bombing of a shrine will scare off tourists whose numbers were up 29 pct this year. It’s another jolt to an economy already grappling with flat exports and weak private investment. Military rulers have been slow to boost public spending. That’s making things worse.

Amazon swaps more than size with Wal-Mart

The $250 bln online retailer recently surpassed its bricks-and-mortar rival in terms of market value. The goliath led by Jeff Bezos also finds itself in another spot Wal-Mart will more happily cede: defending workplace practices. Like its rival, Amazon too will find wisdom.

John Malone takes home shopping over the top

Buying Zulily, a flash-sale site for moms, would increase online revenue at the cable mogul’s QVC broadcast arm from about 40 pct to half. The target’s growth is already slowing quickly, however. And at $2.4 bln, or 38 times EBITDA, the deal reveals the high cost of chasing Amazon.

Hugo Dixon: Greece may not need debt haircut

No single measure, such as debt to GDP, adequately captures how unsustainable Athens’ balance sheet is. Most other yardsticks show Greece needs debt relief. But cutting the face value of its borrowings is probably not required.

Edward Chancellor: The cost of China’s devaluation

Forget about currency wars and global deflation. The true impact of the yuan’s sudden decline will be felt by China’s dysfunctional credit system, where domestic borrowers and foreign lenders believed the currency could only appreci...

Review: Euro was the path of least embarrassment

Valerie Caton’s history of French policy around the single currency could be read as a chronicle of meetings, position papers and fuzzy compromises. It is better to see a tale of European leaders grudgingly living up to their historic destiny. More of that, and the euro can survive.

Goldman’s bank deal swaps one risk for another

Snapping up $16 bln of deposits from GE Capital helps cut the firm’s costs and reliance on bond market financing. Regulators may be happy, but the more deposits it has, the more Goldman, like Morgan Stanley, can use them to fund some trading. That poses systemic issues, too.

Lenovo turnaround will take more than cost-cutting

The electronics group will slash $1.35 bln from annual expenses after falling PC sales and slowing smartphone demand halved its quarterly earnings. That may halt losses at the Motorola unit Lenovo bought for $2.9 bln last year. But any return to growth depends on a demand pickup.

China’s currency could fall another 5 percent

The central bank says it’s not out to weaken the yuan. But to recoup China’s competitiveness without slipping into deflation, a slide to at least 6.75 to the dollar would be welcome. That could help the mainland, but would give the rest of the world a new headache.

Alibaba’s golden-child status hangs by a thread

The Chinese e-commerce group’s disappointing quarterly revenue growth pushed the shares close to last year’s float price. Investors haven’t much challenged founder Jack Ma’s free rein so far. A weakening business and over $100 bln of lost market capitalisation may change that.

Edward Hadas: Tom Hayes had the wrong standards

The convicted trader said he was like most people. They just “do their job” without asking whether it is honest or dishonest. He has a point. Society requires such upward ethical delegation and it usually works pretty well. Except, that is, in the financial world.

China’s yuan devaluation push looks far from done

The central bank weakened the official exchange rate by another 1.6 pct against the U.S. dollar. It’s a clear sign the new “market-oriented” yuan is heading down. Until China uses its foreign exchange hoard to prop up the currency, investors will assume there’s further to go.

Symantec’s Veritas sale tells truth about tech M&A

Offloading the data storage business for $8 bln to Carlyle and Singapore’s GIC ends a decade-long disaster of a deal. Like HP, eBay, Microsoft and others, Symantec discovered it’s often harder to buy than build. Trouble is, breakups and writedowns tend to perpetuate the problem.

Copyright © 2015 Regator, LLC