Breakingviews

Hong Kong’s cornerstone problem goes postal

August 25, 2016

Postal Savings Bank of China may sell as much as 80 pct of its $8 bln share offering to cornerstone investors. One unlikely ally, a big state shipbuilder, is already down for $2 bln. This is fresh evidence, on an epic scale, of how Hong Kong's IPO crown is thoroughly undeserved.

Best reason to keep Viacom’s interim boss: breakup

August 24, 2016

The $17 bln media firm named Tom Dooley as interim CEO. It's a strange move given his deep ties to ousted boss Philippe Dauman and his strategy. But while that makes him an odd choice to revive Viacom's fortunes he may know how to get the best value for its various assets.

UK housing crisis jars with builders’ fat returns

August 24, 2016

In a normal market, Persimmon’s 36 pct return on capital would get competed away. Instead, sclerotic planning and smaller rivals’ limited access to finance act as barriers to entry. Builders’ fat returns could be vulnerable if the new UK government decides to take bold action.

Singapore eyes last trick in the book to win IPOs

August 24, 2016

The city-state is moving closer to introducing dual-class shares. A growing sense of desperation about a moribund market for new listings has reduced opposition to such a move. The risks of giving up the high ground on shareholder democracy are likely to outweigh any rewards.

Williams gets the board fight it deserves

August 23, 2016

A pushy investor who just quit as a director at the $21 bln U.S. pipeline operator is back with a whole new slate. Because of a deadline, however, the nominees are stand-ins until real candidates can be found. The year of M&A helter-skelter makes this new madness somehow fitting.

Fund managers take long view by scrapping bonuses

August 23, 2016

Star investor Neil Woodford is paying his staff fixed salaries, while former trade body head Daniel Godfrey is launching a trust on the same principle. Fund costs won't necessarily fall. But a bonus system can prompt unhelpful short-termism while ratcheting up overheads.

Microfinance leaves India’s banks in the dust

August 23, 2016

After the near-collapse of the industry six years ago, small lenders to the poor are back and growing fast. A tight regulatory leash, low bad loan ratios, and high returns make microfinance a more attractive investment proposition than the country’s ailing state banks.

Pfizer bets $14 bln it knows better than market

August 22, 2016

The drug giant is paying a 120 pct premium for Medivation. It's a good fit and the biotech's cancer blockbuster is a rare gem. The whopping premium suggests Pfizer sees something others missed. But a heated auction and back-of-the-envelope math hint that the buyer is overpaying.

Britain’s haul: 27 gold medals and a wooden spoon

August 22, 2016

China underwhelmed in the Olympic medals table, while the tiny UK excelled. That’s a poor guide to more important competitions. Though Britain still has soft power, its value as a role model is on the wane. China no longer needs gold medals to secure its place on the podium.

Rajan reforms can thrive with India’s new RBI boss

August 22, 2016

Urjit Patel is a safe choice to lead the central bank. The deputy governor was a key architect of reforms introduced by outgoing head Raghuram Rajan. To earn the same level of acclaim, Patel must see these through and ratchet up the fight against bad debts.