May 22, 2013 08:14 UTC

Goldman trumps HSBC in financial Chinese chequers

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By John Foley

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Who’s the smarter investor in China – HSBC or Goldman Sachs? The UK lender’s business in China has grown impressively. But based on their recent sale of stakes in two of China’s biggest financial groups, the Wall Street investment bank has the edge.

May 21, 2013 13:33 UTC
Edward Hadas

Apple tax fight needs global response

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By Edward Hadas 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In 1961, the six-year-old Steve Jobs probably didn’t notice U.S. President John Kennedy’s criticism of American companies’ use of foreign tax shelters. Corporate taxation had slid down the public agenda by the time the founder of Apple was achieving success, and it stayed that way for the rest of his life. But now it’s back, and Tim Cook, Jobs’ successor as Apple chief executive, has a public relations problem.

COMMENT

It is in the nature of governments and their politicians to compete for taxable business ventures. The result of this competitiveness among nations, states, provinces, cities, is that a company is able to create a profit in spite of the taxing tendencies of its own local government thereby causing governments to create competitive laws and codes; for example, clothing distributors can overcome the distance-costs between their customers’ markets and the manufacturers of that clothing in Bangladesh…said simply, it makes business sense to invest in Bangladesh.

If the tax-field is “leveled” across the globe, by some dictatorial mandate of the U.N. or other Utopian dreamer there is no reason to go to Bangladesh, or Ireland, or Detroit, or Monterrey, Mexico, or Johannesburg, or Kabul, or Tel Aviv…in other words the motivation to invest, develop and improve is neutralized with an ultimate result of spreading even less wealth.

If its all equal on taxes, me and my money might as well just stay home, invest in Gold, and wait for the Utopians to put the poorest countries out of business, and back into 3rd world (or worse) status (again — just like the good old days).

The tax distraction is just that, a distraction. The real story, for example, is the improvement to day-to-day plight of the man on the street which the clothing distributors have brought to Bangladesh…and yes, the safety, security, and hygiene of the workers and their families must improve, but not by killing the very reason for business to be there, i.e., the combined attractive costs of taxes, labor, and occupancy.

The unintended result of level, global taxation will be the return of bone-crushing poverty to those nations and cities who are just now achieving 2nd World economic status.

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May 20, 2013 20:22 UTC

Dimon has little to lose in shareholder vote

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By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Jamie Dimon has little to lose if JPMorgan’s shareholders choose to split the chairman and chief executive roles at Tuesday’s annual meeting. Quitting, a response that has been hinted at by the board in recent weeks, would be a rather childish move. There are better options for all concerned.

May 20, 2013 20:17 UTC

Marissa Mayer puts exclamation point back in Yahoo

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By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Marissa Mayer has made her mark on Yahoo in less than a year. The website chief’s $1.1 billion deal to buy blogging site Tumblr on Monday goes a long way to restoring the faded and vainglorious exclamation point to the company’s name.

May 20, 2013 13:49 UTC

FirstGroup cash call shows deleveraging imperative

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By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It’s shaping up to be the year of the rights issue in Europe. FirstGroup’s 615 million pound ($1 billion) cash call suggests companies are biting the bullet and exploiting the rise in equity markets to repair their balance sheets. The jumbo issue from the UK rail and bus operator comes after similar fundraisings from the likes of Commerzbank, Dutch cable company KPN and travel operator Thomas Cook. Other distressed companies should look to delever while they can.

May 17, 2013 19:16 UTC

Wells Fargo boss takes turn on soapbox

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By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

John Stumpf may be easing his way onto the soapbox. The Wells Fargo chief executive runs the biggest U.S. bank by market value, at $210 billion, but has kept a lower profile than many of his peers. Lately, though, he has been critiquing regulation more, tiptoeing into a role filled until recently by JPMorgan boss Jamie Dimon.

May 16, 2013 16:29 UTC

Glencore should just name Ivan Glasenberg chairman

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

John Bond’s ouster is an opportunity for Glencore Xstrata to make a fresh start in the boardroom. Best practice would dictate that the departing chairman’s permanent replacement be a strong outsider. That precludes tapping Ivan Glasenberg, the newly-merged miner’s CEO and its biggest shareholder. However, a dual mandate might better reflect corporate reality.

May 15, 2013 21:54 UTC

Speech-tech firm’s M&A machine could go in reverse

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Over the past decade, Nuance Communications has been on a frenetic shopping spree. The $6 billion firm now encompasses businesses ranging from medical transcription to powering Siri on the iPhone. But Nuance, the M&A machine, is sputtering. Margins are falling, the stock hasn’t advanced in five years, and debt is accumulating. Moreover, Carl Icahn recently upped his stake in the company from 9 percent to 11 percent in what could signal an end to acquisitions – even the start of a breakup.

May 14, 2013 20:07 UTC

Tesla shareholders are pulling ahead of themselves

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By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Tesla’s shareholders seem to be assuming Chief Executive Elon Musk is infallible. The $10 billion U.S. electric carmaker is on a roll, last week recording its first quarterly profit and receiving the best score the Consumer Reports publication has bestowed on a car for six years. The company’s stock has since surged as much as 70 percent, leaving Tesla worth more than Fiat and Peugeot combined and trading at a whopping 27 times estimates for earnings in 2016.

May 14, 2013 11:49 UTC

Dan Loeb‘s breakup plan deserves Sony’s ear

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Dan Loeb is taking Japan’s economic renaissance at face value: the hedge fund manager wants Sony to spin off its entertainment arm. Though activists rarely prevail in Japan, Loeb’s idea may have merits. The electronics giant should take him seriously.