Breakingviews

Two $150 bln-plus tech giants face divergent futures

August 17, 2016

Intel is swallowing its pride and licensing IP from rival ARM. Cisco, meanwhile, may be planning to cut 20 pct of its workers. The outlook for last-generation tech titans is often grim as margins shrink. But the capital intensity of chipmaking should give Intel a second life.

Contrary smoke signals bedevil Brexit firefighting

August 17, 2016

An unexpected drop in the number of people claiming jobless benefit jars with other, grimmer survey data. Monetary policy has already been eased to manage any post-vote slowdown and a fiscal stimulus is likely. Clashing signals make it harder for policymakers to target such help.

Shenzhen-HK stock link tees up “Bubble Connect”

August 17, 2016

Investors in the two cities will soon get access to each other's bourses. The addition to the Shanghai Stock Connect further opens mainland markets. The prospect of China's get-rich-quick punters exporting their investing tactics into Hong Kong small-caps is less heartening.

Global worker mobility at risk in U.S. border row

August 16, 2016

Donald Trump proposes "extreme vetting" for would-be immigrants. D.C. lawmakers want tougher limits on the hiring of overseas workers. Multinational firms should worry about something else, too: a threat to their ability to transfer valuable employees to the United States.

ValueAct’s Morgan Stanley logic goes only so far

August 16, 2016

The activist's $1 bln-plus stake comes with support for CEO James Gorman. Fund boss Jeff Ubben reckons investors just don't get the firm. In fact, they fully grasp its volatile, low returns. There's room for the stock to rise. But the serious upside case involves radical change.

BHP Billiton reaches earnings nadir

August 16, 2016

A ray of light is appearing for the mining giant. Weak global demand and a Brazilian dam disaster were partly to blame for a record $6.4 bln full-year net loss but the worst has passed. As long as prices stabilise, cost-cutting will allow BHP to return more cash to shareholders.

China’s Netflix-to-Tesla is spread painfully thin

August 16, 2016

Jia Yueting's LeEco is pushing into TVs, mobile handsets, electric vehicles and video-streaming. That poses huge financial and strategic challenges for his mostly private group. These are fast-moving, capital-intensive industries with very well-resourced competitors.

Lyft’s off-ramp leads to General Motors

August 15, 2016

The No. 2 U.S. ride-hailing service recently rebuffed takeover interest from its 9 pct owner. There are good reasons for Lyft to steer clear of Detroit, despite a shared vision for autonomous cars. But cash-flush rivals could yet force the Silicon Valley upstart into GM's lane.

Renzi’s referendum gamble could be double or pits

August 15, 2016

Defeat in Italy's upcoming constitutional referendum could cost PM Matteo Renzi his job, and leave important reforms unfinished. A victory too could end badly. It could leave a strong Renzi government, but also pave the way for one led by the radical 5-Star party.

China Film’s opening week follows bad IPO script

August 15, 2016

Shares in China's biggest film distributor have more than doubled in their first week of trading. Never mind that ticket sales are falling across China. Artificially low prices and curbs on new issues mean that post-IPO performance is often divorced from fundamentals.