MarketLine Blog

Posts written by Christopher Leyman-Nicholls

IMF appeases US trade policy

MarketLine

The first conference held by the IMF since the economic policy of the United States underwent dramatic changes following the election victory of Donald Trump already shows strong signs of moving towards a position designed to appease the new president. Differences between previous statements and policies from the IMF and what is now being espoused point towards the dropping of the pledge occurring for political purposes. Indeed the language used by the German Finance Minister and that of the IMF shows a stark contrast between views on the matter. Whilst… Read more

Renault Car Emissions: New allegations threatens French car manufacturer

MarketLine

The accusations against Renault published in the French press follow on from a 2015 report detailing cars which exceeded environmental rules by over 300%. Stretching back to 1990, the hierarchy at Renault is said to have known about and been involved with cheating emissions tests. The influence of the French government, and therefore the French taxpayer, will be important given the upcoming presidential election and shareholding. If reports of nearly one million cars being sold with devices used to distort the results of emission testing, the scandal could involve the… Read more

President Park Impeached: Relations with chaebols could change forever

MarketLine

Legislation designed to curtail the strength of chaebols has traditionally failed to discover parliamentary approval; now amendments to several acts have found new impetus following the impeachment of the president. Whilst voters await the coming election, prospective candidates are seeking to assert their case for a change in how chaebols operate in the South Korean economy. However, despite the rise in support, problems will need to be overcome for lasting change to occur. Previous efforts have fallen flat; this time there is a far greater chance of success. Moon Jae-in,… Read more

Toshiba $6.3bn write-down

MarketLine

Originally the board of Toshiba wanted to sell just 19.9% of the semiconductor making business, which was expected to raise $2bn, maybe more. In hanging on to the majority of the business Toshiba would be able to maintain control over the business from which 80% of operating profit is derived. Yet the banks saw the matter differently. Whilst the sale of the majority of the business solves many problems, it creates a fresh set. The more the ‘crown jewels’ of Toshiba are sold off, the harder making a profit becomes…. Read more

Bernie Ecclestone departs F1

MarketLine

The business model utilized in Formula One under the regime of Bernie Ecclestone and the ownership of CVC served the purpose of making shareholders rich. Yet, this was achieved at the expense of the sport. TV audiences have been in decline for a long time, several teams are struggling to survive, races are leaving traditional areas of support and the fans are unhappy. New owner, Liberty Media, must address these problems if Formula One is to regain impetus and become sustainable for all interested parties in the long term. For… Read more

Verizon purchase of Yahoo: Data breach puts deal at risk, but purchase still likely

MarketLine

The theft of confidential information from Yahoo in 2013, although only recently announced, has heaped doubt over the proposed purchase of Yahoo by Verizon. Many predict the final bill will be substantial and worse could follow – the FBI are investigating and could yet cause more problems. A reduced share price caused Verizon to reappraise the sale. For both parties the realization that damage occurring from the data theft has yet to be fully felt is a serious problem, making revaluing Yahoo much harder. Regardless of which route Verizon chooses… Read more

2M Alliance: Hyundai Merchant Marine deal is not a long-term solution

MarketLine

The agreement with the 2M Alliance marks an important step for Hyundai Merchant Marine. Despite the deal not meeting creditor demands, Hyundai M.M will have access to better business conditions than is possible under the soon to be defunct G6 alliance. Full membership, once the present agreement expires, has not been ruled out. Were the financial health of Hyundai to recover sufficiently the risk which deterred 2M customers would lesson, providing full access. The deal is not perfect and does not meet the memorandum of understanding signed earlier in the… Read more

Chinese Foreign Direct Investment Liberalization

MarketLine

Reducing the number of markets foreign investors are prevented from entering – down to 62 from 93 – marks a useful step in the right direction and should encourage investment into China, reducing the gap to the outflow. Investors should become more comfortable with China given the proposed new rules, but there is much to be done and reasons for pessimism. The proposals appear to be hobbled by caution and need to go much further to create a lasting impact. More worryingly, the problems that the changes aim to tackle… Read more

Samsung purchase of Harman signals the future

MarketLine

The takeover of Harman has placed Samsung among the leading players in the connected car industry; the Korean technology company has access to a raft of deals with major car manufacturers, expertise from a range of companies acquired by Harman and a huge $24bn order backlog. Infotainment, acoustics, display and other systems are all due to expand in value in the coming years, and Harman has systems already installed in over 30 million cars worldwide. Taking over the company presents Samsung with a highly valuable market position. CarPlay (the system… Read more

COMAC C919 Airliner lands

MarketLine

When the COMAC C919 launched, comparisons were immediately made with the failed Bombardier effort to break the Boeing/Airbus duopoly. Bombardier failed for several reasons, chiefly because it was unable to gain the required customer base needed to gain traction in the airline industry. This does not apply to COMAC: the company has a ready-made market of state controlled airlines, colossal state backing and provides fantastic opportunities for foreign companies. These factors will aid the company to make serious inroads into the Chinese domestic airline market, providing the impetus for future… Read more

AT&T to buy Time Warner

MarketLine

When business acquisitions on this scale are announced they almost inevitably become political – hence extensive investment in political lobbying. Announcing a buyout, therefore, just weeks before one of the most acrimonious presidential races in living memory concludes gives a difficult birth. Both candidates have already declared their displeasure. Some Senators have also voiced concerns and their intent to heavily scrutinize any proposals that come before them. Exactly why this time should be chosen is unclear: it makes the deal far more politicized than need be the case, raising uncertainties… Read more

No restructuring plan can save Hanjin

MarketLine

At the present time the primary difficulty with the ship freight industry is one of oversupply, and the gulf between capacity and demand is growing still further. Market conditions are reigning in even the most competitive companies: Maersk, the Danish conglomerate and a leading company in the sector, is cutting jobs and has cancelled an order for six of the huge Triple-E super tankers. In such an environment, Hanjin cannot hope to survive – the demand simply does not exist for such a company anymore. No matter the quality of… Read more

Volkswagen scandal refuses to go away

MarketLine

The VW emissions scandal shows little sign of slowing – affected consumers must be compensated whatever the cost if the scandal is to be finally concluded. Volkswagen owners in the US received $20,000 per case in compensation; European owners received a mere software update. However, this could be about to change after courts in Germany ruled a pilot case filed against the company by investors could go ahead. Efforts are underway to circumvent European Union laws and bring about similar cases in other European countries too. It follows a raft… Read more