1 South-East Asia giants losing their edge (Marissa
Lee in Straits Times) South-east Asia's conglomerates continue to outperform
their pure-play peers, but their lead has narrowed with the end of the
commodities boom and mounting competition in a slower growth era, a new report
has shown.
The study assessed the performance of 67 large
family- and government-linked conglomerates in Indonesia, Malaysia, the
Philippines, Singapore, Thailand and Vietnam over a 10-year period from 2006 to
2015.
During that decade, their median annual total
shareholder returns or TSR, which assumes that dividends are reinvested, was 13
per cent - respectable, but a hard fall from the impressive 29 per cent TSR
achieved from 2003 to 2012.
In comparison, firms in South- east Asia that
focused on a single business saw median annual TSR decline markedly in the same
periods, from 19 per cent to 11 per cent, management consulting firm Bain &
Company found in the study.
One factor that has eroded the conglomerate
advantage is the commodities rout. As many as 30 per cent of the region's
conglomerates have a commodity focus, and these firms suffered from 2012 to
2015.
The other reason plays directly to the cliche of
conglomerates as unwieldy dinosaurs. "A conglomerate's size and complexity
create ways to hide costs, cross-subsidise businesses and avoid tough
decisions," said the report, and the region's dinosaurs have lagged their
focused counterparts in tackling the mounting cost and productivity challenges.
In spite of this, conglomerates continue to play a
major role in South-east Asia, accounting for around 40 per cent of the top
listed stocks. And what has not changed is that South-east Asia conglomerates
are consistently delivering higher shareholder value than their counterparts in
developed markets.
2 Year 2016 is hottest ever recorded (Damian
Carrington in The Guardian) 2016 was the hottest year on record, setting a new
high for the third year in a row, with scientists firmly putting the blame on
human activities that drive climate change.
The final data for 2016 was released on Wednesday by
the three key agencies – the UK Met Office and Nasa and Noaa in the US – and
showed 16 of the 17 hottest years on record have been this century.
Direct temperature measurements stretch back to
1880, but scientific research indicates the world was last this warm about
115,000 years ago and that the planet has not experienced such high levels of
carbon dioxide in the atmosphere for 4m years.
In 2016, global warming delivered scorching
temperatures around the world. The resulting extreme weather means the impacts
of climate change on people are coming sooner and with more ferocity than
expected, according to scientists.
The natural El Niño climate phenomenon, which helped
ramp up temperatures to “shocking” levels in early 2016, has now waned, but
carbon emissions were the major factor and will continue to drive rising heat.
The new data shows the Earth has now risen about
1.1C above the levels seen before the industrial revolution, when large-scale
fossil fuel burning began. This brings it perilously close to the 1.5C target
included as an aim of the global climate agreement signed in Paris in December
2015.
The declaration of 2016 as a year of record-breaking
heat comes just ahead of the inauguration of Donald Trump as US president.
Trump has called global warming a hoax and is filling his administration with
climate change deniers and former ExxonMobil boss Rex Tillerson. Tillerson said
recently that climate change does exist but that the ability to predict the
effects of greenhouse gas emissions is “very limited”, a statement most climate
scientists would reject.
3 Pearson shares fall 30% (BBC) Shares in the international
publishing group Pearson fell nearly 30% after the company warned of a big fall
in sales in its US education business. The company said profits for 2017 could
drop by £60m and it would cut its dividend for shareholders.
"The education sector is going through an
unprecedented period of change and volatility," Pearson said. The group
will now sell its 47% stake in the book publisher Penguin Random House to
bolster its finances.
In a trading update, Pearson revealed a sharp and
sudden drop in its main business - the sale of printed and online books to
higher education students in the US. Pearson said it had suffered a 30% fall in
sales in the last three months of 2016, producing an "unprecedented"
18% fall for the whole of 2016. "Our higher education business declined
further and faster than expected in 2016," it revealed.
Pearson now expects the downward trend in its
educational publishing business to continue during this year with profits for
2017 likely to be £60m lower than last year. One step to stem this trend will
be to cut its eBook rental prices by as much as 50% for 2,000 titles.
No comments:
Post a Comment