LONDON (Reuters Breakingviews) - Saudi Aramco’s initial public offering is an idea that deserves to be put back in the ground. The sale of a 5 percent stake in Saudi Arabia’s state-owned oil giant may be pushed back into 2019, according to Bloomberg. Achieving the desired $2 trillion valuation always looked a stretch. If Riyadh really wants the money it has better options.
LONDON (Reuters Breakingviews) - A pay cut for Britain’s top corporate leaders shows how setting compensation for chief executives is more of an exercise in guesswork than an exact science. The average CEO of a FTSE 100 company took home 17 percent less last year despite buoyant markets. Cutting their remuneration assuages public opinion but also underscores the problems companies face when trying to link pay with boardroom performance.
LONDON (Reuters Breakingviews) - Royal Dutch Shell is great at producing profit, but less so at producing oil. The Anglo-Dutch energy giant has more than tripled its earnings in the second quarter, helped by the strong performance of its downstream refining business and recovering prices. With its debt falling too, the company is doing the right things for shareholders – except in the crucial area of pumping more fuel.
LONDON (Reuters Breakingviews) - Even if Saudi Arabia and Qatar can patch up their differences, greater economic cooperation in the region appears unworkable. The kingdom and its allies have granted Doha two more days to meet their list of 13 demands. Failure to reach a deal could escalate the dispute, further hitting investors and regional economies. But even a compromise would be unlikely to patch up divisions between the Gulf’s Arab states.
LONDON (Reuters Breakingviews) - U.S. President Donald Trump’s whistle-stop visit to the Gulf has emboldened Saudi Arabia to settle an old score. The kingdom and its closest allies have cut ties with Qatar and accused the gas-rich sheikdom of supporting terrorism and sidling up to Iran. It is a dramatic escalation to a lingering feud in a region that meets a fifth of world oil supply.
LONDON (Reuters Breakingviews) - Glencore has fought hard for a lean balance sheet. Now it has one, it can keep things simple and give more money to shareholders, or binge on an acquisition. A merger approach to U.S. agricultural trader Bunge suggests Chief Executive Ivan Glasenberg favours the latter, somewhat riskier course of action. Such boldness could leave investors going hungry.
LONDON (Reuters Breakingviews) - BP has almost recovered from its near-death experience in the Gulf of Mexico. The oil giant’s earnings almost tripled in the first quarter, helped by favourable oil prices and higher output. Even its hefty debt pile looks manageable provided it keeps production flowing. After seven years of pain, deliverance may be within reach.
LONDON (Reuters Breakingviews) - A potential swoop on part of Swedish tissue and forestry products manufacturer SCA would be nothing for investors to cry about. A group of buyout firms has bid 200 billion Swedish crowns ($22.3 billion) for the company’s hygiene arm, Essity, which pulps Scandinavian trees into products ranging from baby diapers to bandages, newspaper Dagens Nyheter reported on Wednesday. Even if an offer proves soggy, it’s an example of how a breakup can open up new options for shareholders.
LONDON (Reuters Breakingviews) - Elliott Advisors’ plan to unlock more value from BHP Billiton has some merits. Tidying up and then breaking up could make shareholders in the Anglo-Australian miner roughly 50 percent better off, the activist investor argues. Elliott isn’t saying anything BHP hadn’t already considered, and a full split looks a stretch – but it may prompt a helpful spring clean.
LONDON (Reuters Breakingviews) - Crude oil prices spiked after U.S. missiles rained down on Syria. The fear isn't that military intervention could disrupt supplies but that Iran, which has been boosting output, will retaliate. Even if that scenario unfolds, though, the market's response looks excessive.