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Follow this list to discover and track stocks that have set MACD bearish crosses within the last week. A bearish crossover occurs when the MACD turns down and crosses below the signal line. Our algorithms use 12,26,9 as MACD parameters. This list is generated daily, ranked based on market cap and limited to the top 30 stocks that meet the criteria.
Alibaba Group Holding Limited
Exxon Mobil Corporation
Royal Dutch Shell plc
Royal Dutch Shell plc
Merck & Co., Inc.
Wells Fargo & Company
Fomento Económico Mexicano, S.A.B. de C.V.
HSBC Holdings plc
BHP Billiton Limited
China Life Insurance Company Limited
Rio Tinto plc
The Goldman Sachs Group, Inc. PFD A 1/1000
E. I. du Pont de Nemours and Company
Prudential plc PER SUB 6.50%
Banco Santander, S.A.
Banco Bradesco S.A.
Boston Scientific Corporation
Enterprise Products Partners L.P.
Las Vegas Sands Corp.
ING Groep N.V.
As we kick off 2020, we're taking a look at the past year's most popular stocks and the trends that fueled them. To do this, we took a peek within our award-winning technical analysis product Technical Insight to see which U.S. instruments yielded the highest search rate from our global investor base throughout 2019.
(Bloomberg Opinion) -- A year ago, I sat with Vale SA’s then-Chief Executive Officer Fabio Schvartsman in Davos, sipping lukewarm coffee. He chatted amiably about the next stage of the turnaround at the Brazilian mining giant, unaware that within 24 hours a river of sludge from one of his dams would take 270 lives in the town of Brumadinho. This week, he was among executives and former employees charged with homicide.The disaster on Jan. 25, 2019, a human and environmental catastrophe that’s been compared with BP Plc’s Deepwater Horizon oil spill, was supposed to be a moment of reckoning. It was, after all, Vale’s second such accident in just over three years. Yet 12 months on, shares in the $70 billion group are back at pre-Brumadinho levels, pointing to something less dramatic. The rebound also suggests investors are struggling to grasp the painful longer-term costs of such accidents for the company and the industry, in the era of stakeholder capitalism.The dam at the Corrego do Feijao mine was a problem from the beginning. It dated back to 1976, when it was started by a company later acquired by Vale. The dam was built over decades, using the tailings, or mining waste. New layers were added on top of old ones, until 2013. Unfortunately, such dams require water to drain out if they are to remain stable; the technical investigation found this one was too steep, and allowed to get too wet. High iron content made it brittle, too.In the end, there was no warning. After heavy rainfall in late 2018, it simply collapsed, releasing 10 million cubic meters of mud – roughly 4,000 Olympic swimming pools – in under five minutes.The timing for Vale was painful. It found itself accused of negligence and worse, just as the miner was emerging from another accident, the 2015 collapse of a dam owned by Samarco Mineracao SA, its joint venture with BHP Group. Schvartsman, a former pulp and paper executive, had stepped into the top job in 2017 vowing “never again.”The market’s immediate reaction was strong. Vale lost nearly a quarter of its value, almost $20 billion. Investors’ calculations of the ultimate cost were then obscured, though, as the hit to supply at the world’s largest iron-ore exporter eventually drove prices of the steelmaking ingredient well above $100 per metric ton.The cost is still unclear. That shouldn’t be startling. BP was still raising estimates for outstanding claims for Deepwater Horizon years after the event. In the end, the British oil major sold more than $70 billion of assets to remain in business; its shares haven’t recovered.The scale and jurisdiction are different here. Still, it’s surprising that Vale’s shares have bounced back.That doesn’t mean that no costs have been priced in. Compare Vale with iron ore-focused rival Rio Tinto Group. Rio’s London shares have risen almost 18% in the past 12 months thanks to surging iron-ore prices. Add in the impact of reinvested dividends, and the total return is more than 30%. The share increase alone implies a gap of some $16 billion with Vale.Some of that sum reflects the impact of lost revenue, given the 93-million-ton hit to production during a year when the price of high-quality Brazilian iron ore fines delivered to northern China averaged more than $100 a ton.The remainder, though, isn’t too far from what Vale itself has already set aside, handed out or had frozen for potential liabilities from Brumadinho: It paid $1.6 billion for reparations and compensation in 2019, and has provisioned $5.4 billion. Some 7.5 billion Brazilian real ($1.8 billion) of assets are frozen by the courts. The trouble is, that covers mostly first-order costs, like payouts for workers and families, the wider clean-up and some fixes to similar facilities elsewhere. Vale plans to spend $1.8 billion over five years shifting to dry stacking, a safer method to dispose of mine waste. By 2023, it says 70% of its production will use this.The wider impact of Brumadinho and the 2015 disaster on Vale and the industry will be more profound. Risks to tailings dams and other mining installations are already increasing, and there may be more monitoring in some corners. Extreme weather including heavy rainfall is far more frequent, and declining ore grades, or the percentage of minerals in rock that’s dug up, mean more waste to deal with. This coincides with increased concern among shareholders for the environmental impact of investments.Higher bills for more inspections might be manageable for large miners, but what about significantly slower permits, higher costs of closure, or projects that get blocked entirely by disgruntled communities? During a high tide for populism in Brazil and elsewhere, that’s harder than ever to estimate. It’s unlikely Brumadinho will be forgotten by governments and communities as disasters like Mount Polley in 2014 largely were.According to a report by the Church of England Pensions Board, 40 of the top 50 mining companies had made disclosures on their websites about tailings dams as of late December, as requested by campaigners and shareholders. That’s a solid three-quarters of the mining industry by market capitalization, but leaves plenty of laggards. Schvartsman, in the aftermath of Brumadinho, said Vale was a “Brazilian jewel” that could not be condemned because of an accident. His gross underestimation of the seriousness of the situation cost him his job, and moreInvestors and rivals would be wise not to make the same mistake. To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Enterprise Products Partners (EPD) closed the most recent trading day at $27.35, moving -1.62% from the previous trading session.
(Bloomberg) -- Crude posted the worst weekly decline in more than a year on concern that the spread of China’s coronavirus will cripple fuel demand. Brent futures sank 2.2% in London on Friday. Deaths from the coronavirus rose to at least 26 and China expanded travel restrictions for about 40 million people in an attempt to halt contagion. The U.S. is monitoring more than 60 people for potential infection and lawmakers said health authorities are expected to confirm a third case.The Asian virus has spooked traders even as the World Health Organization stopped short of declaring a global health emergency. The contagion is disrupting travel during the Lunar New Year holiday, when hundreds of millions normally fly or ride home. The selloff has accelerated as trend-following funds turned bearish, according to TD Securities.“Contagion fears are spiking ahead of the biggest yearly migration ahead of new year,” said Daniel Ghali, a commodities strategist at TD Securities. “The fear factor is the risk of contagion, synonymous to what happened in 2003 with SARS which led to a 2% drop in Chinese economic growth.”The fast-spreading virus is the latest challenge for a market that’s been buffeted this year by geopolitical turmoil in the Middle East and North Africa, as well as the phase-one trade deal between Beijing and Washington. Goldman Sachs Group Inc. said earlier this week that, if the coronavirus has an impact similar to the 2003 SARS epidemic, demand could be curbed by 260,000 barrels a day. While this is not the first time global oil markets contend with an epidemic threatening demand, the current supply environment could worsen the situation.“The slightest fear of any economic slowdown will spur a long wave of liquidations because the market is so oversupplied,” said Walter Zimmermann, chief technical strategist at ICAP Technical Analysis.Some businesses in China including McDonald’s Corp. and Starbucks Corp. temporarily shut some stores in efforts to contain the virus.See also: China’s Economy Was Brightening This Month Before Virus Fear HitBrent crude for March settlement fell $1.35 to settle at $60.69 a barrel on the ICE Futures Europe exchange in New York putting its premium over WTI for the same month at $6.50 a barrel. Brent futures fell 6.4% this week.West Texas Intermediate futures for March delivery slipped $1.40 to end the session at $54.19 a barrel on the New York Mercantile Exchange, the lowest level since October. Meanwhile, based on the commodity’s relative strength index, WTI is sitting in oversold territory and is due for a rally.Options traders are paying the most since Oct. 31 for protection against price swings, according to the CBOE/CME WTI volatility index.\--With assistance from James Thornhill, Grant Smith and Saket Sundria.To contact the reporter on this story: Jackie Davalos in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Jessica Summers, Mike JeffersFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Consumer groups had worried that the Trump administration's pick to lead the Office of the Comptroller of the Currency (OCC), Joseph Otting, would do little to change its reputation for leniency. A former chief executive of California's OneWest Bank, Otting as comptroller has referred to lenders as his "customers" and pursued rule changes pushed for by bank lobbyists. One person with knowledge of the matter said Wells Fargo's failure to swiftly fix systemic misconduct has angered Otting, precisely because he spent decades as a banker and felt he was held to high standards.
(Bloomberg) -- Once-untreatable cancers and rare diseases are being vanquished. Medical breakthroughs have put Ebola and HIV on the back foot, even as new viruses emerge. Drug stocks have touched record highs after a decade of gains.But at the industry’s biggest annual gathering, a San Francisco investor meeting that draws in thousands from biotechnology, pharmaceutical and insurance companies, plus investors, bankers and consultants, there was a sense of uncertainty, even worry.“The model is broken in the U.S.,” Sanofi Chief Executive Officer Paul Hudson said in an interview.Despite record scientific and market returns, the health-care industry’s future in the U.S. has never seemed less clear. Candidates for the Democratic presidential nomination have proposed nationalizing the health-insurance system. The president has called for drug-price controls. And after years of struggle, there’s been no winner among the warring factions of drugmakers, health insurers, pharmacy-benefit managers and patients.For one attendee at the conference, hosted in a cramped hotel in the Union Square neighborhood, it felt like waiting for a metaphorical earthquake.“I think that these constant price increases create a situation where there’s all this built-up tension, all this built-up energy,” Denny Lanfear, the CEO of Coherus Biosciences Inc., said about his company’s goal to drive down drug prices with lower-cost competitors to expensive biotech drugs. “It’s kind of like the seismic tension along the San Andreas fault: At some point, you simply have an event which causes a tectonic shift in thinking.”And this week, Johnson & Johnson CEO Alex Gorsky said on a conference call that the long, volatile debate about the U.S. health care system has contributed to “what may sometimes feel like uncertain times.”Despite the industry’s worries, the market has for weeks suggested that things couldn’t be better. An S&P 500 subindex of health companies, including players like Johnson & Johnson and Pfizer Inc., would hit an all-time high by the conference’s end. Registration for the always-crowded event rose this year, as did San Francisco hotel occupancy, and average hotel rates were $972 a night, according to data from the San Francisco Travel Association.On Friday, some of that confidence began to crack. Health stocks including Bristol-Myers Squibb Co., CVS Health Corp., Amgen Inc. and others led declines after a report that the Trump administration could make a fresh push to lower prices.Among the almost 10,200 attendees last week at the conference, one of those small seismic tremors could be felt between the CEO of one major drugmaker and the top executive from CVS, the pharmacy plan and drugstore chain that negotiates drug prices for patients. The company is also one of the U.S.’s leading health insurers.“We need more regulation of the insurance industry,” David Ricks, CEO of Indianapolis-based drug giant Eli Lilly & Co., said in an interview Tuesday morning in one of the hotel’s lounges. “I don’t think the system will maintain itself like this for the next decade. We’ll have to see reform.”Moments later, Ricks spotted his counterpart at CVS, Larry Merlo, coming into the room with a group of employees and walked over to him to talk about a long-running business dispute.“We’ve had some differences in the past,” Ricks said to Merlo, as Whitney Houston’s “Dance With Somebody (Who Loves Me)” played over the speakers. The drug CEO told him that he hoped they could soon find some common ground on coverage of insulin, one of Lilly’s major products, and drug affordability.The two executives have clashed before, as have their industry lobbies -- blaming the other for the increasingly expensive price tags for U.S. pharmaceuticals. CVS currently excludes Lilly’s top-selling insulin from its main list of covered drugs.A CVS representative declined to say how the conversation ended, saying CVS would continue to work on getting insulin to patients at the lowest cost.“We’re willing to work with any part of the supply chain,” said CVS spokesman T.J. Crawford, “but we’re also willing to go it alone.” A Lilly spokesman also declined to comment further on the details of the executives’ conversation.Political TargetLater Tuesday evening, Democratic presidential candidates in Iowa for the final debate before the state’s presidential primary caucus took aim at the industry. Vermont Senator Bernie Sanders condemned health-care companies -- three times -- for “greed and corruption.” Former Vice President Joe Biden, who leads many polls, called for price controls: “You don’t have to pay the price. Limit what they can charge,” he said. Senator Elizabeth Warren, Sanders’s main rival, said she would use presidential authority to lower the prices of insulin, EpiPens and HIV medications. And almost all the candidates have either called for nationalizing the health insurance system or creating a government-run competitor to it.Sanders kept up the broadside a few days later, attacking “price-gouging” pharmaceutical companies Friday after BioMarin Pharmaceutical Inc. said it may place a $2 million to $3 million price on its experimental gene-therapy treatment, according to the Wall Street Journal.A BioMarin spokeswoman said in an email that the company hasn’t announced a price for its therapy and declined to comment on the Sanders tweet.President Donald Trump, who is making a bid for re-election this fall, has said he favors a proposal to peg price tags in the U.S. to the much lower levels in other countries, what’s known as an international pricing index. The drug industry is instead is pushing for a cap to how much patients pay out of their own wallets for prescriptions under Medicare’s prescription drug benefit.“The greatest threat the industry faces right now is President Trump pulling the trigger on international price index. It’s clear he doesn’t want to go into the election with nothing on pricing,” said James Greenwood, who leads industry group the Biotechnology Innovation Organization, which is ramping up lobbying efforts going into the election cycle.Washington’s appetite for drug pricing reform could even affect the most commercially viable medicines, like cancer treatments, said Chris Boerner, chief commercialization officer of Bristol-Myers.“Innovation has never been better: immuno-oncology, cell therapy, gene therapy are fundamentally changing diseases,” Boerner said. “But now we unfortunately do see an environment where policies put forth could change the ecosystem that led to those innovations. That’s deeply concerning.”New FocusAs scrutiny of the industry’s prices has continued, some drugmakers have turned away from areas where the pressure is most acute. Sanofi announced in December it would halt research in heart disease and diabetes: two legacy areas that faced significant cost pressure. Hudson, who took the helm in September, will double down on medicines for cancer and other diseases where reimbursement is more straightforward -- and often higher.They’re also making smaller bets, a striking contrast to 2019 mega-mergers like Bristol-Myers’s $74 billion acquisition of Celgene Corp. and AbbVie’s $63 billion bid for Allergan Plc.With the future uncertain, those type of big bets are no longer fashionable. In favor instead are smaller, “bolt-on” deals.Lilly announced a $1.1 billion deal on Jan. 10 that CEO Ricks described as “the definition of bolt-on,” while German drugmaker Bayer AG plans deals to invest further in cell and gene therapy, a move that would complement its acquisition of cell therapy-focused biotech BlueRock last year, Stefan Oelrich, president of pharma, said.Jennifer Taubert, executive vice president and worldwide chairman of pharmaceuticals at Johnson & Johnson, touted the company’s partnerships. “There still is a really good appetite and ability to partner even though there’s other funding mechanisms and things out there,” she said. Sanofi CEO Hudson said he, too, was looking at smaller, earlier-stage deals.“This year, it’s a tricky year, because with the prospect of drug pricing legislation there’s a number of different outcomes that could influence the type of company you’d want to buy,” said Richard Pops, CEO of biotech Alkermes Plc. “What’s going to be in the crosshairs in terms of regulatory or statutory reform that makes certain businesses more or less attractive?”“I can see why pharma is waiting to see how the dust settles before they make big commitments to different businesses,” Pops said.\--With assistance from Bailey Lipschultz.To contact the reporters on this story: Emma Court in New York at firstname.lastname@example.org;Riley Griffin in New York at email@example.comTo contact the editors responsible for this story: Drew Armstrong at firstname.lastname@example.org, Timothy AnnettFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Department of Justice is looking into whether executives withheld details about fake accounts to the Wells Fargo board of directors and the Office of the Comptroller of the Currency, the lead regulator for national banks, Reuters has reported. Consent orders: Wells Fargo is currently operating under roughly 14 consent orders with various regulators including the OCC, SEC, and the Consumer Financial Protection Bureau.
Exxon (XOM) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
(Bloomberg) -- As Goldman Sachs Group Inc. moves to increase diversity on corporate boards, the investment bank isn’t extending the initiative to a particularly challenged region: Asia.Chief Executive Officer David Solomon revealed this week that starting in July the bank won’t handle initial public offerings for companies that lack either a female or diverse director. But the rule applies only to IPOs in the U.S. and Europe. Asia’s exclusion is striking, given how common all-male boards are in the region. Other bastions of male dominance, including Latin America and the Middle East, also went unmentioned.A Goldman spokeswoman said the bank will consider implementing the plan in Asia and other regions over time after consulting with its clients, as diversity awareness improves in those areas and that it will consult with its clients in those areas to improve board diversity.“Nowadays there’s no excuse for companies to have non-diverse, all-male boards,” said Fern Ngai, CEO of Community Business, a Hong Kong-based group that advocates for responsible and inclusive business practices. Goldman “should include Asia. I don’t see why they don’t.”Goldman is initially targeting regions where corporations have come further in making women a part of top-level decision-making. In California, new legislation mandates board diversity, with fines for noncompliance. Asia lags behind not just the U.S. and Europe, but also global leader Africa in the proportion of women on company boards, McKinsey Global Institute reported late last year.A study by index provider MSCI Inc. of companies in its global benchmarks last month showed about 33% of firms in Japan had no female board members, one percentage point worse than China and Hong Kong. By comparison, that figure was 1% in the U.S., while it was 94% in Saudi Arabia.Recent high-profile IPOs in Asia showed a paucity of female representation, with no women on the boards of Xiaomi Corp. and Meituan Dianping, which raised almost $10 billion combined in 2018. Goldman had a leading role in both those offerings.The bank was the biggest underwriter of IPOs in the U.S. and Europe last year. It had a more modest market share in Asia, coming in 19th, according to Bloomberg league tables. Goldman was an adviser on 86 IPOs in 2019, ranking sixth globally among underwriters.Last May, Hong Kong’s stock exchange issued a non-binding guidance letter to new IPO applicants, asking them to disclose their board-diversity policies and give an explanation if their directors are all of a single gender.\--With assistance from Zhen Hao Toh and Jeff Green.To contact the reporters on this story: Kiuyan Wong in Hong Kong at email@example.com;Julia Fioretti in Hong Kong at firstname.lastname@example.org;Cathy Chan in Hong Kong at email@example.comTo contact the editors responsible for this story: Candice Zachariahs at firstname.lastname@example.org, Jonas Bergman, Daniel TaubFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The era of the white, all-male board is coming to an end.Goldman Sachs Group Inc. Chief Executive Officer David Solomon issued the latest ultimatum Thursday from Davos. Wall Street's biggest underwriter of initial public offerings in the U.S. will no longer take a company public in the U.S. and Europe if it lacks a director who is either female or diverse. Asia is not yet included in the firm’s new policy.The mandate is the latest in a series of signals that non-diverse boards and management are unacceptable. BlackRock Inc. and State Street Global Advisors are voting against directors at companies without a female director. Public companies with all-male boards based in California now face a $100,000 fine under a new state law. “It’s what big investors are looking for these days,” said Fred Foulkes, a management professor at the Boston University Questrom School of Business. “If the board has all white males, that’s a big negative.”Goldman Sachs acknowledged that “diversity” has other meanings around the world — including in Asia, where racial dynamics are different and gender disparities are sometimes even more glaring. The company said in a statement Friday that it intends to eventually expand its board-diversity mandate beyond the U.S. and Europe.The corporate board has become a rare bright spot for gender and racial diversity at the highest echelons of corporate America. Almost half of the open spots at S&P 500 companies went to women last year, and for the first time they made up more than a quarter of all directors. In July, the last all-male board in the S&P 500 appointed a woman. Still, new boards are less diverse: Among the top 25 IPOs by value each year from 2014 through 2018, 10 companies had no female directors, said Malli Gero, co-founder and senior adviser to 2020 Women on Boards, an organization that pushes for the Russell 3000 index to have at least 20% women directors on its boards. Last year, Goldman Sachs was hired to underwrite WeWork’s IPO, which only added a female director after its initial prospectus prompted criticism of its all-male board.“Starting on July 1st in the U.S. and Europe, we’re not going to take a company public unless there's at least one diverse board candidate, with a focus on women,” Solomon told CNBC Thursday. He didn't mention Asia, which continues to lag behind other regions when it comes to board diversity. Next year, the bank will raise the threshold to two diverse directors, which includes diversity based on sexual orientation and gender identity, Goldman said in a statement. The bank said the decision came after it learned more than 60 U.S. and European companies in the last two years went public without a woman or person of color on the board. Goldman Sachs has four women on its 11-member board.Among the IPOs where Goldman Sachs was an underwriter over the last two years in the U.S. and Europe, fewer than 10% currently have a board lacking a diverse candidate, the company said. Data was not available for the composition of those boards at the time of the IPO, the company said. “We realize that this is a small step, but it’s a step in a direction of saying, ‘You know what, we think this is right, we think it’s the right advice and we’re in a position also, because of our network, to help our clients if they need help placing women on boards,’” Solomon told CNBC. “So this is an example of us saying, ‘How can we do something that we think is right and help moves the market forward?’”JPMorgan Chase & Co. doesn’t have a similar policy to the new Goldman Sachs rule, but since 2016 has had a director advisory service that works to help companies find diverse candidates for their board, the company said in a statement. Morgan Stanley did not respond to requests for comment. For now, Goldman’s step is “pretty amazing,” said Boston University’s Foulkes, who was previously a director at Panera Bread Co. and Bright Horizons Family Solutions. “It's a seismic change.”(Clarifies second paragraph to show change refers to IPOs only. Adds quote in 7th paragraph. Adds reference to global diversity in 5th graf.)To contact the author of this story: Jeff Green in Southfield at email@example.comTo contact the editor responsible for this story: Rebecca Greenfield at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
With earnings surprise in the cards, the healthcare sector is expected to witness substantial earnings growth of 4.4% in the fourth quarter, suggesting some room for potential upside for healthcare ETFs.
Intel's (INTC) fourth-quarter 2019 results benefit from growth in the data-centric businesses, driven by robust adoption of high-performance products, including Xeon Scalable processors.
Fears that the coronavirus outbreak in China would have a severe impact on oil demand was enough to offset the impact of U.S. Energy Department's latest inventory release.
Britain's finance sector is losing hope of securing even basic access to European Union markets from Dec. 31, as talk that the EU wants UK fishing rights in exchange draws the industry into a political struggle between the bloc and its departing member. Hopes were high that Prime Minister Boris Johnson would prioritise the financial sector -- Britain's largest export industry and biggest corporate tax generator -- in trade talks. Until now, financial firms running EU operations from Britain believed that technical assessments by EU banking, insurance and markets regulators would be enough judge UK rules 'equivalent' to those governing EU-based firms, granting them market access after December.
J&J (JNJ) announces mixed Q4 results. Roche's (RHHBY) lymphoma drug, Polivy and Novartis' (NVS) Mayzent for secondary progressive multiple sclerosis (SPMS) get approval in Europe.
Higher sales of Pfizer's (PFE) key brands, Eliquis, Xeljanz, Ibrance in the Biopharma segment are likely to have made up for lower sales in the Upjohn group.
The traditional ways to plan for your retirement may mean income can no longer cover expenses post-employment. But what if there was another option that could provide a steady, reliable source of income in your nest egg years?
(Bloomberg Opinion) -- It’s easy to be cynical about the good intentions of a company caught up in one of the biggest frauds in history: the 1MDB scandal in Malaysia. Yet Goldman Sachs Group Inc.’s new stance on boardroom diversity shows how even the most profit-oriented of finance titans can — when pushed — further the virtues of stakeholder capitalism.Speaking at the World Economic Forum in Davos, where global leaders vowed to save humanity from climate change, Goldman’s chief executive officer, David Solomon, set forth a vision for his bank’s role in imposing better governance on its clients. From July it won’t manage the initial public offerings of American and European companies unless they have at least one non-white or non-straight male board candidate, Solomon said (the focus will be on women). In 2021, he’s going to “move toward… requesting two.”The move carries weight. Goldman is one of the top three IPO underwriters of the past decade, alongside Morgan Stanley and JPMorgan Chase & Co. It has an authority that wannabe public companies won’t be able to ignore.Going public is one of the critical junctures in a company’s history. It’s the moment when a century-old, family-owned widget maker, an upstart venture capital-backed tech unicorn, or a state-controlled behemoth, sets out on a course that will define its role in society for years to come. Getting the composition of its leaders right at the start sets the standard for what a company expects of itself just as it embarks on what’s often a period of rapid growth.Tech startups especially have been criticized for fostering a “bro’” culture that can be a hostile place for women, exemplified by Uber Technologies Inc. under the previous leadership of Travis Kalanick. But it’s not just about staff and society; shareholders will also benefit, according to Solomon. Companies with more diverse boards score better on measures of sustainability — an issue that’s increasingly important for asset managers. Broader representation has also been associated with higher profits and performance, although the empirical data is mixed.Goldman’s reputation could also use a little sprucing up, not only from the probes into its role raising money for the Malaysian investment fund 1MDB, but also around the subject of IPOs. It’s no coincidence that Solomon’s declaration follows two listing flops of epic proportions. Last year, his bank was one of the IPO underwriters for WeWork, which only added a female director after its first prospectus was pilloried. The deal was pulled eventually in part because of lingering governance concerns.International investors also spurned the biggest IPO of all time, Saudi Aramco, in part over concerns about controls and governance. Riyadh punished Goldman and its ilk by relegating them to the second-tier behind local banks, paying them considerably less after scrapping roadshows outside the Middle East.The two deals were embarrassments that Goldman will be keen to move on from by putting a more positive gloss on this part of the empire. What’s more, it’s unlikely to lose out on any big IPO business given the relatively modest ambition of its pledge. Of the listings managed by Goldman in the past two years in the U.S. and Europe, fewer than 10% had a board lacking a diverse candidate (many countries already enforce quotas). Half of the bank’s top-10 IPOs in 2018 and 2019 took place in Asia and the Middle East, regions not covered by Solomon’s promise. By flagging the more ambitious two-person target for 2021 now, Goldman is giving clients time to prepare. It’s also shrewdly reading where the “environmental, social and governance” trend is headed. Its first mover advantage may win it admirers among more enlightened startup companies and executives who have been weighing direct listings as alternatives to costly IPOs.It will take time for the “vampire squid” to shed its image as a pure opportunist, especially with 1MDB rumbling on. But whatever the motivation, pushing for greater diversity ups the collective pressure on other financiers to use their power for good. Over to you Morgan Stanley and JPMorgan.To contact the author of this story: Elisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.