CEO Daily: Monday, March 14
Good morning, CEO Daily readers. Alan Murray is on vacation. Deputy Editor Clifton Leaf is subbing in for the week.
Two separate terror attacks claimed the lives of dozens of people on Sunday. In Ankara, Turkey, a car bomb, powerful enough to be heard several kilometers away, was detonated in a crowded square, killing at least 34 people and wounding scores. And in Ivory Coast, gunmen fired indiscriminately at beachgoers at three hotels in Grand-Bassam, killing at least 14 civilians and two soldiers.
Al-Qaeda in the Islamic Maghreb claimed responsibility for the attack in Ivory Coast, which is the group’s third deadly raid at a West African resort since November. It is still not clear who is responsible for the attack in Ankara, though it follows several other recent bombings in the Turkish capital, including one that killed nearly 30 people in February. (The Turkish government, for its part, is striking back at Kurdish bases in Northern Iraq.)
In both of yesterday’s assaults, however, the targets were the same: civilians. And so was at least one of the aims, it would seem: to draw the world’s attention away from another, long-running conflict that may be fitfully—and perhaps only temporarily—breaking into peace. As a fragile ceasefire holds (somewhat) in Syria’s bloody civil war—which turns five years old on Tuesday—U.S. Secretary of State John Kerry and envoys from Russia, France, the U.N., and various Syrian factions, have gathered in Geneva to restart peace talks that fell apart in early February. Negotiations are set to resume today.
Meanwhile, candidates for America’s highest office frantically criss-cross Florida, Ohio, Illinois, Missouri, and North Carolina, searching for the last undecided voters before the electoral bonanza tomorrow. For Republicans, 367 delegates are at stake—two-thirds of which can be claimed in winner-take-all or winner-take-most contests. For some context, only 91 delegates separate Donald Trump from his closest competitor, Ted Cruz.
More news below.
• China firm buys U.S. hotel operator
Anbang Insurance Group Co. has agreed to pay $6.5 billion to buy 16 U.S. luxury resorts and hotels from Blackstone Group, a deal that marks a record transaction for Chinese buyers of American real estate. The pending purchase of Strategic Hotels & Resorts will give Anbang trophy properties across the U.S., and the deal tops the Beijing-based insurer's $1.95 billion acquisition last year of New York's landmark Waldorf Astoria hotel. Blackstone, which finalized a deal for Strategic Hotels just three months ago, had been seeking buyers for individual properties. Bloomberg
• Valeant investors want more details
Drug company Valeant Pharmaceuticals is under pressure from investors to introduce more transparency into its operations and expand its management ranks to regain credibility in the investment community, Reuters reports, citing people familiar with the situation. Those new measures include providing more details of Chief Executive Michael Pearson's recent illness, which sidelined him for at least two months. Investors are on edge as Valeant's shares have lost 73% of their value since August as it faced growing scrutiny over its drug pricing and its connection to a specialty pharmacy. Reuters
• Whistleblower sues VW after being fired
A whistleblower has sued Volkswagen, alleging that he was fired after trying to stop the company deleting evidence relevant to U.S. authorities’ investigations into excess emissions by its cars. The news is the latest evidence of less than wholehearted cooperation by Germany’s largest automaker with the authorities, and as such may have a bearing on the final size of the financial penalties imposed on it. The employee, who worked in a data center for Volkswagen in Michigan, claims the company had carried on deleting data for weeks after an order from the Department of Justice on Sept. 18 to stop routine data deletions. The suit alleges that VW had internally justified its actions by citing "a lack of storage space." Fortune
• IMF backs unconventional policies
Unconventional monetary policies of central banks in Europe and Japan received an endorsement from the International Monetary Fund on Sunday, even as policymakers from emerging markets warned that such policies were increasing risks for the global economy. The debate over the merits of unconventional policies comes days before major central banks such as the U.S. Federal Reserve, the Bank of England and the Bank of Japan unveil their interest rate decisions. And while negative interest rates in Europe and Japan are bringing yield-chasing investors into emerging markets (or keeping them there), their policymakers fear further interest rate increases in the United States could ignite massive outflows. Reuters
Around the Water Cooler
• The buyers keeping the bull market alive
Standard & Poor’s 500 Index constituents are poised to repurchase as much as $165 billion of stock this quarter, approaching a record reached in 2007. They are essentially propping up the bull market as it enters its eighth year: the buying from corporations contrasts with rampant selling by clients of mutual and exchange-trade funds who, after pulling $40 billion since January, are on pace for one of the biggest quarterly withdrawals ever. One equity research director sums up the worries about this trend neatly: “Over time, you come to the realization, ‘Look, these companies can’t grow. Borrowing money to buy back stocks is going to come to an end.”’ Bloomberg
• Google's Schmidt weighs in on AI
Alphabet chairman Eric Schmidt acknowledges that artificial intelligence (AI) will threaten many people’s jobs, but he sees this displacement as part of a “natural next step” for humanity. Schmidt’s words, reported by the Telegraph, came as he visited Seoul to see AlphaGo, a Go-playing AI developed by Google-owned DeepMind, take on world champion player Lee Sedol (at the time of writing, Lee was down one game to three). The Alphabet chair said AI would eventually be embedded in everything the Google parent does. The field of research, meanwhile, has seen rapid advances in recent years – causing experts to re-evaluate the possible future we could be facing. Fortune
• Ryanair's new, nicer strategy
Ryanair, Europe's big no-frills budget carrier, has won a lot of business by offering very low prices but charging for almost everything on top of the price of the ticket. The business model has turned the 32-year-old Ryanair into Europe's second-biggest airline by passengers flown, only trailing Deutsche Lufthansa. But a recent price war has threatened Ryanair's success, and to win back customers, the airline relaxed onerous hand-luggage restrictions and redesigned the company's cumbersome website. It also cut fees and told staff to be less confrontational. “If I had only known that being nicer to our customers was good for business I would have done it years ago,” Chief Executive Michael O'Leary said. The Wall Street Journal (subscription required)