Via Financial Times

This time last year global stock markets had just endured a big sell-off. Macro worries included the US-China trade war and Brexit. Twelve months on, neither is resolved positively. Chinese economic growth has since fallen to its lowest level in 30 years. German business confidence has descended into deep gloom. But despite all of this there has been some cheer and plenty of action in the business world in 2019.

Public display of affection?

Public market investors have complained for years that stock markets are being hollowed out in a spate of mergers, take-privates and stubborn unicorns. Much of that trend continued in 2019. The UK, for example, saw a series of privatisations, of Legoland-owner Merlin Entertainments, defence contractor Cobham and satellite company Inmarsat. But we did finally see some replenishment. Lyft and Uber floated, with the two ride-hailing companies vying for public investors instead of passengers. It has not gone brilliantly, however: their stocks are both down by a third. Slack, the office messaging company, has fallen 45 per cent.

But at least they got away

Histogram showing how Saudi Aramco's net profits dwarfs the most profitable companies in the world

It took months of delays for Saudi Aramco to list and achieve the $2tn valuation sought by Prince Mohammed bin Salman. But does it really count? The state-owned oil company had to give up on a foreign listing and stick to Riyadh, where it lent heavily on local investors. Many international institutions balked at a combination of valuation and governance concerns. Only a sliver of the company is freely traded.

We didn’t work

Signage is displayed on glass doors at the WeWork Cos. 32nd Milestone co-working space in Gurugram, India, on Monday, Feb. 18, 2019. The New York-based co-working giant WeWork Cos, which operates shared office spaces around the world, has attracted huge piles of investor money, which it uses to snap up office space in the largest cities on earth. Photographer: Ruhani Kaur/Bloomberg
© Bloomberg

The kingdom suffered an indirect blow from another — far more spectacular — botched IPO this year. WeWork’s flotation was the biggest test yet for its main backer, the $100bn SoftBank Vision Fund, whose biggest investor is Saudi Arabia. A lot of people said WeWork was an overvalued property group, whose business model of taking long-term leases, sprucing them up and reletting them on a short-term basis was flawed. But not many people predicted the IPO itself would fail. Investors had no interest in buying in at SoftBank’s $47bn valuation but nor did investment bankers elicit sufficient interest at $20bn or less. In the end, the IPO was not possible and founder Adam Neumann departed the company. SoftBank slashed the valuation to $5bn.

Graphic showing how IPOs in 2019 priced when coming to the market

The tail that . . .

SoftBank is persevering. It abandoned Wag, its dog-walking start-up, but increased its bet on Oyo, its Indian hotels business. Meanwhile, it is trying to raise money for a second big tech fund and hoping that chief executive Masayoshi Son can pick just one knockout winner — as he did so successfully with Alibaba — to redeem the grand project.

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Positive outlook

A graphic with no description

As some of the unicorns struggled in the public glare, other old stagers of the tech sector shone. Apple added $400bn in market capitalisation despite an unremarkable year for hardware releases. Microsoft briefly became the world’s most valuable public company and now has almost $1.2tn in equity value, a remarkable feat 20 years after its previous era of dominance. The company that milked its monopoly in the 1990s has managed to evolve under chief executive Satya Nadella as computing has shifted to the cloud.

House of Wirecard

Europe is hardly awash with tech champions but Germany has been able to boast a rising star. However, Wirecard, the financial technology group that climbed into the Dax 30, has had a tough year. The Singapore police raided its offices after an FT investigation into its accounting. Meanwhile, Wirecard critics were placed under surveillance by the former head of Libyan intelligence.

Spy drama in Zurich

In another corporate spying case, Credit Suisse hired private investigators to follow Iqbal Khan, its head of private banking. The tailing ended in a public confrontation in central Zurich. Police were called. And the fallout threatened chief executive Tidjane Thiam. In the end, Mr Khan moved to a senior role at UBS.

Is he worth that much?

Moving from a senior role at UBS was Andrea Orcel, who was unveiled in 2018 as the new chief executive of Santander. Yet in January this year the bank changed its mind, balking at a €50m signing-on bonus that was meant to cover the cost of unvested stock Mr Orcel lost on leaving UBS. Legal action continues.

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US banks beat the Europeans

Bank valuations worldwide - Price to book value and return on equity

Elsewhere in banking, the transatlantic divide that has defined much of the past decade continued. Deutsche Bank announced more job cuts and HSBC’s interim chief Noel Quinn ignored the impermanent nature of his title as he launched a sweeping restructuring. In the US, though, the likes of JPMorgan Chase and Bank of America posted more record profits as the US economy kept humming. Goldman Sachs agonised on how to return to the glory days: should it go bigger into consumer banking or build the next Blackstone? We should find out more at the long-awaited investor day in January.

Fair exchange?

A London Stock Exchange sign sits on glass in the atrium of the London Stock Exchange Group Plc's offices in Paternoster Square in London, U.K., on Monday, July 25, 2016. Deutsche Boerse AG has yet to secure shareholder acceptance for its 10.6 billion-pound ($13.9 billion) takeover of London Stock Exchange Group Plc, although it edged closer with 55.5 percent of investors giving it the go ahead. Photographer: Chris Ratcliffe/Bloomberg
© Chris Ratcliffe/Bloomberg

The FT revealed in July that the London Stock Exchange was in talks to buy Refinitiv, the data group carved out of Thomson Reuters last year. The all-share deal was confirmed at $27bn. But then in September came an attempted spoiler. Hong Kong Exchanges and Clearing went public with a £32bn bid to buy the LSE — on condition it dropped the Refinitiv deal. It was seen universally as audacious but also by many investors as far-fetched, not least because it would need regulatory sign-off in the UK just as protesters thronged the streets of Hong Kong complaining about Beijing violating the “one country, two systems” arrangement.

Car mergers

The global car industry is in trouble. China has slowed down. And the cost of investing in electrification is frightening. The only response seems to be consolidation. With last year’s death of Sergio Marchionne and arrest of Carlos Ghosn, it has fallen to a new generation of automotive leaders to plot different combinations.

Tesla keeps motoring

Tesla co-founder and CEO Elon Musk speaks in front of the newly unveiled all-electric battery-powered Tesla's Cybertruck with shattered windows, after a failed resistance test, at Tesla Design Center in Hawthorne, California on November 21, 2019. (Photo by FREDERIC J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)
© Frederic J Browne/AFP/Getty

Elon Musk had his day in court and won a defamation case. Tesla kept motoring, with the stock hitting new highs, despite an awkward presentation of a new truck in which a metal object was hurled at the unsmashable windows. It smashed them. Twice.

Shale skids

The shale revolution has been a huge factor in the US economy for the past decade, bringing a surge in oil and gas production. But glut caused big problems for shale producers this year and in December Chevron announced a $10bn writedown for assets in Appalachia. 

Line chart of Millions of barrels a day  showing US oil production continues to climb

Streaming wars intensify

The streaming wars drew in more well-funded combatants as Disney and Apple launched online video services to take on Netflix. With its vast back catalogue and ownership of the Star Wars series, Disney’s launch was seen as the more impressive. Yet Netflix suffered fewer customer defections than feared.

Graphic on streaming and TV viewing habits

Boeing flails

A second Boeing 737 Max passenger jet crashed in March, with the loss of all 157 people on board. The manufacturer’s anti-stall system was implicated, as it was in a 2018 crash in Indonesia. Faulty systems were redesigned but Boeing failed to respond decisively. The planes remain grounded and the investigations have uncovered worrying evidence about the construction and regulation of US aircraft.

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Big Four cut down to size

It was another unhappy year for much of the accounting industry. A spirit of austerity meant that KPMG told hundreds of employees to hand back their work mobile phones. There is still a looming threat from a UK government review, which could force a split of audit and consulting at the largest accounting firms.

Big Pharma looks to biotechs

The biggest deal of the year (so far) came right at the start, with Bristol-Myers Squibb paying $93bn for Celgene. It was an example of big pharma raiding the labs of biotechs in search of the next generation of blockbusters. In a similar vein, Novartis agreed to buy The Medicines Company for $9.7bn last month.

Arnault put a ring on it

Dot plot showing LVMH's diverse acquisitions since 1996

The world’s biggest luxury goods company shrugged off trade wars and gloom with double-digit sales growth. LVMH then did some shopping for itself — popping over to New York to buy Tiffany in a $16.6bn deal.

Thank you for reading this year. If you have thoughts on our business coverage — positive or negative — please get in touch. Have a happy Christmas.

tom.braithwaite@ft.com

Chart showing The FT published more than 4,800 articlesin the Companies section in 2019, spanning subjects from financial services to climate change. This graphic illustrates some popular themes covered during the year, with the larger circles reflecting a higher number of published articles on particular topics