Lai See

CLSA's Mike Mayo goes full circle on Citi view

PUBLISHED : Friday, 25 April, 2014, 12:11am
UPDATED : Friday, 25 April, 2014, 12:11am

Mike Mayo, CLSA's head of banking research in the US, has certainly had his ups and downs with Citigroup. In the years following the financial crisis he was relentless in his pursuit of the bank for what he deemed its poor management practices.

In 2012, he declared: "In Asia, Citibank is the Tiffany of banking, but its corporate governance is like a five-and-dime store in Park Avenue." Although his view on the bank has warmed following the arrival of Mike O'Neil as chairman in April 2012, he commented after the 2013 shareholder meeting when 90 per cent of shareholders approved the executive pay package: "Citi had the highest CEO pay over the last decade but with the worst bank performance. That was an insult to capitalism."

Earlier this week he said that this year's shareholder meeting reassured him that the stock could head to US$96 per share. "Over four years, we still think Citigroup stock can double. We think the story's delayed." As for the executives in charge: "I'd say I'm very happy seeing the chairman, Mike O'Neill, and the CEO, Mike Corbat, interact for two hours. This is a great working relationship." How times have changed.


A force for good

We've received a statement from the World Travel & Tourism Council (WTTC) calling on governments and the private sector to view the industry as a "force for good". "Travel and tourism has a unique power to be a force for good in a problematic and unpredictable world. Governments need travel and tourism to support the processes of nation building and disaster recovery. They need travel and tourism to provide bridges to increase international co-operation and to help foster greater understanding between societies." So says David Scowsil, president and CEO of the WTTC.

He complains that not all governments are taking the sector sufficiently seriously. This reminds us of Lloyd Blankfein, who some years ago famously said that Goldman Sachs was doing "God's work". Not many people took him seriously.



Readers will be aware that we have in the past complained about illegal parking and the lax attitude of the authorities in dealing with it. That said, we have to concede there are pockets of activity that are verging on the intense.

Our respondent from May Road in Mid-Levels has complained to the police about illegal parking in this area. He recently received a letter which said: "In the past three months, officers of Central District had been conducting daily patrols at the said location.

"A total number of 23 occasions of illegal parking were observed. Corresponding fixed penalty tickets were therefore issued each time. Police officers will continue to take appropriate enforcement actions in accordance with our Selective Traffic Enforcement Policy against illegal parking."


How bad are plastic bags?

We see that anti-plastic bag sentiment is sweeping the US. Since the beginning of the year Los Angeles has banned plastic bags at checkout counters of big retailers. US consumers handle 100 billion plastic bags a year, but usage is expected to decline as anti-plastic bag legislation spreads. This brings to mind a study in 2011 by Britain's Environment Agency which concluded that single-use polyethylene grocery bags have a lower carbon footprint than alternative or reusable bags. "We're not advocating their use but think the plastic bag's relative environmental status should be more widely understood," it says. "Lightweight single-use carrier bags have the lowest carbon footprint per bag based primarily on resources use and production."

Paper, heavyweight plastic and cotton bags all use more resources and energy in their production. A key issue, however, is how many times bags are reused, the report adds. In order to equal a high-density polyethylene (HDPE) bag used just once, the report says that a paper bag would need to be reused three times, a low-density polyethylene (LDPE) bag-for-life would need to be reused four times, a non-woven polypropylene (PP) one would need to be reused 11 times, and a cotton bag 131 times. If the HDPE bag is reused once, say, to put rubbish in, the number increases. The paper bag would have to be reused seven times, the LDPE bag nine times, the PP bag 26 times, and the cotton bag 327 times.


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