Hadas: A virus economic optimist partly recants 8 Jul 2020 Three months ago, it felt bold to predict little lasting damage from the pandemic. Money-fuelled markets have embraced that outcome, but pumped-up hopes are now too high. Global finance is undisciplined, fear and bitterness lurk, and governments may have gained too much power.
Corona Capital: Not so united 8 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: A potential round of cuts at United Airlines lays bare the pitfalls of the government being both savior and investor.
British public would end up paying for Huawei ban 8 Jul 2020 Prime Minister Boris Johnson is mulling whether to bar the Chinese group from the country’s 5G mobile network. Ripping out existing Huawei kit could cost operators BT and Vodafone an extra 1 bln pounds. The bill for a U-turn forced by U.S. sanctions will end up with taxpayers.
This Chinese stock pop has firmer fundamentals 8 Jul 2020 Indexes have spiked to levels not seen since 2015, and leverage is rising, adding to fears of a crash. Weakness in shadow banking and property are pushing speculative funds into shares, but the rally is underpinned by reforms accelerating a fundamental shift into equities.
Food rations point to India’s fiscal poverty 8 Jul 2020 New Delhi is handing out free grains to 800 mln people, a frugal way to support households. Two-thirds of citizens in the world’s fifth-largest economy are vulnerable to income shocks, but the small tax base constrains redistribution options.
Corona Capital: Texas hold it 7 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: The iconic State Fair of Texas has been canceled as coronavirus cases in the region soar. The decision adds some $500 mln to the Lone Star State’s economic and human toll from the pandemic.
China-UK feud could spill over into nuclear power 7 Jul 2020 The two countries are facing off over Huawei mobile phone kit and Hong Kong. China’s key role in new British nuclear power stations may be the next flashpoint. Unpicking the agreement would upend strategic plans on both sides. But rising tensions suggest a rethink is looming.
China’s firewall casts shadow over Hong Kong 7 Jul 2020 Twitter, Google and Facebook suspended cooperation with local courts as new rules allow police to seize assets and force sites to delete seditious content. Others such as Netflix stand to be affected, and blockages seem likely. That can only accelerate the exodus of talent.
Chinese IPO gives vaping a second, deep puff 7 Jul 2020 Smoore International has been valued at $9 bln in a Hong Kong listing after pricing its shares at the top of a range. The issue defies a global backlash against the battery-powered devices. At 19 times forward earnings, investors have helped to prop up a smoking hot valuation.
Sina’s terrible governance comes home to roost 7 Jul 2020 Less than three years after the Chinese web outfit inexplicably handed control to boss Charles Chao, he wants to take it private. The $2.7 bln offer is at a 20% discount to Sina’s stake in microblog Weibo. Supervoting stock and a weak board put minority holders in a tight spot.
Japanese bond market shift spells stronger yen 7 Jul 2020 Central bank boss Haruhiko Kuroda has kept yields on 10-year debt near zero but let those on longer-dated ones rise. Now most of Japan’s yield curve is above that of France. Dwindling returns on overseas bonds could reduce local demand for foreign currency, sparking a yen rally.
Corona Capital: Disney/“Hamilton”, U.S. housing 6 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: “Hamilton” reinvigorates Walt Disney’s digital-download challenge, and America’s stay-at-home rules may mean there’s pent-up demand for real estate and home improvement.
OneWeb’s relaunch shortens distance to profit 6 Jul 2020 The satellite startup is back in the internet space race with $1 bln from India’s Bharti - the world’s third-largest telco - and the UK government. The deal will shore up future revenue, reducing risks for investors going head-to-head with Jeff Bezos and Elon Musk in orbit.
Chip IPO tests Hong Kong-China feedback loop 6 Jul 2020 SMIC more than doubled its Shanghai offer to $6.6 bln on strong demand. Its Hong Kong shares had risen sharply ahead of the mainland listing valuing the semiconductor maker at 100 times forecast earnings. That’s hard to justify, even with Beijing’s aim of tech self-sufficiency.
Corona Capital: Quarantines, UK bailout, Drugs 3 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Britain relaxes its “bonkers” quarantine rules; a small UK bailout sets a troubling transparency precedent; and India’s drugmakers click into dealmaking mode.
Sea’s $55 bln valuation can rise with the tide 3 Jul 2020 The Tencent-backed tech outfit’s market cap has risen eight-fold in the three years since its New York debut. A virus-related boom in games and e-commerce in Southeast Asia has helped justify a rapid rise, and expansion plans are on. Its payments unit may provide an extra buoy.
Tencent’s hot sauce fraud exposes expired tech 3 Jul 2020 The Chinese video-games titan appears to have been taken by crooks pretending to work for Lao Gan Ma, a popular spicy condiment, using a forged company seal to ink an advertising deal. Such old-fashioned methods have embroiled others including SoftBank. Digitisation is overdue.
Viewsroom: Wirecard, Hong Kong and Tesla 2 Jul 2020 The German fintech scandal shines a light on its hapless regulator; China’s new security law stinks up the fragrant harbor and Elon Musk hasn’t just surpassed Toyota in market value, he’s becoming as rich as Croesus. Breakingviews columnists around the world weigh in.
Corona Capital: Tesla, OPEC 2 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Tesla speeds past its traditional rivals, and OPEC’s next meeting shapes up to be a bruising encounter.
Pinduoduo is stuck in startup governance mode 2 Jul 2020 China's e-commerce darling has swapped its founder CEO for the other co-founder. The pair wields supervoting stock and controls the board. The $100 bln company doesn’t even have a CFO or other top executives. They need to upgrade management, but this is an odd way to start.