BREAKINGVIEWS

Inditex injects doubt into smooth-running machine

30 Nov 2021

Spain’s $100 bln fast fashion group replaced Executive Chairman Pablo Isla with founder Amancio Ortega’s daughter, Marta. Its valuation reflects investor faith in Isla’s digital strategy, which helped Inditex weather Covid-19. The abrupt pivot to untried leaders will test that.

Glencore’s activist is misguided but not unhelpful

30 Nov 2021

Bluebell is pushing the $63 bln miner-trader to spin off coal. Thungela’s plans to dig up more of the mineral after its Anglo spinoff weaken the argument, and prices are at record highs. Still, if it makes Glencore quit coal quicker than its 2050 target, it’s a job well done.

Nissan’s green drive hits yellow light

30 Nov 2021

Shareholders booed the Japanese automaker’s plan to invest $18 bln in clean cars over the next five years and make half its fleet electric by 2030. The erstwhile electric-car leader wants to regain ground, but it’s a financial stretch with profit weak and the stock overvalued.

China property bond rejig is destined to fail

30 Nov 2021

Developer Kaisa wants holders of $400 mln in notes to extend for 18 months. They’d get no real sweetener and would be pushed behind $3.6 bln of other maturing debt. Boss Kwok Ying-shing went through a $2 bln restructuring in 2015. Now he seems on course for a $12 bln repeat.

Retail has golden opportunity to stay in the black

29 Nov 2021

American consumers are on track to spend record amounts during the holiday season, despite scarce discounts and low confidence. That suggests retailers have some pricing power, which at least gives them some room to offset the squeeze they’re facing from workers and suppliers.

Jack Dorsey leaves one company, helps out two

29 Nov 2021

Twitter is better off without its co-founder, who was also busy being CEO of fintech firm Square. The $38 bln social network hasn’t set a clear strategic direction, unlike rival Facebook. Square, meanwhile, could use the extra attention as it faces a growing crowd of rivals.

Omicron may give inflation a chance to bed in

29 Nov 2021

The new coronavirus variant could ease short-term price pressures if it triggers wider lockdowns that curb consumption. But if it prolongs supply-chain problems the reverse will be true in the longer term. Especially if cautious central bankers delay tightening monetary policy.

Telecom Italia will keep bankers busy in 2022

29 Nov 2021

KKR’s $12 bln proposal has put the telco in play. The process is likely to involve multiple bidders and key actors including French shareholder Vivendi and the Italian government. As with Telecom Italia’s 1999 leveraged takeover, it’s a boon for bankers, lawyers and consultants.

Mukesh Ambani BT bid would struggle for clear line

29 Nov 2021

His Reliance would earn a so-so return buying the UK telco’s enterprise for 38 bln pounds. It’d be a distraction for his energy-to-retail conglomerate’s huge India ambitions too. He can more comfortably get a taste of a rich market by narrowing his focus to BT’s broadband unit.

China’s bet on Covid-zero worsens odds for Macau

29 Nov 2021

Beijing’s draconian restrictions are a growing problem for Wynn, Sands, and other casino operators in the gambling hub. Resorts sit half-empty with gaming at 30% of pre-pandemic highs. They can live without foreign tourists, but local visitors are their lifeblood.

New Covid-19 variant raises risk of recovery limbo

26 Nov 2021

Britain and others have revived travel bans on South Africa amid a new viral mutation. Countries with low vaccination rates are most vulnerable. But if the virus evades vaccines, new lockdowns may be necessary at a time when governments and central banks have depleted firepower.

UK energy shakeout will hit price comparison sites

26 Nov 2021

Britain is pumping $2.3 bln into collapsed gas and electricity provider Bulb, the latest in a string of bankruptcies. The clear-out should mean a healthier array of UK energy suppliers. But having fewer operators will hurt the firms that make their money from customers switching.

SenseTime IPO could help HSBC gain recognition

26 Nov 2021

It’s the only Western lead adviser on the AI dragon’s mooted $2 bln Hong Kong market debut. The issuer’s spot on a U.S. blacklist adds a degree of difficulty to the large Chinese stock sale. That makes it an especially bold way to showcase renewed investment banking ambitions.