BREAKINGVIEWS

U.S. gloves are off with sanctions on HK leader

7 August 2020

The Treasury is targeting Carrie Lam, Hong Kong's chief executive, and other officials accused of undermining the territory’s autonomy. It follows blows to Chinese apps WeChat and TikTok. Previous hits had been tolerable for Beijing but it’s now harder to avoid confrontation.

ICE deal risks giving private equity a good name

7 August 2020

Thoma Bravo is making around a fourfold return in 16 months selling mortgage processor Ellie Mae to the bourse operator for some $9 bln plus debt. But ICE boss Jeff Sprecher isn’t overpaying. The pandemic, low rates and the target’s growth make this a smart deal for all.

Investors launch Rocket IPO into high orbit

7 August 2020

The largest U.S. mortgage lender ended its first day as a public company worth $43 bln. It’s justified if its stellar second-quarter results are sustainable. But chances are the three months were an industry anomaly, meaning gravity will soon pull shareholders back down to earth.

Trump’s swipe at Tencent hits China’s softest spot

7 August 2020

The White House will block “transactions” with the $687 bln tech giant. That could cripple its WeChat app outside China and put a vast portfolio of investments at risk, including Fortnite creator Epic Games. The ban could sting China harder than the campaign against Huawei.

Richemont tries luxury goods thinking for shares

7 August 2020

The Cartier owner likes to sell glittery things for more than they’re objectively worth. In a similar spirit, a proposed “shareholders’ loyalty scheme” gives three-year warrants to compensate for a 50% dividend cut. But any gains on the warrant are a cost to future shareholders.

UniCredit can play in Italy’s great bank M&A game

7 August 2020

Intesa Sanpaolo’s takeover of UBI creates pressure for more mergers. By shunning domestic deals, its $21 bln rival risks missing out on cost and capital benefits. Combining UniCredit’s Italian business with a local bank could free CEO Jean Pierre Mustier’s hand for deals abroad.

Uber’s post-Covid prognosis is far from all clear

6 August 2020

The $60 bln ride-hailing app's second-quarter revenue fell 29%. That may mark the bottom. But despite CEO Dara Khosrowshahi's efforts Uber is still Exhibit A for the lack of benefits extended to gig workers. Washington is unlikely to rubber-stamp its deal for Postmates, either.

CalPERS CIO was too careless to be so bold

6 August 2020

Making controversial changes at America’s biggest public pension fund may be necessary. But if Ben Meng was going to do it – despite prejudice about his Chinese connections – his own behavior needed to be unimpeachable. His exit suggests he missed that lesson.

U.S. white-collar jobs hit demands bailout rethink

6 August 2020

Low-wage workers have been hurt the most in the pandemic. But the infection has spread to higher earners in tech and other sectors where hiring has also fallen sharply. If lawmakers debating aid for the most vulnerable don’t widen its reach, they risk a slower economic recovery.

Blackstone adds to Ancestry’s dog-show lineage

6 August 2020

Stephen Schwarzman’s firm is the latest well-heeled, but somewhat interchangeable private-equity owner of the genealogy site. Steady cash flow and an aging population explain the continuing appeal. Pandemic boredom presents a new opportunity, but at a hefty $4.7 bln valuation.

Glencore’s Glasenberg shows odd dividend caution

6 August 2020

The gunslinging boss of the big miner-trader is holstering this year’s $2.6 bln dividend. The company blames coronavirus uncertainty, but Glencore’s cash flow is holding up and metal prices are mostly recovering. The South African may be bracing for a hefty U.S. corruption fine.

Pompeo’s Chinese web wall is a tall order

6 August 2020

The U.S. Secretary of State's "Clean Network" initiative wants to purge America’s internet of Chinese telecoms, apps, and cloud services. Washington aims to ring-fence the People’s Republic, and Mike Pompeo is seeking allies. The costs for companies on both sides could be high.

Hammerson asks investors to catch a falling knife

6 August 2020

The UK mall operator will raise 825 mln pounds through a deeply discounted rights issue and sale. That should keep debt under control. However, the group must still sell assets when Covid-19 and online shopping are hurting stores and property values remain in flux.