BREAKINGVIEWS

Illumina thumbs its nose at slowcoach trustbusters

24 September 2021

The gene sequencing firm closed a $7 bln deal without EU approval. Illumina is confident in approval, or at worst, forced divestment at a premium. Illumina may be right that antitrust moves slower than technology, but its insouciance isn’t necessarily great for shareholders.

The smarter way to avoid energy crises: use less

24 September 2021

Soaring power prices have prompted calls to build more wind turbines, hike gas storage, or revive nuclear energy. But a big push to make buildings, industry and transport more efficient could help halve global demand by 2050. It’s something governments can act on straight away.

Dutch lingerie sale looks surprisingly chaste

24 September 2021

Sexy-underwear seller Hunkemoller is on the block after a post-pandemic rebound. Owner Carlyle’s digital push is helping it win market share. Yet investors seem more excited by trendy sportswear than saucy lingerie. Capping the price at 1 bln euros looks suitably modest.

New light emerges from China’s shadowy shoppers

24 September 2021

Cross-border traders known as daigou have been hurt by the pandemic, curbing sales of everything from A2 milk powder to Gucci handbags. Shrinking this once-thriving grey market will come at a cost, as evidenced by one Aussie company. Lower risks and clearer pictures are worth it.

Pan-Asia insurers helpfully crowd onto bourses

24 September 2021

Just days after Prudential tapped Hong Kong for fresh funds, Richard Li’s FWD filed for a New York IPO valuing it at up to $15 bln. The upstart is smaller than its $50 bln rival or $137 bln AIA but at last the three offer a way of comparing performance in the fast-growing region.

Turkey goes deeper into parallel monetary universe

23 September 2021

Ankara cut its main policy rate to 18% from 19%, kowtowing to President Erdogan just as other central banks take the opposite tack. A weaker lira and soaring energy bills add to the economy's inflation pains. With two years to another election, there’s little respite in sight.

Wildfire insurance heading same way as flood cover

23 September 2021

Hurricanes are growing stronger and wildfires bigger. That means larger, less predictable losses for insurers. Canceled policies and higher premiums tempt governments to intervene. As federal U.S. flood insurance shows, that’s a recipe for underpriced coverage and delayed action.

Transitory inflation is a fig leaf that’s slipping

23 September 2021

The Fed, ECB and Bank of England reckon strong price pressures are a temporary phenomenon. But new forecasts and comments suggest inflation overshoots may persist next year, and last even longer in America. That’s hardly short-lived. Pretending otherwise will lead to problems.

Three-way sports bet fight may end in a stalemate

23 September 2021

The battle for control of Entain hinges on the UK bookie’s U.S. joint venture. Current partner MGM is unlikely to pay for control of the unit, probably worth $13 bln. But suitor DraftKings may need the cash to help fund its $22 bln bid. The odds of a successful deal look long.

Credit markets will withstand Evergrande shocks

23 September 2021

The global corporate bond market has barely flinched at the crisis at the Chinese property developer, which is a big issuer of junk debt. Loose monetary policy, healthy company balance sheets, and a hunt for yield explain the nonchalance. This will encourage more risk taking.

Elliott’s UK power play rests on blue-sky thinking

23 September 2021

The activist has built a stake in SSE and may seek a spinoff of its renewable generation arm. That could hike the $23 bln utility’s value. But it requires hefty assumptions about wind growth, and the state’s readiness to allow tinkering of a stable model amid an energy crisis.

Fiat offspring are racy hedge against anti-rich Xi

23 September 2021

BMW, Mercedes and others would be hit hard if China’s “common prosperity” drive extends to premium vehicles. Ferrari can power through, while Stellantis’ low sales in the world’s top car market would offer investors cover, if rivals don’t offload vehicles on the cheap elsewhere.

Wanted: Exxon-like activism at top Aussie polluter

23 September 2021

AGL’s investors have warned the $2.6 bln energy giant to up its game on climate change. Poor strategy, including a bungled coal spinoff, has halved its market value in 2021. An activist-led shakeup of its underwhelming board, as at the U.S. driller, would bring needed change.