Blockchain will finally make itself useful 31 Dec 2018 The distributed-ledger technology associated with bitcoin is due a breakthrough in 2019. Banks and companies are gradually applying versions of it to tasks like settlement. Demonstrating blockchain’s utility, though, will say little about the value of cryptocurrencies themselves.
A made-in-America market will be a distorted one 31 Dec 2018 An all-U.S. iPhone X, if even feasible, could double the current $1,000 price tag. Argentina's cellphone experiment early this decade is a useful comparison. It shows how Donald Trump's import restrictions, taken to their logical end, will only create a dysfunctional economy.
Euro faces tough adulescence 31 Dec 2018 The currency enters its third decade with flaws that date back to conception. They were fully exposed after early market successes gave way to a teenage existential crisis. These weaknesses have the power to ruin adulthood as the drug of cheap central bank money slowly runs out.
A plucky local upstart will take on Macau’s moguls 31 Dec 2018 Regulators in the world’s largest gambling hub could allow new players onto the casino floor when licenses expire in 2020. With frayed U.S.-China relations dealing American giants Sands and Wynn a weak hand, homegrown names like Suncity and Golden Dragon will try their luck.
Tallying our 2018 predictions hits – and misses 31 Dec 2018 Looking back at last year’s forecasts, our crystal ball produced some hits: Presidents Trump and Xi unsettled global growth, bitcoin bombed, scandals rocked Japan, and #MeToo broke into the boardroom. But halting Saudi reforms and drooping Apple shares were among the bloopers.
Larry Ellison is anything but a check on Elon Musk 28 Dec 2018 The Oracle founder calls himself a “very close friend” of the Tesla CEO and owns nearly $1 bln of the automaker’s stock. He also shares an imperious style and penchant for outsized pay. Musk’s SEC deal mandated an independent director, but Ellison is unlikely to rein him in.
Aphria bid takes weed M&A to new level of chutzpah 28 Dec 2018 Pot retailer Green Growth is mulling a hostile all-stock bid for the $2 bln Canadian grower. Synergies are negligible, the 46 pct premium is illusory and the target would lose listings in New York and Toronto. A brave try, but one Aphria would have to be high as a kite to accept.
Brazil will get energy mostly right; Mexico won’t 28 Dec 2018 New regimes of opposing ideologies in Latam’s two biggest economies will wrestle with balancing 1970s-style nationalism against the need to open up to foreign and private capital to exploit their oil and gas resources. Brazil’s far-right president-elect has the better prospects.
Boardroom brawls will be child’s play to politics 28 Dec 2018 Starbucks’ founder, hedgie Tom Steyer, Mike Bloomberg and Mark Cuban are mulling U.S. presidential runs. Billionaires selling coffee, data or stocks may not find their skills useful in a bruising political race with 30-some Democratic candidates calling out their immense wealth.
EU investment banks face the regulatory microscope 28 Dec 2018 With the region’s bad-debt crisis on the wane, supervisors will shift their focus to probing lenders’ risk models and 132 billion euros of hard-to-value assets. For banks which had previously relied on their own guesstimates, that could mean higher capital charges.
China will outdo U.S. in scramble for Africa 28 Dec 2018 Beijing will cement its position as the leading power on the continent, countering a U.S. pushback. Besides flexing muscles from Djibouti, its first overseas base, China will squeeze U.S. firms out of commercial and mining deals as tensions take on a Cold-War tinge.
ByteDance will take over B in China’s BAT 28 Dec 2018 The fast-growing startup behind AI-powered news and video apps Toutiao and TikTok is valued at $75 bln, on par with Baidu. Marketing and tech synergies would benefit both if ad spending falls. A 2019 merger will help rebalance the power with acronym partners Alibaba and Tencent.
Expect a Macquarie 50th anniversary deal 28 Dec 2018 The Aussie financial conglomerate has routinely embarked on strategy-shifting acquisitions, including asset management and energy trading, since it began in 1969. Local banks are hurting now. Buying one will be new boss Shemara Wikramanayake’s half-century gift to shareholders.
Welcome the new AI investment overlords 27 Dec 2018 Man vs. machine will replace active vs. passive as the dominant battle in the $80 trln money-management war. Pressure to cut costs keeps mounting while artificial intelligence gets better at systematic trading, crunching data and identifying trends. Logic favors the computers.
The Exchange: How corporate competition died 27 Dec 2018 Jonathan Tepper’s book “The Myth of Capitalism” is full of scary facts: two companies control 90 pct of America beer, while five banks account for half the country’s banking assets. He joined Breakingviews to explain the inexorable rise of monopolies and what we can do about it.
Weed, China, guns and money lead most-read stories 27 Dec 2018 We promised 2018 would bring “Froth and Frustration,” and that’s just what readers got. Other topics that piqued your interest: Rising populism in Italy, Brazil and France; Broadcom’s doomed bid for Qualcomm and the sale of Refinitiv by Breakingviews’ parent. Plus, fake meat.
Small nations will lose most from U.S. WTO fight 27 Dec 2018 The global trade body’s appeals panel may become paralyzed because of U.S. obstinacy. America, China and the EU can wring commerce concessions without filing complaints. Minnows like Panama and Moldova lack other recourse and will suffer if trade turns into a free-for-all.
Gatwick’s new French pilot has tougher flight path 27 Dec 2018 Construction group Vinci is paying $3.7 bln for a majority stake, days after the London airport grounded flights due to stray drones. The price looks toppy given Gatwick’s already-slick operation and Brexit uncertainties. Seller GIP and its co-investors had a better landing.
Deutsche Bank will be unlikely 2019 trading star 27 Dec 2018 Europe’s largest investment bank is undergoing its second restructuring in as many years under new boss Christian Sewing. Torrid trading means the lender trades at a fraction of book value. But its business mix should do especially well from currency volatility and rising rates.
Investors will swap City offices for Euro sheds 27 Dec 2018 Yields on shiny London real estate are on the floor, and Brexit could affect sky-high capital values. Luckily, those looking to invest in property in 2019 have a Plan B. European warehouses are both cheap and likely to gain from an ongoing surge of online commerce.
Asia’s tech titans face Nissan-style key-man risk 27 Dec 2018 Startup founders have flourished in the region, taking over where old-school tycoons left off. Yet after Carlos Ghosn and a storm at JD, shareholders see charismatic bosses as liabilities too. Such concerns may mean unwanted attention at SoftBank, Foxconn and others in 2019.
Tencent will become world e-sports champion 27 Dec 2018 The global $1 bln competitive video-game market will reach a new level in 2019. As audiences for “League of Legends” tournaments pull even with the NFL, ad revenue will post explosive growth. That will fund Tencent’s expansion of its overseas franchise.
Samsung faces ghost of technology future 27 Dec 2018 South Korea's $230 bln giant is hurting with a fall in memory chip prices and uncertainty about future growth. U.S. rival Intel missed the mobile boom. To avoid a similar fate, heir Jay Y. Lee needs to spend some of its cash hoard to catch up with nimbler rivals in AI and 5G.
A Trump versus Xi wrestling match might just help 26 Dec 2018 Maybe not a real one. But Tencent could tag-team with WWE to build Chinese versions of Triple H and The Undertaker, and vent a bit of trade tension. The $370 bln tech giant would make a burly partner; Tencent would score a PR coup, plus Trump access via co-founder Linda McMahon.
Overleveraged AT&T is a magnet for activists 26 Dec 2018 Boss Randall Stephenson has piled on over $180 bln of debt to add entertainment to the U.S. telco’s core business. It’s a risky strategy, and any missteps could make AT&T look a bit like fallen icon General Electric. Breakingviews imagines a missive from a restive shareholder.
Disruption will be the mother of M&A in 2019 26 Dec 2018 Technological change will bring creative dealmaking – think Altria’s $13 bln investment in vaping outfit Juul. U.S. companies have cash, and buying into the new economy may beat building. The risk is the advertising problem: at least half the money may be wasted.
Market adopts role of adult in the room 26 Dec 2018 U.S. stocks have fallen sharply, but in an orderly way. Fund managers and exchanges have handled heavy volume smoothly. That’s despite the unsustainable policies of the Trump administration, and clumsy efforts to instill calm. As long as those persist, prices can fall further.
Ghosts of Argentine past will come for Macri’s job 26 Dec 2018 The pro-business president has had to seek IMF help as he tries to steer Latin America’s No. 3 economy to health. That’s a gift to his discredited Peronist opponents. Recovery from drought and currency collapse may come too late to prevent the return of the spendthrifts of yore.
Wellness programs and waists spread together 24 Dec 2018 Most U.S. companies subsidize everything from fitness trackers to yoga classes for employees. Yet evidence shows these regimes do little to keep workers fit. It’s other benefits, such as curbing healthcare costs and attracting talent, that will keep the wellness craze going.
Financing drought cracks farmers’ loyalty to Trump 24 Dec 2018 The U.S. president’s trade war has evaporated export markets for soy beans and other crops, leaving growers struggling even more than before. Yet they’re mostly sticking by Trump. If he can’t strike a good deal, farmers’ faith will erode when credit dries up for the next harvest.