Steve Mnuchin cries wolf on U.S. markets 24 Dec 2018 The U.S. Treasury secretary used financial-meltdown language to address pedestrian issues of falling stocks, a government shutdown and the president’s Fed-bashing. At worst the alarmism could create a crisis; at best it undermines his credibility when a real threat appears.
Euronext gives Oslo bourse surprise Christmas gift 24 Dec 2018 The pan-European group is ready to pay 625 mln euros for the Norwegian exchange. The festive offer already has the support of nearly 50 pct of investors. In the consolidating world of electronic trading, it’s getting harder to play alone. Accepting the holiday hamper makes sense.
Japan is stealth threat to 2019 market stability 24 Dec 2018 Governor Haruhiko Kuroda’s tiny tweaks to ultra-loose policy will agitate global asset prices more than the actions of his U.S. or euro zone peers. Higher domestic yields are set to lure Japanese money back from U.S. credit or European debt markets and the yen will be buoyant.
World will improve where it matters most in 2019 24 Dec 2018 By next December, more people will have electricity and clean water. Child deaths are likely to be rarer and education more common. In future years, the pace of gains could accelerate. The open question is whether progress will undermine prosperity by also bringing more conflict.
Crypto could bring Facebook some stability 21 Dec 2018 The social network may issue a dollar-pegged digital currency to let its 1.5 bln WhatsApp users transfer money. So-called stablecoins embody much of bitcoin’s original promise and have grown popular as other crypto assets tanked. Beleaguered Facebook would welcome a similar effect.
M&A shops try jumping on activism’s new coattails 21 Dec 2018 Moelis and PJT are the latest to ramp up shareholder advisory efforts. The rising influence of passive funds mixed with deeper-pocketed investors targeting bigger firms means Corporate America needs more help. Offering defensive advice now can bag lucrative fees down the road.
Jeff Bezos starts to resemble Sam Walton 21 Dec 2018 Amazon is selling shelf space, opening stores and launching catalogs. Old-school Walmart’s acquisitions of Jet.com and Flipkart are helping it challenge its rival’s online dominance. As the two retailers increasingly resemble each other, so too will their valuations.
Cevian, Nordea dangle truce in bank activism feud 21 Dec 2018 Lenders and shareholder activists rarely gel. But the Nordic bank welcomed the Swedish fund’s 2.3 pct stake. Cevian’s proposals for cost cuts are less radical than, say, a breakup, but could push Nordea’s return on equity to 14 pct. Its surplus capital could be a sweetener.
Spain policy paralysis sets up dangerous dynamic 21 Dec 2018 Rising support for anti-immigrant Vox makes life harder for Socialist Prime Minister Pedro Sanchez, who was already struggling to pass a budget. That’s bad news for the labour market. Growth is slowing and politicians are unable to enact reforms that might help the unemployed.
Italian banks to bear populism’s burden next year 21 Dec 2018 Despite being stronger, lenders face another choppy ride in 2019. A strong League showing in the EU parliament will embolden leader Matteo Salvini to seek fresh elections, rekindling Quitaly risk. Breakingviews imagines a WhatsApp chat between a U.S. investor and Italian dealer.
German takeaway truce delivers tasty value treat 21 Dec 2018 Delivery Hero is selling its German business to rival Takeaway.com for 930 mln euros. As with Uber's capitulation to Didi in China's car-share wars, it means an end to cutthroat competition in another gig-economy market - and relief for both companies' investors.
Cox: France’s Macron can’t turn 41 fast enough 21 Dec 2018 The tail end of the president’s 40th year proved more eventful than he bargained for. The “gilets jaunes” caught him unawares and hardened the perception of him as an aloof dauphin. Business is still hopeful, but Macron needs more than rich Parisians’ backing to reform France.
Mattis exit leaves world facing Trump unchained 21 Dec 2018 The U.S. defense secretary is resigning, citing differences with the president over support for allies and his attitude toward China and Russia. Trusted by friends and foes, the ex-general also curbed Trump’s impulses. More military risk is the last thing rattled investors need.
Asia’s beauty giants will apply a Western gloss 21 Dec 2018 J&J, Unilever and others have splashed out on cutting-edge cosmetics in Japan and South Korea. They want innovation, plus clout in China. Yet locals like Shiseido and snail mask supremo Amorepacific have cash and room to grow outside the region. They can reverse the M&A trend.
Sony’s turnaround will be an activist casting call 21 Dec 2018 Boss Kenichiro Yoshida has boosted earnings at the $61 bln movies-to-video-games group. But he needs to shed a loss-making handset unit and spin off the chip business, among other things. The Japanese company's reluctance to act will see hedge funds make a cameo in Sony's remake.
Viewsroom: Dealing in high anxiety 20 Dec 2018 Equity valuations are in the stratosphere and geopolitical risk is running hot. Breakingviews columnists predict how that’ll affect markets in 2019, from trade-war fallout to Indian privatizations, a Deutsche Bank rally and mining M&A. They also assess last year’s prognostications.
Doomsday just another opportunity to create alpha 20 Dec 2018 From grid hacking to financial meltdown, new fears about a systemic disaster are generating ideas about fortifying for the worst. Demand for gym memberships, canned soup, and gold will all rise. Here’s how to indulge in the nervousness.
U.S. cyber allegations risk bigger rift with China 20 Dec 2018 The United States indicted Chinese hackers while its allies condemned cyber thefts. The moves, like the recent detention of Huawei’s CFO, are ostensibly separate from trade talks, but Beijing won’t see it that way. The Trump administration may have to choose its priority target.
Drones prove disruptive capacity – in a bad way 20 Dec 2018 Rogue devices forced London's Gatwick airport to close, grounding flights and stranding thousands of passengers the week before Christmas. Even known risks with new technology - already highlighted by UK aviation authorities - can be hard to manage.
Altria’s $12.8 bln vaping punt tastes funky 20 Dec 2018 The Marlboro maker is paying a whopping multiple for 35 pct of Juul Labs - and cutting jobs and up to $600 mln of expenses just to cover interest costs. Meanwhile Juul is handing much of the cash to current owners and staff. It’s a risky bet that rapid growth won’t start to drag.
U.S. Oleg Deripaska deal tougher than it looks 20 Dec 2018 Washington’s decision to lift sanctions on En+ and allow the Russian oligarch to keep a 45 pct stake sounds lenient. Yet it looks difficult for Deripaska to sell his stake for cash or exercise decisive influence. After a messy beginning, the U.S. raid seems a qualified success.
Facebook headed for Big Tobacco-style backlash 20 Dec 2018 A number of U.S. states may follow the District of Columbia in suing the $380 bln social network for misusing customer data. It’d be reminiscent of the 1990s fight against cigarette makers. A similar outcome would leave Facebook paying huge fines and bound by tighter rules.
Rio will turn big miners back into big spenders 20 Dec 2018 Despite fat cash piles, mining groups have been slow to acquire. With new projects costly and demand high, copper was already a good strategic bet even before trade war jitters caused a price slump in 2018. Expect Rio Tinto to come calling for $15 bln U.S. rival Freeport.
EU Brexit safety net still means trauma for London 20 Dec 2018 The bloc will allow banks to use UK clearing houses for a year, the minimum to spare $60 trln of swaps being cancelled if Britain can’t agree an exit deal. The temporary waiver also gives Europe a negotiating tool, and forces banks to shift business and staff across the Channel.
Shared bike wipeout indicts China’s startup model 20 Dec 2018 Ofo is struggling to refund millions of rider deposits, media report. The $2 bln firm, led by a young, stubborn founder, rushed for market share regardless of cost, enabled by indulgent backers like Alibaba. China's wasteful tech spending may be overdue a big bankruptcy.
East Africa will buck global great rift trend 20 Dec 2018 Twenty-five years after genocide, Rwanda’s economy is motoring sufficiently to need new markets. The potential inclusion of Ethiopia would make East Africa a single market of 250 million people. If it prospers, it would provide a useful counterpoint to global balkanisation.
Japan Post’s Aflac stake is M&A ugly duckling 20 Dec 2018 The state-owned postal group will buy 7 pct of $34 bln U.S. insurer Aflac. It will get no direct say in the business, though, no board seat, and only limited voting rights. The dubious idea that minority stakes buy commitment to mutual gain, common in Asia, has reached its limit.
Byju’s educates startups in better business 20 Dec 2018 After raising fresh funds for overseas expansion, the Indian learning app is valued at $3.8 bln and growing fast despite pricey subscriptions. Success feeds off proud parents and lousy schools. On the verge of profit, Byju’s is a reminder that unicorns can grow without subsidies.
Hong Kong’s IPO crown rests on rickety market 20 Dec 2018 The financial centre's $32 bln haul of new listings this year puts it in the global lead. Yet 72 pct of debutantes are trading below their offer prices, and overall trading is thin. Too few long-term investors and a crowded but illiquid market are to blame. Both are hard to fix.
China can afford some pipe dreams in 2019 20 Dec 2018 After years of speculation, Beijing will finally push behemoths like $200 bln PetroChina to spin off their pipelines next year. Allowing those oil and gas networks to run independently opens the field up to smaller competitors. It’s a major step towards energy market reform.