Donald Trump may be surprise science benefactor 31 Dec 2019 It sounds like an odd accolade for a U.S. president who once dubbed climate change a “Chinese hoax.” But a call from his administration to make federally funded research done by academics free could benefit the public good. The losers would be toll keepers like $48 bln RELX.
HR nous will make or break CEOs’ tech ambitions 31 Dec 2019 Bosses from fashion to financial services love talking about big data, machine learning and artificial intelligence. They list Alphabet and Amazon as rivals for talent. That makes for an extremely tight tech-job market, bringing creative hiring and retention skills to the fore.
Trade wars are holding cross-border M&A hostage 31 Dec 2019 Global deals exceeded $3.8 trln in 2019, but takeovers where buyer and seller are in different countries fell by a quarter. Geopolitical tensions make any big transaction a potential target. Spats between the United States, China and the EU look set to keep weighing on activity.
Sustainable investing will wind up in the dock 31 Dec 2019 Around $31 trln of assets under management now include some kind of environmental, social or governance factor. But there’s widespread confusion over definitions. That leaves the market open to egregious mis-selling and fraud. A scandal is likely sooner rather than later.
Carlos Ghosn jailbreak is all-purpose face saver 31 Dec 2019 The former car CEO has turned up in Lebanon. How he got out of house arrest in Japan is unclear but it could wind down an uncomfortable diplomatic affair. Nissan and Renault can move on. Japan’s judicial system avoids scrutiny. Ghosn swaps his cultivated martyr image for freedom.
Best of Breakingviews: What you read most in 2019 31 Dec 2019 Deals dominated the most-clicked stories for the year, while spats over everything from cars to comedy classic “Friends” made it into the top ten list. Graphics and a punk politico punched above their weight too. But an Indian tycoon and GE’s surprise whistleblower beat them all.
American election to test Wall Street’s nerves 30 Dec 2019 Whoever wins the White House in November matters more to masters of finance than 2016’s cliff-hanger if it boils down to a choice between Trump’s trade war and an assault on wealth. Breakingviews imagines a conversation among bankers at Park Avenue’s Racquet and Tennis Club.
Private credit pioneers will face a stress test 30 Dec 2019 A weak economy, high debt and falling profits should mean more corporate defaults in 2020. The pain will fall particularly on lenders specialising in private loans, who have $278 billion of assets under management. Rising losses will sort the sheep from the goats.
Wealth managers will inflate superprime bubble 30 Dec 2019 Over a decade ago loans to subprime homebuyers blew up the financial system. Now UBS and others are cranking up credit to the uber rich. Lending against unlisted stocks or art collections brings risk. It’s still safer than helping the wealthy launder money or dodge taxes.
Soccer giant will field Chinese star to kick sales 30 Dec 2019 Super-clubs like Manchester United and Real Madrid need new revenue streams as growth from the traditional pay-TV cash cow slows. In 2020, a top team will look to boost merchandise and sponsorships in a huge market by fielding a sub-par Middle Kingdom athlete.
How our 2019 predictions played out 27 Dec 2019 As Breakingviews publishes its columnists’ prognostications for next year, we look back at the previous crop. We had some bloopers – not least on GE, the ECB and Tesla. But we also hit some on the nose, from SoftBank write-downs to Argentina’s president being voted out of office.
Direct listings will move nearer IPOs – and Europe 27 Dec 2019 After Spotify and Slack’s non-standard floats in 2018 and 2019, respectively, expect more direct listings in the United States in the year ahead. The method could start borrowing more features from traditional IPOs, and the whole notion may jump across the Atlantic too.
Turkey set for good year before economic reckoning 27 Dec 2019 More fiscal and central bank stimulus will push growth towards President Tayyip Erdogan’s 5% goal for 2020. Yet inflation will be restrained thanks to lira stability. A credit binge encouraged by Ankara’s policies can last the better part of a year before screeching to a halt.
Beijing will dilute Hong Kong with Shenzhen 27 Dec 2019 Protests in the former British colony endanger China’s gateway to international markets. Past attempts to turn neighbouring Shenzhen into a rival financial hub have been half-hearted. Now Beijing has reason to press harder, especially with bold reform to capital controls.
LatAm leaders will be trapped in vicious cycle 26 Dec 2019 Protests across the region will make growth even lousier in 2020, which in turn will make people even angrier. The presidents of Chile and Ecuador are most exposed. Expect them to water down reforms in a bid to stay in office. Whether it works or not, their economies will suffer.
Team Trump will steal Warren’s tech thunder 26 Dec 2019 The Democratic presidential candidate has made breaking up Silicon Valley giants like Facebook and Amazon a key part of her campaign. But the White House could use a recent antitrust probe to make the case first, and effectively mute much of Warren’s roar.
Travis Kalanick leaves Uber with no path to profit 24 Dec 2019 The ride-hailing app’s co-founder and ex-CEO is leaving the board after being sidelined and selling most of his shares. The $53 bln firm has moved on from his tumultuous leadership. But successor Dara Khosrowshahi has yet to work out how to remove the roadblocks to making money.
It’s the suburbs, not the economy, stupid 24 Dec 2019 Most Americans like President Trump’s handling of the economy, which would normally bode well for re-election in November. But his overall approval rating is just 46%. That’ll shift the fight to healthcare and other issues, while handing moderate suburbanites a deciding voice.
SoftBank’s softly, softly approach will spur M&A 24 Dec 2019 Masayoshi Son will take a more cautious approach to backing multibillion-dollar startups next year. Those with a long path to profitability can only last so long without funds. Asia’s food delivery, ride-hailing and e-commerce stars could be first to cut their losses and merge.
Buy now, pay later faces Juul-style backlash 24 Dec 2019 Companies offering the credit innovation say it can drive online sales and help retailers deal with refunds. One player, Klarna, is valued at $5.5 bln. But making it a lot easier to shop for free could prompt a reaction like that which befell the vaping heavyweight.
China will get sideswiped by American ESG fervour 24 Dec 2019 There’s talk of delisting People’s Republic stocks from U.S. bourses and a proposal to block public pension funds from buying them. Concerns about human rights, audits and price swings are also being amplified. That feeds into the social-impact hype and will spark capital flight.
Tokyo brings home the Olympic gold in 2020 24 Dec 2019 Cities are often saddled with debt from hosting the games, and mismanagement has stretched from Montreal to Rio. Japan is setting new positive standards in sponsorship and sustainability, making medals from used phones. Add on short-term stimulus, and it can top the host podium.
E-betting boss opens all his presents in one go 23 Dec 2019 DraftKings CEO Jason Robins is raising cash, buying a company and going public by merging with a SPAC. It could be a smart bet on U.S. online gambling growth. But investors’ willingness to hand him supervoting rights shows they’ve learned little from the WeWork and Uber debacles.
Tesco Christmas furore flags limits of ESG crusade 23 Dec 2019 The UK grocer may have sold greeting cards made by prisoners in China. The scandal shows how even firms that appear to embrace their environmental, social and governance duties struggle with forced labour. Stock prices suggest there’s not much pressure from investors for change.
Boeing CEO ejection brings stability, temporarily 23 Dec 2019 The aviation giant’s decision to put chairman David Calhoun in the pilot’s seat offers a chance to reset strained regulator and customer relations. But the former GE exec’s appointment may also indicate Boeing’s engineering and cultural problems are more severe than expected.
Gaming’s strongest opponent will be regulation 23 Dec 2019 New Microsoft and Sony consoles come out in 2020. Apple and Google want to be the Netflix of online play, and game makers like Activision Blizzard, Epic and EA hold a strong hand. But tighter scrutiny of gambling-style digital prizes will temper the $130 bln industry’s growth.
BlackRock is Wall Street’s object of fantasy M&A 23 Dec 2019 Investment banks are paid to be creative by concocting deals that help clients meet their strategic imperatives. But financiers like Goldman Sachs and Blackstone, too, could use some of their own advice. The $76 bln investment behemoth might one day play into their pitchbooks.
Credit Suisse spy scandal calls for CEO bonus cut 23 Dec 2019 Swiss regulators are probing the lender’s surveillance of two senior executives. The fiasco undermines the $33 bln bank’s internal controls, and may deter clients and dealmakers. While he hasn’t been directly blamed, boss Tidjane Thiam owes investors a gesture of solidarity.
Peak subscription economy approaches in 2020 23 Dec 2019 It’s not just streaming services from Disney and Apple that are competing for steadily paying subscribers. Online banks, wine sellers and even furniture retailers want them, too. Buyers can only spend and consume so much, though. For many vendors, the summit will be beyond reach.
India Insight: Onion prices add to nation’s tears 23 Dec 2019 Amid violent protests over a citizenship law, Indians are also having to deal with poor harvests for this staple of the curry dish. It’s a glimpse into how changing climate patterns will exacerbate inefficiencies and create more of the volatility famous for toppling governments.