Exchange-traded funds will keep gold glittering 21 Jun 2019 The yellow metal’s price has broken $1,400 an ounce and touched highs last seen in 2013, thanks to scope for lower U.S. interest rates and Gulf tensions. Yet holdings in the largest gold-backed ETFs are only just joining the rally. That should mean bullion keeps its shine.
Big Tech warrants Bank of England’s open eyes 21 Jun 2019 The central bank may let technology firms deposit funds alongside regular lenders as Governor Mark Carney seeks to keep up with rapid shifts in finance. Lower costs and more competition are broadly positive. Large groups like Facebook, however, deserve a more cautious embrace.
KKR’s $3 bln rail float helps to clear IPO line 21 Jun 2019 UK website Trainline priced near the top of its range and popped 20% after listing in London. Its rapid growth and positive cash flow make an alluring combo, but investors also looked past risks including shifting UK rail policy. That bodes well for fellow IPO travellers.
Deutsche Bahn faces Corbyn haircut on UK rail exit 21 Jun 2019 The German train group is selling its Arriva unit for a mooted 3.5 bln euros. Its British buses and European networks justify the price, suggesting the UK rail franchise comes for free. It’s a fair call given opposition leader Jeremy Corbyn wants to end private ownership.
Evergrande can ill-afford an electric-car fantasy 21 Jun 2019 The property giant has already put over $4 bln into green vehicle brands and dealers. Now it plans to plough ten times that into research and factories; for the same money boss Hui Ka Yan could buy Tesla. But he’s no Elon Musk, and this could derail a debt clean-up.
China’s bank turmoil locks in moral hazard 21 Jun 2019 Beijing’s takeover of troubled lender Baoshang has revealed surprising bank fragility. Short-term lending rates climbed in reaction, prompting regulators to inject liquidity and walk back threats of a haircut. The episode undermines hopes for ending government guarantees.
Buybacks prolong Wall Street rally nobody loves 20 Jun 2019 U.S. stocks are near record highs – thanks in part to purchases by their issuers. Investors are pulling out of equities and fund managers report extreme bearishness amidst a weakening global economy. Hopes of Fed rate cuts are a fragile support when it’s the only game in town.
Viewsroom: UBS gets lost in translation 20 Jun 2019 A star economist at the Swiss bank sparked outrage on Chinese social media after his remarks about the country’s pigs were misconstrued. UBS’s decision to put him on leave seems overdone. And: Those weighing the benefit of a Facebook cryptocurrency must ask if “In Zuck we trust.”
Slack debut takes direct listing closer to a trend 20 Jun 2019 The work-messaging service’s early trades gave it a valuation of some $24 bln. That’s more than three times its worth a year ago. Like Spotify before it, Slack’s decision to opt out of a full-blown IPO paid off. Airbnb could be the one to make direct listing almost mainstream.
Big Tech risks crowding out other antitrust ills 20 Jun 2019 Google, Amazon and others deserve the scrutiny they’re getting from U.S. officials, but that leaves less room to probe concentration in other areas. Take a rash of mergers between hospitals, for example. Silicon Valley isn’t the only industry in need of a regulatory colonoscopy.
Debt debacle throws Natixis’ strategy off course 20 Jun 2019 The French lender’s shares fell 12% after Morningstar dropped ratings on one of its funds due to hard-to-trade bonds. That overstates the likely loss of earnings. The risk is that client withdrawals hurt CEO François Riahi’s plan to grow in areas other than traditional banking.
UK $2.4 bln car-sale LBO has a quiet engine rattle 20 Jun 2019 Private equity firm TDR may buy used-car auctioneer BCA. Its experience in the sector may give it an edge over Apax, which walked away from the group last year, and returns look decent if Europeans sell more motors online. The longer-term risk is that fewer punters own cars.
Rocket’s lower orbit still requires turbo-boosters 20 Jun 2019 Oliver Samwer, who runs the 3.6 bln euro internet investor, has belatedly realised venture funds don’t belong in public markets, Manager Magazin says. Buying back most shares to de-list Rocket makes sense. Yet minority investors deserve a fat premium for sticking by the founder.
CEO protest vote would create a new Nomura problem 20 Jun 2019 Adviser ISS wants shareholders to punish Koji Nagai at an upcoming annual meeting. He has presided over the bank’s first full-year loss in a decade and an embarrassing leak, and has not fixed bigger strategic issues. The trouble will be finding a replacement better able to do so.
UK tax havens’ new look has old problem 20 Jun 2019 Jersey, Guernsey and the Isle of Man will consider publishing the real owners of companies registered there by 2023 – in line with the European Union. Great. Yet illicit money will linger in the tax havens if any new system is policed as poorly as in Britain.
Cox: Not all Italians dislike the French, just 33% 21 Jun 2019 The feeling is not reciprocal. In the same Ipsos poll, only 6% of French respondents felt the same way about Italy. Given cultural and economic similarities, the two nations should arguably have the strongest bonds. Lopsided investment flows are one part of the problem.
CLSA exodus leaves owner Citic with an empty shell 20 Jun 2019 The brokerage's star analysts are being poached by rivals like Credit Suisse and Jefferies. They take with them much of the brand value China's Citic Securities paid $1.3 bln for in 2013. Such mergers are always tough. But the state-owned group missed opportunities to do better.
Potash makes better sense for BHP than shale 20 Jun 2019 The miner is weighing whether to press ahead with a $20 bln Canadian project, its most significant investment in years. BHP shareholders, scarred from past blunders, are understandably wary. There may be a case, though, that potash will be more like iron ore than fracked oil.
Fed gives data one more chance 19 Jun 2019 The U.S. central bank held rates steady, though no longer says it’s patient. Policy setters are up against weaker global growth, trade worries, more dovish signals from Europe and Japan, market hopes of rate cuts and Donald Trump’s brickbats. The tension may last only six weeks.
Apple’s march from China is long and inevitable 19 Jun 2019 The idea of the iPhone maker shifting 30% of production elsewhere may concentrate minds as the U.S. and China square up in trade talks. Such a move would take years. Detroit and London show economic clusters rarely implode. But they can erode, and the process is hard to stop.
Vision Fund may be Hotel California for investors 19 Jun 2019 SoftBank’s $100 bln vehicle is almost spent, and CEO Masayoshi Son’s Gulf sponsors are mulling whether to back a sequel. High returns help; toppy valuations don’t. The problem is that tightening Saudi and Emirati purse strings may dent confidence in current cash-burning startups.
Second front opens in Vivendi’s Italian campaign 19 Jun 2019 Silvio Berlusconi’s plan to create a 4 bln euro pan-EU broadcaster from Mediaset could mute the influence of its French media rival in the new group. Vincent Bolloré’s firm, which may also be diluted by Rome in Telecom Italia, is getting a taste of its own cooking in Italy.
Gender pay gap deserves GAAP accounting 19 Jun 2019 Alphabet is the latest to oppose a shareholder call for it to report the difference between median male and female pay. Many companies publish data by job categories to deny sexism, but that sidesteps a lack of women at the top. Fuller numbers would help get at the real problem.
Schwarzman’s Oxford gift widens UK university gulf 19 Jun 2019 The Blackstone founder is giving 150 mln pounds to the 900-year-old institution for a humanities centre bearing his name. Oxford and other top universities already outspend less prestigious peers. Weaker players will have to borrow more to keep up, increasing their vulnerability.
Acacia and Barrick pay price for Newmont escapade 19 Jun 2019 Barrick CEO Mark Bristow won’t sweeten his offer to minority investors of the Tanzanian gold miner. A small raise could defuse the damaging stalemate. But after an expensive and failed tilt at Newmont, Bristow is under pressure to be seen to defend his shareholders’ interests.
Nordic banks’ soft regulators invite U.S. wrath 19 Jun 2019 Shares in Danske and Swedbank have fallen sharply due to concerns about American probes into money laundering. A $900 million fine by Dutch regulators helped ING escape U.S. ire for similar breaches. Laws limiting penalties in Scandinavia mean banks there may not be so lucky.
Mario Draghi will leave one big task undone 19 Jun 2019 The ECB’s annual Portugal shindig is this year as much a celebration of its outgoing boss as a deep dive into the euro’s first 20 years. The Italian bequeaths his as-yet-unnamed successor the unfinished job of boosting low inflation. That will be hard unless fiscal policy helps.
Hadas: Hong Kong teaches lessons on taming China 19 Jun 2019 The Asian financial hub is a special case, but its mass protests make clear that single-minded resolve can push back against an increasingly prosperous and autocratic People’s Republic. Similar focus would help foreign businesses and governments. Donald Trump is mostly failing.
Gloating over Hong Kong distracts Taipei 19 Jun 2019 President Tsai Ing-wen made an unlikely political comeback largely thanks to unrest in the financial centre that rallied anti-Beijing sentiment. But the island’s citizens are unlikely to glean any economic benefit from Hong Kong’s pain. Tsai’s reform to-do list remains too long.
Ontario gives succor to Hudson’s Bay activist 18 Jun 2019 The Canadian province’s pension plan has ended a deal to sell shares to the retailer’s chairman at the same price he is now bidding for the whole company. That suggests common ground with investor Jonathan Litt, who says the buyers can pay more than the $1.3 bln offered so far.