Huawei’s home safety net looks less sturdy 1 Apr 2020 Earnings at the telecoms equipment giant hit $9 bln in 2019, although growth slowed as U.S. curbs whacked overseas handset sales. That has forced a refocus on China. Unfortunately local carriers are spending less than hoped on 5G, and smartphone rivals like Xiaomi look tough.
Australia fuels global race to flatten jobs curve 1 Apr 2020 Prime Minister Scott Morrison proposes spending some $80 bln subsidising wages for six months. That would cover about 70% of median pay for most and equal 6.5% of GDP. Increasingly generous pandemic stimulus measures in one country ultimately could help workers in another.
U.S. bailout boasts dollars but not staff 31 Mar 2020 The Treasury has about two dozen senior leaders to funnel $2.2 trln in aid, while key positions are vacant. Goldman Sachs, which provided government recruits in the 2008 financial crisis, has about 410 partners overseeing $1.9 trln in assets. Bankers may fill the gap again.
It’s time for hedge funds to put up or shut up 31 Mar 2020 Some big-time money managers are now looking to raise cash to take advantage of volatility’s epic return. The asset class hasn’t impressed over the past decade. So this could be many firms’ last opportunity to show they’re worth their high fees. But they may have to act fast.
The Exchange: Verizon’s HR chief 31 Mar 2020 Christy Pambianchi oversees the well-being of more than 100,000 people. She explains how Verizon quickly rewrote the rule book to address the coronavirus outbreak from getting people set up at home to ensuring the safety of field employees providing critical infrastructure.
Hadas: The world needs to declare bankruptcy 31 Mar 2020 Debts have been out of alignment with the real economy for years. The coronavirus shutdown will magnify the imbalance. Finance has become an economic burden. A Chapter 11-style restructuring of the global balance sheet is the cure, but that’s too much for today’s politicians.
Global central bank stimulus presages gold surge 31 Mar 2020 Worldwide central banks have maxed out monetary stimulus. That makes all safe havens less safe except one. Gold’s growing supply scarcity and rising production costs make it solider than bitcoin, real estate or stocks. The 19th century asset is having a renaissance in the 21st.
Shadow lenders may get their day in the sun 31 Mar 2020 Private debt providers have more than doubled their assets since 2010 to over $800 bln. They also have over $270 bln in dry powder. Newer lenders may struggle as defaults mount. But this will create even more bargains for the winners. The Covid-19 crisis is their moment to shine.
Vivendi buyback is a high-stakes gamble 31 Mar 2020 The French media group has completed the sale of a stake in Universal Music for around $3.3 bln. That cheered up investors who had been worried the coronavirus might scupper the deal. Still, announcing new share purchases looks unwise given the company’s large debt pile.
Pre-virus era rule book will lead investors astray 31 Mar 2020 The market rout means Norway’s wealth fund and other money managers are less exposed to stocks than their ideal purely because shares fell so much relative to bonds. Rectifying the imbalance would unleash equity buying of $500 bln or more. But a return to old norms will be risky.
Corona Capital: Rich vs. poor, Carnival 31 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: The rich may save even more while the coronavirus rages while the poor will be further squeezed, and Carnival tries to bail out its sinking cruise business with a big sale of equity and debt.
Couchbound M&A bankers have a few straws to clutch 31 Mar 2020 The value of global deals fell 28% in the first quarter to $698 bln. Defensive all-stock mergers and distressed sales offer some hope for M&A bankers, who are also learning to schmooze from home rather than in person. Yet hopes of a quick snapback look forlorn.
Hedge funds’ German M&A pleasure flips to pain 31 Mar 2020 Covid-19 has turned the tables on speculators buzzing round AMS’ 4.6 bln euro takeover of Munich-based Osram. The Austrian group may struggle to buy out minority investors. That leaves funds using a well-worn legal loophole to squeeze out a premium facing hefty losses instead.
Green investing loses star player at bad time 31 Mar 2020 Hiro Mizuno is leaving Japan’s $1.5 trln pension fund. The chief investment officer led the way in focusing more on environmental, social and governance factors. Asset management can ill afford the exit of such a figurehead just as Covid-19 pushes these issues to the backburner.
Turkish canal is bad way to fix infrastructure gap 31 Mar 2020 President Tayyip Erdogan is building a $12 bln waterway in Istanbul. The stated aim of stopping ships from crashing into the Bosphorus fails to make up for the risk of environmental catastrophe. There’s no promise of new revenues either. The only winners will be land speculators.
Meituan Dianping delivers extra side of ESG 31 Mar 2020 The $58 bln Chinese takeaways-to-taxis company expects a rough first quarter after Covid-19 closed eateries and curbed travel. With the outlook hazy, Meituan instead directed investors to the aid it’s providing customers. The initiatives may be useful in a fight against Alibaba.
Hong Kong rues taking off its face mask 31 Mar 2020 A fresh wave of Covid-19 infections has forced the Asian hub into a crushing second phase of lockdown. It illustrates the challenges of getting back to business as usual, especially for more outward-facing economies. Breakingviews looks at life in a city beating a fresh retreat.
U.S. aid excludes startups, entrenches Big Tech 30 Mar 2020 Many Silicon Valley firms will miss out on $350 bln in new small business loans. In some cases, entities with the same venture capital investor are lumped together, pushing them above the 500-employee limit. Big players like Google can further entrench themselves.
Racial wealth gap weakens U.S. virus defenses 30 Mar 2020 Pandemics don’t discriminate over whom they infect, but the coronavirus will wreak its worst havoc on black Americans, who are overrepresented in the hardest-hit parts of society. The U.S. racial prosperity gap hasn’t narrowed in 50 years. Covid-19 is likely to drive it wider.
Private equity healthcare bets go from ill to ICU 30 Mar 2020 KKR and Blackstone gambled big on rising medical expenditures, buying emergency room staffing firms Envision and TeamHealth. Wars with insurers over aggressive billing practices left both companies weak. Cancelled procedures from Covid-19 will put both in critical condition.
Fed’s virus response delivers its everyman moment 30 Mar 2020 The U.S. central bank was criticized for its 2008 financial crisis response that aided Wall Street. The current health emergency is spurring the Fed to help Main Street through small business loans. The move helps counter its elitist image and bolsters its political clout.
Global dividend drought could rival 2009 30 Mar 2020 Companies like Ford, H&M and UniCredit have cancelled payouts. Government curbs and the need to conserve cash mean more will follow. Distributions had more than doubled since the last crisis-induced drop. Pension funds and other income investors will feel the lack of cash flow.
Rosneft Venezuela exit is not as good as it looks 30 Mar 2020 The $41 bln oil giant is selling its operations in the country to the Russian state to avoid more sanctions. Moscow is making a generous share payment but in practice keeps voting control. It’s a cheap way for the government to protect a key asset and send a message to the U.S.
EU bank dividend pause could add $300 bln to loans 30 Mar 2020 Lenders like UniCredit and ING will follow regulators’ advice and halt payouts. That could add $30 bln to euro zone bank capital, supporting 10 times that sum in lending to virus-hit firms. Those who stick with their dividends, like UBS, will regret it if the crisis persists.
Dixon: Here’s how to stop humungous fiscal costs 30 Mar 2020 Governments will rack up eye-popping bills to fight coronavirus if they’re not careful. The key will be to avoid debilitating stop-go strategies, where economies come out of lockdowns only to go in again. But that will only happen if exit strategies are well planned, not rushed.
Corona Capital: Banking bonuses, Local TV M&A 30 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: BBVA’s ditched bonuses pressure peers; local TV deal has more than one struggle.
Ritz sale suggests some assets are virus-proof 30 Mar 2020 The high-end London hotel has been sold to an undisclosed Qatari investor for 800 million pounds. While that may not be enough for some members of the feuding family of sellers, it’s what it might have fetched pre-coronavirus. London property remains a safe haven of sorts.
Strong dollar hits renewables when they’re down 30 Mar 2020 Plunging oil prices have already made wind and solar power less attractive. But a coronavirus-led weakening of emerging market currencies also pushes up the dollar cost of new projects. That puts a brake on growth just when the opposite is needed to hit carbon reduction targets.
Beijing hands Wall Street rusty keys to kingdom 30 Mar 2020 After tortuous journeys, Goldman Sachs and Morgan Stanley finally joined JPMorgan with approvals to take majority stakes in their Chinese JVs. It’s a token concession at a precarious time after locals have spent a decade getting stronger. Patience, however, could yet pay off.
Japanese investors stick to curious old ways 30 Mar 2020 Despite signs of displeasure with Kirin’s strategy, shareholders rejected proposals to change it. Toshiba Machine’s approved anti-takeover measures while Teikoku Sen-i’s spurned higher payouts. There are glimmers of progress in the votes, but they are self-defeating all the same.