Samsung discovers perks of working from home 7 Apr 2020 A surge in remote working activity lifted demand for chips used in data centres. That helped first-quarter operating profit rise 3% from a year earlier and offset the pain of lower smartphone sales. The South Korean giant is benefiting from the all-pervasiveness of semiconductors.
Holding: Bad Covid-19 lawsuits can infect the good 6 Apr 2020 Calling crisis profiteers to account in court may be both justified and informative, as the 2008 financial meltdown made clear. Yet cases like a waxing parlor’s demand to stay open during the pandemic are not only absurd, they undermine the legal system. Real victims pay a price.
Videoconferences zoom toward market-boom reckoning 6 Apr 2020 The coronavirus has been a boon for companies hosting virtual meetings. That’s bringing forward the kinds of longer-term user numbers that Slack and Zoom predicted when they went public – and boosting their stock prices. But it’s not clear there’s enough profit to go around.
Orbanomics may be Hungary’s best political shield 6 Apr 2020 Covid-19 has enabled Viktor Orban to rule by decree. Busy with the virus, the EU may fail to stop abuses. But the prime minister's power grab may be limited by Hungary's economic reliance on foreign investment, which gives the like of BMW more scope to register disapproval.
3M fight exposes free trade’s underlying condition 6 Apr 2020 Globalization created wealth and helped keep prices down but wasn’t built for a pandemic where each country puts itself first. Donald Trump’s crude attempt to keep 3M’s N95 masks for Americans is dangerous but not unprecedented. What emerges after the virus should be more robust.
Europe lockdown easings are hard act to follow 6 Apr 2020 Austria hopes to reopen some shops next week, with Germany following suit from mid-April. Britain and America, with inferior testing and higher virus transmission rates, are well behind. And compared with China’s timetable, the West’s guinea pigs might still be jumping the gun.
Jamie Dimon sets virus playbook benchmark 6 Apr 2020 Covid-19 has prompted JPMorgan’s boss to pen his most useful letter to shareholders in 14 years atop the $275 bln bank. He is talking his book, especially on regulation, but Dimon has laid out what customers, investors, employees, and even voters, have a right to expect.
Rolls-Royce secures extra viral flying time 6 Apr 2020 The aero engine maker axed its 2019 dividend and borrowed an extra 4 bln pounds. That buys it time to cope with grounded planes which are costing it 50 mln pounds a week. Its key market, long-haul flights, may be the last to recover. But Rolls should have enough cash in the tank.
Dixon: Helicopter money is a toy best left alone 6 Apr 2020 Some economists say central banks should fund coronavirus containment efforts by just printing money. That would risk fuelling inflation and undermining economic discipline. There are better ways to finance emergency packages to protect people and companies during the lockdowns.
Today’s virus vices store up tomorrow’s problems 6 Apr 2020 The pandemic is encouraging people to give in to baser temptations. Porn, booze, tobacco, weed and chocolate consumption is rising. It’s perhaps understandable: Even the WHO reckons stress needs to be managed. But excesses now will only add to a bleaker and costlier future.
Corona Capital: Saudi/Carnival, PG&E 6 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Today, Saudi Arabia’s Public Investment Fund takes an 8% stake in beleaguered cruise outfit Carnival, and the coronavirus may dislodge one of the moving parts in California utility PG&E’s plan to exit bankruptcy.
HSBC retail investors pick odd time for a fight 6 Apr 2020 Thousands of Hong Kongers are rallying to act against the UK bank for halting dividends. The lender has complex ties with the Asian hub, where it makes most of its profit. The city needs more grassroots activism. But at a time of profound uncertainty, the agitation lacks class.
Three deals that can measure India’s pulling power 6 Apr 2020 Mukesh Ambani’s Reliance Industries and the Tata group want partners for businesses from oil and chemicals to consumer tech and cars. The success of stake sales by the country’s A-list will be a key measure of India’s attractiveness to foreign investors in a post-virus world.
Beijing tries to fake it ’til it makes it 6 Apr 2020 Local officials and state media are portraying a China back at work. Reassuring consumers is critical to supporting domestic demand as exports crash. But this rosy picture is blurred. Outsiders trying to model a recovery must be more discerning than ever reading the tea leaves.
Money-market funds feel stimulus ripple effect 3 Apr 2020 Some Fidelity funds turned away investors for fear that yields on the products could turn negative. It’s not the same as a dreaded breaking-the-buck moment, but is still a headache. Massive issuance of new Treasuries should help, but it’s another case of unintended consequences.
Buffett’s main asset isn’t money but patience 3 Apr 2020 The Nebraska billionaire rescued companies before - think GE and Goldman. Lower asset prices give him a chance to double down on troubled investments, or buy firms outright. But with government aid buoying values, there's little reason to move until things get really desperate.
Thruppence: A guide to Covid-19 lockdown pursuits 3 Apr 2020 Roughly half the world’s population is now subject to social restrictions because of the coronavirus. That makes weekends a new kind of challenge. In an occasional series where Breakingviews columnists give more than their usual tuppence, here’s how some are spending their time.
Starboard takes no prisoners, offers no pity 3 Apr 2020 A pandemic hasn’t stopped the activist fund from going hard on companies like eBay and GCP. Other notoriously difficult investors – Elliott, Icahn – are showing restraint. Covid-19 shouldn’t be a shield for badly run businesses, but cutthroat tactics are best used sparingly.
Payment companies will emerge as lockdown winners 3 Apr 2020 Reluctance to touch banknotes and fewer chances to spend them are speeding the shift to digital money. The $1.9 trln global industry will take a short-term hit from lower volumes. But once the pandemic eases, cash will be less relevant. The likes of Adyen and Nexi should benefit.
Virgin has bailout headwinds besides Branson 3 Apr 2020 The bearded businessman’s airline wants 500 mln pounds in UK state aid. Supplier Rolls-Royce wants it to stay aloft; arch-rival British Airways does not. Branson’s non-resident status, a big U.S. co-owner and Virgin’s shaky financial record mean the government may agree.
Amadeus ups the bar for travel-sector crisis prep 3 Apr 2020 The $20 bln Spanish IT group is raising $1.6 bln in debt and equity to bolster its balance sheet. The financial terms are fairly beneficial for Amadeus, implying that it’s not exactly desperate for cash. Still, with steep declines in air traffic it’s wise to plan for the worst.
Corona Capital: Corporate debt 3 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Despite uncertainty, investors have big appetites for investment-grade bonds.
Virus hands Elon Musk electrifying cost challenge 2 Apr 2020 Tesla’s boss has ironed out most of its production snafus and amassed enough cash for the carmaker to go almost a year without revenue before running out of juice, longer than Ford or GM. But Musk can only pull that off if he has finally mastered how to keep costs under control.
China’s wannabe fashion empire unravels 3 Apr 2020 Two years after agreeing to buy Swiss luxury brand Bally from JAB for $600 mln, Shandong Ruyi has failed to nail down financing. Its large and complex debt structure looks increasingly shaky. Even an HNA-like fire sale for the Lycra and SMCP owner will be tough in these times.
Brazen Trump oil claims may yet fire partial deal 2 Apr 2020 A day before meeting with beleaguered U.S. crude-industry execs, the American president predicted an epic supply cut by Saudi Arabia and Russia. Yet he may only need a chunk of the 10 mln barrels a day reduction he’s hoping for to keep the U.S. shale industry from total collapse.
Beware the shareholder-free shareholder meeting 2 Apr 2020 Virtual gatherings are all the rage. Covid-19 is one reason, but another is that boards get more control over the agenda. Capitalism will be poorer without awkward questions and activists dressed as cleaners. Any chance to challenge cozy directors ought to be cherished.
Meaning of U.S. jobs market data mutates 2 Apr 2020 Last week’s record-busting 6.6 mln new unemployment claims say something about the sudden impact of the Covid-19 pandemic, but not much at all about longer-term economic trends. Friday’s monthly report is already history. The hope is the rebound will also be unprecedented.
Viewsroom: Lingering lockdowns 2 Apr 2020 Breakingviews journalists around the globe check in with Editor Rob Cox to discuss Silicon Valley’s response to the coronavirus, how European regulators are forcing banks to hoard dividends, and one of the biggest corporate rescues yet of the crisis: Singapore Airlines.
Luckin spills hot bezzle over credulous investors 2 Apr 2020 Fraud expands with good times and emerges in bad. A U.S.-listed Chinese coffee-shop disruptor once worth $13 bln just said much of its revenue last year may be fictitious. In this case, it didn’t take a downturn, just auditors doing their job. Just wait until the tide goes out.
Germany is in the fast lane for an auto bailout 2 Apr 2020 EU auto manufacturers are shutting factories and furloughing workers. Current liquidity buffers can keep them going on average for around five months, assuming sales evaporate. If a virus-induced lockdown drags on, Volkswagen and Daimler could be the first to face a cash crunch.