Mr. Whatever It Takes is Italy’s post-corona card 2 Apr 2020 As ECB chief, Mario Draghi saved the euro in 2012 with monetary policy magic and prevented an Italian default. As Italy crumbles under the cost of a spiralling epidemic, his name has emerged as either the next premier or president. But he shouldn’t rush into either job just yet.
Big Oil might be a weird stock market haven 2 Apr 2020 Shares in the world’s big five listed crude producers are down by over a third since January. Yet despite the global oil slump, their dividends look secure for now. Rock-bottom prices would have to last well into 2021 for credit ratings or payouts to be in serious doubt.
U.S. regulators didn’t have to meddle with Altria 2 Apr 2020 The FTC is suing the Marlboro maker to undo its 35% stake in Juul claiming it eliminated competition. The $12.8 bln investment has been a disaster for Altria and highlights one of many problems from buying disruptors. The market can beat watchdogs to the punch.
Chancellor: What happens when globalisation fails? 2 Apr 2020 Covid-19 could prove fatal to a global trading system already under attack by Trump. History suggests that industrial production will be localised, labour’s share of wealth will rise and the decades-long bond bull market will likely come to an end. China is already a step ahead.
Corona Capital: Uncle Sam’s penchant for boutiques 2 Apr 2020 Concise views on the pandemic’s corporate and financial fallout. The U.S. government has given a boost to independent investment banks by hiring Moelis. Perella Weinberg and PJT are its bailout advisers. Megabanks like JPMorgan and Goldman Sachs, meanwhile, are left on the shelf.
Buyout barons may trip up during their big moment 2 Apr 2020 The market crash has created opportunities for private equity bosses, who are sitting on $832 billion of dry powder. But debt, crucial for the model, looks harder to come by. And with institutional investors under pressure, funds may not be able to tap all the cash they need.
Insurers are next in line for virus dividend chop 2 Apr 2020 Regulators told the likes of Allianz and Aviva to think twice about giving cash to shareholders. Most payouts look safe even after steep market falls. Yet bond downgrades loom, and pressure to help the economy will sap profitability. Unlike banks, cuts may not fall evenly.
Seoul’s virus tests yield false economic positive 2 Apr 2020 Laudable containment efforts that helped save lives aren’t sparking obvious wider benefits. Domestic demand is weak and a global recession probably will cause South Korea’s $1.6 trln economy to contract this year. Export dependence means waiting for the rest of the world to heal.
Beijing helps gas guzzlers at clean cars’ expense 2 Apr 2020 The government might ease electric vehicle production quotas and delay raising emissions standards. It will ease some pressure on battered conventional auto giants, which generate jobs for millions. But it’s more bad news for struggling new energy startups like Nio.
China’s missing phone customers stir viral concern 2 Apr 2020 Some 20 mln of them mysteriously vanished from $150 bln China Mobile and its two biggest rivals in February. It may be the first time all three carriers lost subscribers at once. Theories range from the conspiratorial to the more plausible. None of them is reassuring, though.
Airlines face overdue dilemma taking Treasury cash 1 Apr 2020 U.S. bailout funds come with strings attached, like handing the feds stock. Taking the money means keeping more employees, but diluting shareholders. For arch-capitalists, that's objectionable. For society at large – and to ensure readiness for a recovery – it's only fair.
New York’s fiscal house has a solid foundation 1 Apr 2020 The U.S. crisis epicenter began a new accounting year on April 1 and could face a $15 bln revenue drop. It will need federal aid. But unlike Illinois and New Jersey, years of sound budgets have given it more cushion to weather the storm. Irresponsible states won’t fare as well.
Bond market throws Carnival a costly lifeline 1 Apr 2020 The virus-stricken cruise operator is finalising a $4 bln bond issue, secured against its ships, at an eye-watering 12% yield. That reflects fears the industry may be permanently submerged. Still, it shows that even the most troubled companies still have access to emergency cash.
U.S. has a handicap vs. Europe in this recession 1 Apr 2020 It’s easier to fire workers in America and welfare is less generous than across the Atlantic. That’s unhelpful for bouncing back from a virus-induced crash. Consumers will be less scarred in countries where businesses retain workers and social safety nets are strongest.
Cox: What will change after coronavirus passes? 1 Apr 2020 Much depends on the pandemic’s ultimate human cost and the duration of lockdowns. Early indicators point to stronger social safety nets, fatter corporate balance sheets, less travel, the demise of cash, warped social interactions and better hygiene. And that’s just the start.
Corona Capital: GE, Oaktree, M&A back doors 1 Apr 2020 Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.
BoE leaves bank traders’ virus paydays in limbo 1 Apr 2020 The Bank of England expects Barclays, HSBC and Standard Chartered to show restraint on future payouts. It’s ambiguous, but enough to worry bankers who profited handsomely from market moves in March. Unless the pandemic ends quickly, big bonuses will be hard to justify next year.
Meal couriers can gain by cutting the grocery line 1 Apr 2020 The likes of Uber Eats and Deliveroo may suffer from lockdown-induced restaurant closures. Meanwhile, grocery giants are struggling to deliver all the tinned goods and pasta that punters desire. That’s a recipe for cooperation, and perhaps profits for the cash-starved sector.
M&A protectionists get even stronger cover 1 Apr 2020 All foreign takeover bids will now be subject to review in Australia, shielding local companies from a recovering China and beyond. As anti-globalisation rises, other countries might retrench similarly. That could make it harder for the capital-hungry and encourage oligopolies.