Bank branches will be down, not out, post-pandemic 29 Jul 2020 During the Covid-19 crisis, even the last holdouts to digital banking had to throw in the towel. While that means banks like Italy’s UniCredit or Japan’s MUFG can accelerate branch closures, IT costs will limit savings as a hybrid, branch-lite future arrives sooner than expected.
The depth of Boeing’s problems is still sinking in 29 Jul 2020 The $96 bln aviation giant reported another dismal quarter as struggling airlines ordered few planes. The recovery from the 737 MAX grounding and the pandemic are also edging further into the future. The outlook for the plane maker may still be catching up with the grim reality.
Europe’s FICCy bank traders flatter to deceive 29 Jul 2020 Revenue in Barclays and Deutsche’s markets businesses rose 49% and 39% year-on-year. But declining volatility since the second quarter implies the trading boom is ebbing. Lacking U.S. rivals’ scale, the region’s investment banks will soon be a drag on group returns once more.
Corona Capital: GM, Glaxo, Shopify, Movies, Pemex 29 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: General Motors pulls further ahead; GlaxoSmithKline’s vaccine-order boost; Shopify fills its revenue basket; AMC bows to online streaming’s growing power; Mexico’s oil giant puts on a brave face.
Santander looks back in anger and forward in hope 29 Jul 2020 Impairment charges produced a $12.5 bln first-half loss at the Spanish bank. It paid far too much for UK lender Abbey National back in 2004. The Latin American expansion looks smarter. With limited pandemic damage, boss Ana Botin might close the bank’s hefty 50% discount to book.
UK’s online tax plan risks killing retail patient 29 Jul 2020 Rishi Sunak is looking to raise 2 billion pounds through an internet sales levy. If the goal is to help traditional retailers, then the chancellor should look at punitive business rates. The government, like landlords, might have to make sacrifices to keep high streets healthy.
Nomura leverages market turmoil to buy time 29 Jul 2020 Quarterly profit more than doubled to $1.4 bln, as trading volatility bolstered earnings and cost cuts bore fruit. But its retail unit is still struggling, rivals are attacking, and its turnaround plan is in its infancy. At least it can make hay while the sun doesn’t shine.
Ctrip invites funds to buy out China’s travel dip 29 Jul 2020 The $16 bln booking giant is mulling going private, Reuters reports. Ctrip has a clean balance sheet, no controlling shareholder, and premiums for delisting Chinese companies in New York have nearly halved. It’s a good target as domestic tourism revives. Funding is the trick.
Asia chip windfall preludes tech’s next challenge 29 Jul 2020 Shares of TSMC and Samsung have leapt on hopes Intel may outsource production. It could enlarge the contract-chipmaking market they dominate by 20%. Still, the $209 bln Intel's woes highlight the high costs of making advanced semiconductors. Finding buyers may get harder.
Drugs are the new bitcoin for stock hype 28 Jul 2020 Kodak shares tripled on news Uncle Sam lent it money to produce generic-medicine ingredients. The imaging firm enjoyed a similar bump after launching a cryptocurrency. That fell flat. This is closer to its roots and could be a good step. But the exuberance is likely to fade.
GM deserves more faith from shareholders than Ford 28 Jul 2020 The carmaker run by Mary Barra is holding up better in the pandemic than its Detroit rival. It’ll also zip back to profit more quickly and remains ahead on electric and autonomous cars. Yet Ford’s shares offer a smoother ride and better multiple. That doesn’t track.
Costs are the new profit this earnings season 28 Jul 2020 From 3M to McDonald’s, it’s a similar story: Sales are down but improving, profit is dismal and the future is anyone’s guess. Expense management may be more useful in seeing how companies are doing. It may be time to dust off some old financial jargon: the decremental margin.
Bezos’s D.C. delivery hangs on lawmaker wish lists 28 Jul 2020 Amazon’s CEO faces his first congressional hearing, joining peers from Apple, Google and Facebook who have sat in the hot seat before. Those grillings were mostly grandstanding by ill-prepared politicians. If they have upped their game, Bezos and Co face more of a challenge.
The Exchange: Airbnb CEO Brian Chesky 28 Jul 2020 The co-founder of the home-sharing firm compared the effects of the pandemic to a torpedo hitting a ship. He discusses how Airbnb raised $2 billion amid the crisis and how Covid-19 has changed travel. It has affected the future of his company, including its options to go public.
SoftBank rally makes case for more radical surgery 28 Jul 2020 CEO Masayoshi Son’s asset sale and share buyback plan worked: the $120 bln group’s shares doubled since March. SoftBank's conglomerate discount has narrowed, but it's still 50%. Investors might wonder why Son doesn’t go further, for example by shrinking his giant Alibaba stake.
All sides could gain from $42 bln NorNickel reset 28 Jul 2020 An agreed management shakeup would protect the role of CEO Vladimir Potanin, who holds 35% in the Russian miner, and dodge legal disruption. Rusal, with 28%, could eke out more control. Other investors would get a better-run company, and a lower risk of ecological catastrophe.
Cox: History’s most plagued city can lead the way 28 Jul 2020 Venice has benefitted more than any other place over the centuries from global trade and the movement of people. “La Serenissima” has also withstood pandemics, devoting churches as testaments to each calamity. A plan to remake its business model has merits beyond the lagoon.
Corona Capital: Baseball, Gas cloud, Luxury goods 28 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: Baseball’s Covid-19 cases put popular college sports competitions in jeopardy; a recovery in drilling for gas is bad news for the environment; Gucci and other luxury retailers finally embrace the digital revolution.
Europe bank investors can bear more dividend pain 28 Jul 2020 Hopes for payouts this year have been dashed by top supervisor Andrea Enria, who told lenders to wait until 2021. If profits hold up, investors will only suffer a delay, not a loss. Covid-19 is special, but investors can worry about creeping regulatory control of dividends.
Reckitt’s deep clean needs more elbow grease 28 Jul 2020 Frantic washing during lockdown helped the $70 bln maker of Dettol and Durex beat forecasts. The Covid-19 boost and CEO Laxman Narasimhan’s turnaround have sent the shares up 25% this year. The next part of his overhaul, including reviving the infant food unit, will be harder.
Three-pronged Brazil mobile assault can succeed 28 Jul 2020 Telecom Italia, Telefonica and America Movil have offered $3 bln to buy the wireless business of bankrupt Oi. With an established presence in Brazil, the three have an edge over a rival private equity offer. With the price already full, however, a bidding war could get costly.
Investors lead the rush back into India’s offices 28 Jul 2020 Singapore’s state funds are top investors in the IPO of Blackstone-backed Mindspace, a $2 bln real estate investment trust. Work-from-home woes will prop up property demand as developers face a liquidity squeeze. The high yields on offer are a strong pull as interest rates fall.
Ant IPO will clear Tencent’s low bar on governance 28 Jul 2020 A Hong Kong-Shanghai debut of Jack Ma’s $150 bln fintech giant could put dual class shares and Alibaba’s quirky partnership structure out of reach. Ant may even need to follow a stricter listing code than its local arch-rival. That would be a win for minority shareholders.
U.S. aid can give shot to women in the workforce 27 Jul 2020 Female employees have been hit hard in the pandemic, with a higher jobless rate and lower labor participation than men. Congress is mulling economic Band-Aids but the crisis is an opening for more ambitious plans like universal childcare. It’s a longer-term boost for growth.
Trump’s Venezuela curveball smashes more norms 27 Jul 2020 The U.S. belatedly asked a district court to reverse a decision allowing the forced sale of shares in refiner Citgo – a crown jewel among Venezuela's assets. Despite D.C.’s weak logic and wishful premise, it could muck up the case. There may be broader damage, too.
Shopify rival’s IPO belongs in discount basket 27 Jul 2020 BigCommerce has double-digit revenue growth and shrinking losses in a rapidly expanding market. Based on Shopify’s valuation, the software provider that sets up firms’ online stores could be worth $8 bln. But its small size and deep-pocketed competitors warrant caution.
Walgreens Boots CEO goes back to the future 27 Jul 2020 Stefano Pessina is to step down as boss of the $34 bln pharmacy chain and become executive chairman. He had similar roles in predecessor companies, which gave free rein to his penchant for dealmaking. And he remains Walgreens’ biggest shareholder. More M&A could be in play.
China wallets will decide winners in bling rebound 27 Jul 2020 The pandemic may shrink global sales of fancy handbags and shoes by up to 35% this year. And it will make fashion houses even more dependent on rich Middle Kingdom buyers. Owners of brands with strong local appeal, like Richemont’s Cartier or LVMH’s Louis Vuitton, stand to gain.
SAP may bank a lucky Qualtrics IPO win 27 Jul 2020 The German IT giant will float its U.S. survey business, for which it paid $8 billion in 2018. It’s an admission that all sides would be better off if the unit had more autonomy. A saving grace is the rise in tech valuations: Qualtrics may be worth more now than two years ago.
Corona Capital: Precious metals, Share sales, Toys 27 Jul 2020 Concise views on the pandemic’s corporate and financial fallout: The virus and central banks’ response to it is a rich seam for gold and silver prices; UK companies’ growing preference for bonds rather than stock is a warning sign; Hasbro and Mattel vie to see who loses less.