Corona Capital: TikTok, India’s GDP 31 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: Video app Triller says it has offered $20 bln for parts of its much larger rival, but the bid makes no sense; India’s virus-hit economy is probably hurting more than the latest figures suggest.
Distressed debt cash flood could sink returns 31 Aug 2020 Investors are pouring billions into funds that take advantage of credit carnage. Brookfield's Oaktree unit just raised a whopping $12 bln. But assets chasing these bets have ballooned since 2008, and stimulus limits the opportunities. Many managers may fall short of expectations.
AT&T could turn DirecTV sale into a two-parter 31 Aug 2020 The U.S. telecom may ditch its shrinking satellite pay-TV unit. The most logical outcome is a merger with rival Dish, but AT&T boss John Stankey already has his hands full without taking on a new antitrust battle. A sale to private equity could be a smart way to bridge the gap.
Nestlé’s $2.6 bln peanut hedge boosts health creds 31 Aug 2020 The $348 bln Swiss giant is buying allergy treatment firm Aimmune. It makes the first approved product for food allergies to the nut. The ingredient isn’t prominent in its portfolio, so CEO Mark Schneider will essentially get a lift from making rivals’ products more accessible.
Buffett’s cheap yen buys Japanese doppelgangers 31 Aug 2020 Berkshire Hathaway invested in Japan’s five big trading houses, an atypical move exploiting the country’s cheap borrowing costs to buy stakes in discounted, unloved conglomerates. The thesis is clever, if narcissistic. But it could lock Berkshire in Japan’s infamous value trap.
Veolia’s trash dominance drive is worth the money 31 Aug 2020 The French water-and-waste group is at last pouncing on rival Suez. The 15.50 euros a share cash bid for Engie’s 30% stake is ballsy as a full takeover will face antitrust scrutiny. Yet the returns look attractive. Jumping on the green economy bandwagon should pay off over time.
China threatens to kill TikTok to save it 31 Aug 2020 Beijing has revised export controls to require approval for technologies ByteDance’s video app might need to run, complicating a forced sale underway. If the White House doesn’t blink, TikTok will probably die. China might prefer that to tolerating the ugly precedent being set.
Reliance ties golden bow onto its shopping deal 31 Aug 2020 Mukesh Ambani is bulking up in a fight against Amazon by acquiring retail businesses from Future for $3.4 bln. Kishore Biyani’s outfit first needs shareholder approvals to consolidate assets. His terms are only so-so, but Reliance buying into the rump should help secure checkout.
Chinese beverage IPO turns water into beer 31 Aug 2020 Nongfu Spring, the country’s answer to Evian, is being valued at about $31 bln, or a bubbly 41 times profit. That’s less akin to its closest consumer peers and more like brewers such as Tsingtao. Markets and China are recovering, but there’s also some glass-half-full thinking.
Viewsroom: Republicans hammer it home 28 Aug 2020 At their quadrennial convention, the GOP didn’t give much insight into what four more years of Trump would look like. But they were consistent in battering the Democrats and Joe Biden as a Trojan horse for socialism and other ills. Rob Cox, John Foley and Anna Szymanski recap.
Snowflake IPO may test cloud heights 28 Aug 2020 The data-warehouse firm is more than doubling revenue, but sports big losses, too. Sticky corporate IT spending and customers’ fear of having no alternative to giants like Amazon bolsters Snowflake’s potential. But rivals’ valuations mean its IPO price is likely to hit thin air.
Cox: Republicans mostly rant about fake socialism 28 Aug 2020 The GOP wrapped up a four-day confab-cum-reality TV show combining glowing testimonials about Trump’s achievements with venom against his opponents. Yet the greatest enemy was a phantom economic threat. America’s rich-world allies see socialism as normal, not a disaster.
Corona Capital: Pools, Dell 28 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: Pool firm’s dive into public markets, Dell’s hardware resilience.
Abenomics will live on in a post-Abe Japan 28 Aug 2020 The long-serving prime minister has resigned. Local equities and the yen are rattled, but the fiscal and monetary arrows of Shinzo Abe's eponymous reforms are well established. The growth arrow has flown less high, and the pandemic and demographics will challenge Abe’s successor.
Ant charts a course for Western banks and Big Tech 28 Aug 2020 The Chinese fintech sources consumer and small business loans, which it then passes on to lenders for a small fee. Amazon, Apple or Alphabet could conceivably do the same elsewhere. Banks would lose the customer relationship, but could also cut costs and piggyback on new data.
Review: Indonesia’s Jokowi learns limits to change 28 Aug 2020 Furniture seller-turned-president Joko Widodo was tipped to end corruption and push reforms. In “Man of Contradictions”, Ben Bland concludes the leader is weak and the hopes placed in him were unrealistic. Even a popular outsider cannot easily take on an entrenched system.
TikTok starts to attract a FOMO premium 27 Aug 2020 Walmart’s interest in teaming up with Microsoft to buy the China-backed video app makes sense only in that TikTok is one of a kind, and ByteDance is a forced seller. Like rival bidder Oracle, Walmart is taking a strategic detour. History offers sad examples of how that can end.
HSBC takes first sip of natural capital 27 Aug 2020 The UK bank is teaming up with advisory startup Pollination to invest in sustainable forestry, water supply, natural carbon capture and such. Nature-based solutions are key to minimizing climate change. HSBC's JV is a step towards building the needed mainstream scale.
Jay Powell kills inflation-focused central banking 27 Aug 2020 The Fed chief will now accept overshoots above the 2% target that his monetary policy has in any event failed to hit. Instead, the U.S. central bank’s new mission statement targets robust labour markets more aggressively. It's a recipe for ultra-easy policy more of the time.
Tiffany’s business loses even if shareholders win 27 Aug 2020 There’s little doubt the jeweler is no longer worth the $16 bln LVMH agreed to pay last year. Yet Tiffany’s board is duty bound to push for the highest price. That’s good for investors, but not for Tiffany itself. To earn a decent return, LVMH may have to trash an American icon.
TikTok CEO exit makes chaos even harder to tame 27 Aug 2020 Kevin Mayer is leaving after three months. It's no surprise with the video app owned by China's ByteDance facing a split and sale or a U.S. ban. But a buyer, be it Microsoft, Oracle or otherwise, could have used his help – after all, he has 100 days more experience than they do.
Guest view: Crisis demands reformer at WTO helm 27 Aug 2020 Covid-19 has exposed the dangers of connectedness without cooperation, argues Paul Polman, the former Unilever CEO. Recruiting a new director general with strong political skills, and who is unafraid of change, can ensure the WTO helps reverse the world’s inward turn.
Corona Capital: Abbott’s test, Dollar General 27 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: Abbott Laboratories’ new quick and cheap coronavirus test could be a big step forward in America’s recovery; U.S. consumers’ shift from panic-buying to counting pennies will keep discount stores rolling.
Rolls-Royce self-harms by selling family silver 27 Aug 2020 The British jet-engine maker wants to offload its Spanish turbine-blade unit to patch up its Covid-hit balance sheet. Creditors will be as gleeful as shareholders are glum. If Rolls survives the crisis – and that’s an increasingly big if – it will be with a permanent limp.
Banks’ bad-debt nightmare may have a happy ending 27 Aug 2020 Major lenders in the U.S. and Europe are understandably fretting about dud corporate credit. But, assuming reasonable loan recoveries, they’ve collectively set aside enough to weather a 7% default rate. With money cheap and governments supportive, the cushion looks comfortable.
Delivery Hero M&A feast is DAX-doubtful 27 Aug 2020 The $18 billion food delivery company is buying its way into new, unproven businesses. It just replaced the fraudulent Wirecard in the German blue-chip index, not usually the home of unprofitable and highly acquisitive startups. Expect some adventures.
Swiss outsider has a chance in Borsa Italiana race 27 Aug 2020 Deutsche Boerse and Euronext have been favourites for buying the Milan exchange operator, worth at least 3 bln euros. Unlisted SIX has deep pockets, big ambitions, and tolerance for lower returns. Despite a non-EU base, it could be a worthy contender.
Ant’s big reveal is cost of financial disruption 27 Aug 2020 The Chinese fintech giant's IPO filings show its core consumer lending unit was hit by new rules in 2018, forcing it to upend its business model. Swapping margins for fees has paid well so far. It’s less risky too. Ant survived and thrived, but Beijing is keeping watch.
Xiaomi is next Apple of China’s eye 27 Aug 2020 The $65 bln smartphone maker has exploited Washington's attacks on Huawei to take overseas market share. Its suite of gadgets look similar to the Cupertino giant's, and Xiaomi has maintained a bland political profile at home and abroad. That’s about to pay off.
China’s new electric-car IPO is well-timed 27 Aug 2020 Xpeng priced its U.S. IPO above a range, valuing it at nearly $11 bln. Tesla and local rivals deliver more units in China. But the Alibaba and Qatar-backed maker of affordable cars can speed production by bringing manufacturing in-house. It tees up a fast ride for EV enthusiasts.