Swiss vote reinforces EU’s tough Brexit stance 28 Sep 2020 The Alpine nation reversed its opposition to EU immigration in a referendum, avoiding a messy standoff with its top export market. Broad economic concerns trumped popular angst. As negotiations with the United Kingdom intensify, the outcome will encourage Brussels to stand firm.
Daimler’s new driver can jump-start electric drive 28 Sep 2020 Ex-CEO Dieter Zetsche is not taking charge of the $55 bln Mercedes maker’s supervisory board. That’s a rare win for critical shareholders. Still, the company’s plans to almost double its share of battery cars are behind rival BMW. Daimler could use an outsider at the wheel.
India will win by playing tax cricket 28 Sep 2020 By accepting the international arbitration ruling in Vodafone’s favour, India can shake off its reputation for “tax terrorism” as it seeks to woo investment away from China. Resolution will bring long-term investment gains even if defeat entails painful upfront costs.
Ant IPO offers rose-tinted view of Chinese finance 28 Sep 2020 Alibaba’s payments offshoot has grown into a $200 bln-plus digital middleman for loans, funds and insurance. That’s allowed it to avoid the dodgy credit and opaque transactions which weigh down China’s financial system. New investors are betting regulators will let that continue.
Everyone looks like a deal amateur in TikTok mess 25 Sep 2020 U.S. orders to divest assets are often straightforward. But dizzying contradictions from both dealmakers and the White House have given ByteDance a free pass around rules to sell TikTok. The resulting chaos obscures the stakes: handling data security and foreign takeover laws.
UK bookie bidding war may have two winners 25 Sep 2020 William Hill shares rose 38% after it said Caesars Entertainment and Apollo made rival approaches. Neither will make a decent return at its current market value of $4 bln. Better to opt for a carve-up, with the casino operator taking the U.S. unit and the buyout group the rest.
U.S. election dispute may demand months of hedging 25 Sep 2020 Investors are braced for an uncertain result in November's presidential vote. Bush v. Gore 20 years ago is a tame example. A confused, knife-edge battle in 1876 may be more relevant: The winner emerged only in March. Modern technology could even make things worse.
Review: GE’s decline is the story of corporate BS 25 Sep 2020 This is the main lesson from “Lights Out”, an account of how America’s once-admired industrial conglomerate lost its way. GE bosses from Jeff Immelt on down believed they, and the company they worked for, were infallible. Mistaking a story for a strategy is how companies die.
Corona Capital: Financial centers, Costco 25 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: New York, London and other financial centers still have their luster even if workers will trudge in less to the office; Costco’s coronavirus costs add up.
Apple fight is just one front in Europe’s tax war 25 Sep 2020 Antitrust tsar Margrethe Vestager will appeal a court ruling nullifying demands the tech giant pay Ireland $15 bln of back taxes. It’s time-consuming and possibly futile. With Covid-19 inflating government deficits, political pressure on low-tax states may be more fruitful.
Anti-Huawei drive pays few dividends for rivals 25 Sep 2020 Ericsson and Nokia should gain from the U.S.-led campaign against their Chinese competitor. But boycotts are so far limited to Europe’s 5G equipment market, which is slow-growing and worth less than $4 bln a year. Unless Huawei’s woes spread, any payoff will be little and late.
How to build a European JPMorgan 25 Sep 2020 An EU bank of the U.S. behemoth’s size could help ensure reliable corporate funding and more tech investment. Fragmented liquidity, capital and bankruptcy rules make the necessary mega-deals hard. Though the ECB is helping, it’s really up to national regulators and politicians.
Evergrande’s too-big-to-fail bind comes to a head 25 Sep 2020 The indebted Chinese property developer beseeched officials to approve its reverse merger plan. Although the company claims the letter is fake, the questions in it regarding systemic risk are real for investors and Beijing. A $21 bln payment due soon will force a reckoning.
Some of China’s best reformers are indexes 25 Sep 2020 Officials changed key rules to get FTSE Russell’s global fixed income index to include local bonds, potentially pulling $140 bln into the market. They made similar liberalisations to woo MSCI. There’s still work to do, but foreign money retains clout in Beijing.
Free retail tech-stock bets pile on risk 24 Sep 2020 Recent volatility in U.S. names like Tesla and Apple was probably driven, in part, by call options. While SoftBank’s big purchases raised eyebrows, retail investors’ punts may be a bigger concern. It's one consequence of the no-cost trades pushing big banks out of retail trading.
American Airlines bailout plea looks cheeky 24 Sep 2020 The company wants more public money to avoid furloughing 19,000 workers. But it should have $13 bln of liquidity by the end of the quarter, including discounted loans competitors eschewed. Even if American can’t stay afloat, there’s Chapter 11. The time for handouts is over.
Buffett’s TV deal atones for his Oxy sins 24 Sep 2020 E.W. Scripps’ stock soared after the Omaha Sage’s Berkshire Hathaway helped finance its $2.7 bln takeover of a rival. It’s a stark contrast to the drubbing Occidental took after he enabled its Anadarko pounce. Though small, the Scripps-ION tie-up puts some shine back on Buffett.
Jefferies makes itself the envy of Wall Street 24 Sep 2020 The U.S. investment bank is hiking pay by 26% after a record quarter. Larger rivals like Goldman Sachs and JPMorgan will find that generosity hard to copy: Investors and regulators are unlikely to smile upon big bonuses, even if their traders think themselves just as deserving.
Rishi Sunak’s UK economic safety net has a tear 24 Sep 2020 The finance minister’s new job retention scheme will avoid unemployment surging when furloughs wind up yet costs less than the old arrangement. That’s helpful. But his plan does too little for low-skilled service workers whose roles may disappear forever, and who need training.
Sberbank’s rebrand puts style before substance 24 Sep 2020 Russia’s $67 bln lender is ditching “bank” from its name to sound more like a Big Tech group. Plans for $1 bln in 2020 non-financial digital revenue are a start, but it still has 100 mln banking clients. If the company wants its rejig to motor, it needs better transition targets.
Hadas: Markets’ risky fling is far from over 24 Sep 2020 Fears of returning Covid-19 and revelations like Nikola’s non-driving trucks have restrained investors a bit. But the financial world’s careening exuberance will keep going long after the economy stops benefitting from massive support. Higher asset prices mean bigger risks.
Viewsroom: The dream team to fix America’s economy 24 Sep 2020 As voters head into the final stretch of the U.S. presidential election, Breakingviews has released a new interactive tool to help Joe Biden or Donald Trump pick a cabinet of economic all-stars. Listen to our picks for the battling candidates and learn how the graphic works.
Suez uses leaky defence against hostile bid 24 Sep 2020 The 9 bln euro utility put its water unit in a non-profit foundation. That frustrates bidder Veolia, which wants to sell the business to allay competition issues, but may not stop it. Even if the ploy works, adding complexity dents CEO Bertrand Camus’ pledge to be more efficient.
Corona Capital: Vaccines, Olive Garden, Oil 24 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: Vaccine concerns are bad for the economy; cravings for never-ending pasta bowls return; and oil practitioners tell sad truths.
Breakup could remove Benettons’ Italian roadblock 24 Sep 2020 Atlantia, the clan’s infrastructure group, is at loggerheads with Rome over the sale of its crisis-hit motorway unit. Spinning off the division could end the dispute by establishing a fair market price. It’s a risky manoeuvre, but the threat may bring the government to the table.
Siemens energy spinoff emits faint value pulse 24 Sep 2020 The 96 bln euro engineer’s energy carve-out is a curious mix of wind and hydrocarbons. Worth perhaps 17 bln euros, it will barely dent Siemens’ chunky conglomerate discount. For that, CEO-in-waiting Roland Busch needs to take a bigger knife to the remaining corporate sprawl.
Giant Ant frustrates Hong Kong dollar bears 24 Sep 2020 Appetite for the fintech titan’s mega-IPO has strengthened the currency and triggered intervention. Inflows to bid for and buy shares could exceed $100 bln. The city can handle the volume, but a long line of stock sales creates fresh headaches for doomsayers like hedgie Kyle Bass.
Hong Kong lender tests Elliott’s patience anew 24 Sep 2020 After a long review, $6 bln Bank of East Asia is ready to sell its life insurer. It also promises better cost controls and hints at more deals. Since the pushy hedge fund showed up in 2015, however, the stock price has halved. Perseverance may be less rewarding than in Argentina.
Palantir float marks peak investor apathy 23 Sep 2020 The cryptic data-analytics company is setting a guide valuation of $20 billion for its direct listing next week. Its novel governance means the three founders are in control indefinitely. Incoming shareholders should assume their views won’t count.
GoodRx IPO casts vote against U.S. health reform 23 Sep 2020 The company, which helps consumers find discounts on prescription meds, jumped 40% on its debut. True, the market is so hot that such a pop is now ho-hum. Still, GoodRx’s $18 bln valuation is a bet that a system riddled with middlemen is here to stay, however the election goes.