Pandemic pet boom keeps running for new top dogs 24 Dec 2020 Locked-down humans adopted more four-legged friends in 2020 and upped spending on pet supplies and medicine, causing the stock prices of firms like Chewy and Zoetis to rally. Old-school pet chains also benefited, but as nimble e-retailers take more sales, the pack may thin.
Corona Capital: Poverty, Beer cans, Budget hotels 24 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Hong Kong’s poverty problem was getting worse even before the virus struck; AB InBev sells the family aluminium to cut debt; Whitbread, owner of hotel chain Premier Inn, tries to get its landlords to share the pain.
European soccer will try on American-style pay cap 24 Dec 2020 Empty stadia wiped out nearly $4 bln in sales, pushing even rich clubs like Manchester United and Barcelona into the red. A partial return for fans barely eases the pain. To save itself, the beautiful game will have to import the U.S. National Football League’s limit on salaries.
The Franken-economy that will thrive post-pandemic 24 Dec 2020 The ideal nation to emerge from Covid-19 has South Korea’s superb internet connections and technology know-how. Like Singapore, robots are widely used in industry. And it boasts skilled workers to rival Switzerland, sells high-value exports to China, and leads on green energy.
Xi Jinping dumps coal in Alibaba’s stocking 24 Dec 2020 Investors wiped $60 bln off the e-commerce giant’s market value on Christmas Eve after Beijing launched a formal probe into its suspected monopolistic behaviour. Officials signalled further scrutiny on fintech affiliate Ant too. The empire Jack Ma founded faces a long winter.
China’s WM Motor will overtake Tesla wannabes 24 Dec 2020 The electric-car maker is set to list on Shanghai’s Star Board. It’s late to market and underhyped compared to Elon Musk’s operation and local rivals like Nio or Xpeng. But having targeted the mass market, a gross profit will already be in sight when it lists.
Online education will weed out stragglers 24 Dec 2020 Covid-19 rang the bell for virtual-school investment. Outfits like Byju’s in India and China’s Yuanfudao are raising money while Citi reckons edtech spending may double to $360 bln by 2024. Fierce competition should spark consolidation in 2021, leaving only the best in class.
Guest view: China’s role in emerging economy debt 24 Dec 2020 Developing nations, struggling to repay loans, are being slowly locked out of credit markets. Their plight is likely to worsen. But when it comes to resolving this looming crisis, China has been largely missing in action. It should be held to a higher standard.
Viewsroom: Predictions and prescriptions (Part 1) 23 Dec 2020 Governments will become activist investors; U.S. airlines will merge; data centres will be the new ESG target; energy giants to consider renewable spinoffs; Tesla will buy Daimler; European soccer gets more American and more. Rob Cox, Peter Thal Larsen and Lauren Silva weigh in.
Big Tech needs a dose of Wall Street’s medicine 23 Dec 2020 Companies like Amazon and Facebook are so big that fines for bad behavior hold little sting. In that way, tech is becoming like finance. Bank regulators have found other ways to promote good behavior, from clawbacks to curbs on buybacks. Those would work in Silicon Valley too.
Premiumisation will reach its limits in year ahead 23 Dec 2020 Makers of beer, cosmetics, even laundry liquid, managed to grow by charging consumers more for fancier versions of everyday items. Some affordable luxuries will endure in hard times. But lower incomes will force groups like Unilever and Heineken to refocus on volume over price.
Corona Capital: Tesla’s Apple snub 23 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Tesla boss Elon Musk asked to meet with Apple back in the day, and got rebuffed. Musk’s company has been the better investment recently, especially during the Covid-19 period. That doesn’t mean Tim Cook missed out.
Time for India to end its global tax fights 23 Dec 2020 The Hague awarded Cairn Energy $1.4 bln in its spat with New Delhi, more than the UK group’s market cap. Vodafone had a similar win. Accepting these outcomes would make Boris Johnson’s January visit run smoothly, and inject credibility into India’s global investment ambitions.
5G will zoom from myth to mass-market reality 23 Dec 2020 The mobile technology is much debated and little used. But falling prices mean most handsets sold in 2021 will work on new networks. Post-pandemic consumers may happily pay for extra reliability and speedier downloads. Commercial uses remain vague, but phone envy will kick in.
Stars align for luxury circular economy 23 Dec 2020 The pandemic and a desire to save the planet will prompt shoppers to buy pre-owned apparel. Luxury items’ lasting charm may unlock a $600 bln market for old Gucci, Hermès and other high-end brands. Even manufacturers could get in on the act, marrying financial and ESG goals.
Beijing attacks from rear in online grocery war 23 Dec 2020 Officials summoned Alibaba, Pinduoduo and other e-commerce giants to a disciplinary meeting on their Groupon-like supermarket operations. The $14 bln market is vibrant, but state media say dumping and supplier gouging is rife. Beijing’s assault on tech companies is widening.
WhatsApp, Google can thrive as super-apps in India 23 Dec 2020 Entrepreneurs that designed the country’s unique affordable payments system are pushing to lower fees and unbundle the online market in shopping, food delivery and mobility. It’s a new kind of Robin Hood e-commerce that could extend the reach and curb the power of tech giants.
Tea bubble is set to inflate in China 23 Dec 2020 Coffee has been all the rage across the country as McDonald’s and the local KFC owner challenge Starbucks. On the rise, however, are bubble tea chains Heytea and Nayuki, which are angling for IPOs. Exuberance for consumer companies will have investors gulping down their shares.
Vodafone finds better German M&A pain threshold 22 Dec 2020 Seven years after its Kabel Deutschland deal, the UK telco is paying $2.6 bln to buy out minorities like Elliott. That’s better than the 18 years taken to settle a similar saga with Mannesmann. But as with other “domination agreements”, holdouts are unlikely to have done badly.
An indie ESPN will keep Disney ahead of the game 22 Dec 2020 The $300 bln company is shifting its focus to Disney+. The sports network is still valuable but high programming costs from franchises like the NFL and declining subscribers due to cord cutting are looming problems. An ESPN spinoff is the way boss Bob Chapek can make his mark.
Latin America debt will hit post-crisis sweet spot 22 Dec 2020 Corporate defaults in the region have jumped during the pandemic and political concerns persist. But ultra-low global interest rates and expectations that richer countries could spend more on infrastructure will be enough to entice yield-hungry investors to these markets.
Corona Capital: Peloton, BioNTech 22 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Peloton shareholders are getting a little too pumped up; BioNTech’s boss gives two reasons not to panic about the latest Covid-19 strain.
Picture this: Netflix and Amazon buy cinema chains 22 Dec 2020 The tech giants’ streaming services have become more powerful with people cooped up at home. But competition has intensified, and theatres remain an important marketing channel. To extend their leads, bundling box office access with a subscription serves as a key differentiator.
Big Tech’s gaming gamble will call for M&A 22 Dec 2020 Google and Amazon want to do to video games what Netflix has done to television. Their cloud-based gaming services face technical challenges, but the bigger test is luring gamers from established platforms like Microsoft’s Xbox. Acquisitions are the fastest way to the next level.
Russia’s wheat tax scrapes bottom of policy barrel 22 Dec 2020 Fiscal conservatism and administrative issues make it tricky for Moscow to support citizens via European-style furloughs. Its Plan B, a levy on wheat exports, is supposed to limit domestic food price inflation. But in doing so it will probably undermine a key Russian industry.
China’s economic triumphalism gets harder to take 22 Dec 2020 Quick Covid containment let the People’s Republic restart factories ahead of other countries. That helped its companies grab export share at others’ expense. A resurgence of overseas M&A could come next, and struggling economies will find it harder to resist Beijing’s capital.
Face-to-face business habits will die hard 22 Dec 2020 Zoom and its ilk have helped virtual deals and roadshows cost less in cash and jetlag. Going digital also should expand the pool of board directors and make shareholder meetings more inclusive. Even so, plenty of work that moved online in 2020 will revert to the real world.
Hainan luxury license rubs salt in Hong Kong wound 22 Dec 2020 Top marques are betting affluent Chinese tourists will stick around the island province’s new duty-free stores after the pandemic. That shift would probably come at the expense of nearby Hong Kong, long favoured by mainland shoppers. Unfortunately Beijing doesn’t seem to care.
Thoma Bravo digs deep in $10 bln rental data LBO 21 Dec 2020 Online rent collector RealPage is a big target for the private equity group’s massive war chest. It’s growing, and data aggregators are highly prized. But the deal looks dependent on hearty growth, without which Thoma Bravo might struggle to make a good return.
MRNA is a $120 bln bet on platform, not vaccines 21 Dec 2020 This emerging biotechnology has delivered two Covid-19 jabs with miraculous speed, pushing firms like Moderna and BioNTech to big valuations. The new year will see these companies doused with even more money, which will help efforts to treat cancer or rare diseases post-pandemic.