The Exchange: American banks and the urge to merge 21 Dec 2020 U.S. financial institutions have increasingly been teaming up to take on the big four: JPMorgan, Citigroup, Bank of America and Wells Fargo. Bruce Van Saun, chief executive of Citizens Financial, one of the top regional lenders, discusses post-pandemic banking with Rob Cox.
Messy U.S. aid could use creative do-over 21 Dec 2020 Congress finalized an inadequate but better-than-nothing $900 bln stimulus plan, though methods remain fractured and inefficient. That suggests that future aid will be necessary, but it requires both political will and a rewrite. Biden has a big cleanup job on his hands.
China Inc will recycle used white guys 21 Dec 2020 American firms are pushing to make rosters more inclusive. That, plus downsizing, will shove skilled – if Caucasian – older male managers and experts into the job market. Chinese firms seeking IP and insight into U.S. markets will scoop them up. It could work better than M&A.
Bank buybacks are a Fed gift nobody needs 21 Dec 2020 The central bank will let lenders resume some stock repurchases, but with limits on how much. It’s no great sacrifice: buybacks are good for earnings per share, but they don’t obviously create value. And it’s not like investors can obviously spend the money better themselves.
UK gives dark glimpse of pandemic’s next act 21 Dec 2020 Countries have cut air links with Britain, and France has halted road freight amid a new Covid-19 strain. Brief halts are bearable, and may even shove the UK to an EU trade deal. But sustained disruption or less effective vaccines would jeopardise a strong 2021 global rebound.
Corona Capital: Vaccine dibs 21 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Vaccine prioritization is about to get competitive.
Governments are new activist investor on the block 21 Dec 2020 The pandemic has freed states to roll back decades of reduced investment in business. Bailouts have bequeathed stakes in distressed companies, while security concerns are encouraging politicians to inject capital into startups. Good governance needs to be on the agenda in 2021.
Big Oil will cash in on sun and wind 21 Dec 2020 Covid-19 and ESG have crushed the stock prices of companies like Total and BP. Listing their growing renewables businesses would help capitalise on inflated valuations. There’s a hedge of sorts: if the spinoffs don’t work they can be bought back on the cheap, Iberdrola-style.
Rusal’s Deripaska discount makes partial return 21 Dec 2020 The aluminium group’s Hong Kong shares fell after a Bloomberg article claimed former controlling shareholder Oleg Deripaska still exerts influence. Rusal and holding company En+ deny that he does. So far, investors are not taking fright like they did in April 2018.
Grab CEO will step into 2021’s tech limelight 21 Dec 2020 Anthony Tan has steered his $15 bln super-app through the pandemic. With growth in digital payments booming across Southeast Asia, Grab is now charging into wealth management and digital banking. A mooted merger with rival Gojek will only cement Tan’s rising star status.
Next Hong Kong bourse boss should resist deal urge 21 Dec 2020 Stock exchanges are buying each other and data giants like $27 bln Refinitiv, activity that tempted outgoing HKEX chief Charles Li. Providing a gateway to China, however, is the company’s special sauce. Capital and attention are best focused on the rising threat from Shanghai.
Big Tech pile-on could block future moon shots 18 Dec 2020 Google is now deluged by three U.S. lawsuits, claiming it’s abusing market power. Facebook faces its own challenges against government prosecutors. The duo may beat back the charges but, like Microsoft in the 1990s, too much distraction could make them miss the next big thing.
Review: Money’s history proves credibility is king 18 Dec 2020 Jacob Goldstein’s book traces currency’s messy journey from Mesopotamian IOUs to bitcoin. He shows it has always been based on shared beliefs and trust, and is closely connected with the development of political freedom. Turns out, curbing power may be key to making money work.
Corona Capital: Holiday Zoom 18 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: The video call company is removing the 40-minute time limit on free calls for the holidays – a gift it can easily afford, and one that may not be appreciated.
Big Pharma’s vaccine immunity will be fleeting 18 Dec 2020 Groups like Pfizer and AstraZeneca are emerging as pandemic heroes. Their ability to rapidly test, make and distribute vital doses will help quiet the industry’s critics. However, universities and governments also played a big part. Pressure to slash drug prices will soon return.
Philips’ cardiac deal carries heart-stopping price 18 Dec 2020 CEO Frans van Houten agreed to buy U.S. group BioTelemetry for $2.8 bln including debt. It’s wise to push further into “telehealth”, where doctors treat and monitor patients remotely rather than in hospital. But the valuation he’s paying will make it hard to earn a good return.
Ominous iron ore seam opens in Aussie trade row 18 Dec 2020 Chinese state buyers are griping about how the steel ingredient is priced as officials Down Under debate an export tax. Beijing already has targeted wine and other imports. The idea that miners BHP and Rio might get dragged into the spat can no longer be discounted.
Guest view: Woke markets present growing dangers 18 Dec 2020 The politicisation, and even weaponisation, of ESG investing is a concern, argues Frank Sixt, finance director at CK Hutchison. Exclusionary strategies are too prone to populist influence and ratings are chaotic. Absent quick changes, capital allocation distortions will rise.
U.S. airlines need rules as well as rescues 17 Dec 2020 They could get another $17 billion if Congress approves a new relief bill. Since American Airlines and its peers merit taxpayer rescues, bailouts ought to come with tighter strings. That could mean limits on debt, or ensuring they have enough cash to remain aloft for longer.
Viewsroom: Bank dividends and Chinese rentals 17 Dec 2020 European regulators’ cautious lifting of a ban on bank dividends leaves investors in limbo, plus details of an unusually bold growth strategy from Credit Suisse. And the collapse of China’s WeWork-like apartment rental middlemen has left many young tenants homeless and in debt.
Wall Street ends 2020 with embarrassment of riches 17 Dec 2020 The top banks end a troubled year substantially better off, thanks to jumbo trading profits, government help for borrowers and a curb on stock buybacks. The question is how to spend it. Traders and shareholders will clamor for a cut, but it’s taxpayers who did the heavy lifting.
EU’s Google-Fitbit approval sets risky precedent 17 Dec 2020 Antitrust tsar Margrethe Vestager approved the $2.1 bln deal with conditions. The buyer’s pledges, like giving rival fitness trackers equal access to the Android operating system, are great in theory but hard to monitor. Vestager may only spot the loopholes once the harm is done.
Puppy SPAC may bite investors in the backside 17 Dec 2020 Barkbox, a pooch products purveyor, is going public with a blank-check company valuing it at $1.6 bln. It’s smart to pounce on the opportunity created by booms in pet goods, subscriptions and SPACs. But Chewy, the 800-lbs Great Dane in the room, guards the market like Cerberus.
Corona Capital: Private jet deal 17 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Blackstone bets that plutocrats will be back in the air before the rest of us.
Rio’s new CEO reflects its lack of wiggle room 17 Dec 2020 Finance director Jakob Stausholm is the surprise choice to lead the $126 bln miner. Rio’s self-imposed difficulties in Mongolia and Australia meant an outsider might have been preferable. But given Rio may feel the need to soon replace its chairman, continuity is also important.
KKR finds lucrative new exit: German taxpayers 17 Dec 2020 The buyout firm is selling 25% of defence supplier Hensoldt to the government, which wants to block foreign buyers. Such trades usually incur a discount, but at $550 mln KKR is getting a rich premium. Dealing with increasingly activist states brings opportunity as well as risks.
Spanner in Tencent’s M&A machine could be useful 17 Dec 2020 Dealmaking has helped make the $700 bln tech company dominant in online books, music-streaming and e-sports. The strategy no longer looks sustainable as China's trustbusters intensify their scrutiny. Fewer acquisitions by boss Pony Ma might be better in the long run anyway.
Moutai investors are entitled to be uncharitable 17 Dec 2020 Over 200 shareholders are filing a rare class action suit against China's $350 bln booze champion over donations to government entities. Their complaint exposed a legal loophole regarding philanthropy. If Moutai abused the rules and gets away with it, others will exploit it too.
Biden’s Cabinet picks can lean into free markets 16 Dec 2020 Investors are flooding into companies that could bring both energy and transportation into a greener and more efficient future. That should help the president-elect’s picks, Jennifer Granholm and Pete Buttigieg, in their roles, assuming they can lift – not implement – red tape.
Robinhood gamification charge sends early flare 16 Dec 2020 Massachusetts regulators filed a complaint against the trading firm saying it aggressively lures inexperienced investors. The site has impressive stats, but many amateurs are benefiting from inflated markets. Too often the government takes action after they have been burned.