Myanmar all but fades from investment frontier 1 Feb 2021 Military detentions of Aung San Suu Kyi and other ruling party figures represent a dark turn for a once-bright opportunity. An economy that lured tourists and foreign companies such as Kirin may be headed back to isolation. Recovering again will be a painstaking process.
Washington takes low road back to Latin America 1 Feb 2021 Days before Donald Trump left office, a U.S. development bank agreed to help Ecuador repay some $3.5 bln of debt in exchange for locking China out of its telecom network. Reviving relationships in the region makes economic sense, but it’ll take more than chasing Beijing away.
India Insight: Amazon has plenty to fight for 1 Feb 2021 The e-commerce titan led by Jeff Bezos is trying to stop the sale of a big-box retailer to Mukesh Ambani’s Reliance. The spat centres on a disputed contract. An Amazon victory could cost thousands of jobs. The business itself may be less important than the message being sent.
Robinhood free lunch was never really free 29 Jan 2021 The online broker’s restrictions on trading of stocks like GameStop look at odds with its mission to democratize finance. Yet Robinhood’s rush to raise cash shows that there’s a side to zero-cost trading that users don’t see. Safe trading costs money, one way or another.
Chevron looks exposed without cover from Exxon 29 Jan 2021 The $171 bln oil group's shares fell premarket on Friday despite a reduced fourth-quarter loss and steady production. Boss Mike Wirth is maintaining a strong balance sheet. That sets Chevron up well, but without its larger rival's usually same-day earnings, there's less to like.
Review: Mission economy may be mission impossible 29 Jan 2021 Mariana Mazzucato wants states to embrace the 1960s spirit of the U.S. moon race to improve the planet. The race for a Covid-19 vaccine and the 750 bln euro EU recovery fund come close to her vision. Yet the pandemic also shows politicians can be unfit to tackle big challenges.
HNA’s final agonies deserve investor study 29 Jan 2021 The indebted Chinese travel group looks set to enter bankruptcy. That’s unusual but unsurprising: Beijing already let a bank go under last year, and allowed market-rattling bond defaults. Given the empire’s complexity and broad creditor base, distributing haircuts could get ugly.
Bubbly stocks risk painful vaccine puncture 29 Jan 2021 Drugmakers Pfizer and AstraZeneca are cutting deliveries of Covid-19 inoculations, the latest in a string of delays. Slower-than-expected rollouts and virus mutations may prolong lockdowns, hurting growth. Investors eyeing a rapid bounce-back this year could be disappointed.
Airlines’ virus parachutes warrant minimal padding 29 Jan 2021 Quarantines could mean carriers like easyJet face further losses over the summer boom months. In extremis, they can flog planes or tap investors for cash, although neither are ideal. Given CO2 emissions and their non-strategic nature, they don’t merit special treatment.
Ericsson’s China gains heighten blowback risks 29 Jan 2021 The $41 bln Swedish telecoms kit maker’s prospects are soaring due to Western bans on Chinese rival Huawei. But the Middle Kingdom is also its hottest 5G equipment market. The risk of reprisals should its own government ban Huawei are increasing.
Corona Capital: Vaccines, Dr. Martens 29 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: Quantity matters with vaccines, while Permira gets an extra kick from the bootmaker.
Shaky electric-car maker zips into market mania 29 Jan 2021 Faraday Future, which has yet to sell a vehicle, will get yet another lease on life by way of a SPAC. Chinese automaker Geely is also backing the $3.4 bln venture. There are red flags galore, including internal control weaknesses. The biggest may be founder Jia Yueting himself.
Pain of China’s bad holiday will be widely shared 29 Jan 2021 Fresh Wuhan-style lockdowns have been imposed ahead of the Lunar New Year break, a week-long spending boom. Less travel may reduce disruption for factory owners but it’s a blow for already weak consumption. A subdued getaway will exacerbate the imbalances of China’s recovery.
Breakdown: GameStop, a financial markets whodunnit 28 Jan 2021 Wild surges in so-called meme stocks have created big winners and rising concern about what happens when market bystanders get hurt. As in a detective thriller, there’s a weapon, an opportunity and a motive. There’s also a good chance that the punishment will outweigh the crime.
AstraZeneca finds Covid-19 charity comes at a cost 28 Jan 2021 The pharma group’s shares have been hit amid a spat with the EU over its virus treatment, on which it isn’t making a profit. German scientists have now undermined the drug. Making vaccines in a crisis was never going to be easy. In future drugmakers may demand a higher price.
If only American Airlines’ stock pop helped it 28 Jan 2021 Shares of the struggling government-supported $10 bln airline surged 60% in premarket trading after a mention on the same online forum that boosted GameStop. Ideally, American could issue equity at a pumped-up valuation. But the phenomenon may be too fleeting to take advantage.
Guest view: Auditors hold key to climate crisis 28 Jan 2021 Accountants are not obvious saviours for a world threatened by global warming, argues Natasha Landell-Mills. But their central role in vetting companies’ financial sustainability, and their ability to act independently of regulators and executives, gives them a duty to be bold.
Viewsroom: Short squeeze craziness, Oz in the lead 28 Jan 2021 Something completely wacky is happening with GameStop and a few other stocks favored by short sellers, and it’s likely to end very poorly for some armchair traders, Breakingviews columnists discuss. Plus, a visit to our Melbourne bureau for tennis and Google lessons.
Prudential’s shortcut adds pace to Asia pivot 28 Jan 2021 The $46 bln insurer is demerging its American unit and raising up to $3 bln in equity as it focuses on Asia. Investors expecting a capital bonus will now worry about its ability to fund future growth. But if the move helps Pru achieve an AIA-like multiple, it’s worth the trouble.
Corona Capital: GDP, Corruption, Norway 28 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: U.S. output growth slows from a surge to a gentle trot; Transparency International flags that corruption and pandemic-fighting don’t mix; and Norway’s sovereign wealth fund sees its tech bets pay off.
Bond markets will be new climate vigilantes 27 Jan 2021 Booming demand for sustainable funds and new EU rules will make debt investors more wary of buying securities issued by polluters. There are already signs that is happening in the oil and gas sector. Higher funding costs should be a powerful spur for companies to get serious.
China creates a bigger consumer credit mess 28 Jan 2021 Beijing needs institutions that measure individual default risk. Given thin credit histories at banks, it wants fintech giants like Ant to hand over valuable data to state-run firms with fuzzy business models in exchange for equity. That’s no way to build a sustainable system.
Sinopharm inhales invigorating Chinese herbs 28 Jan 2021 The pharma giant is planning to take Hong Kong-listed China Traditional Chinese Medicine private in a $3.3 bln deal. The market's growth, high margins and political support justify the premium. Relisting on the mainland at a richer valuation will be good for shareholders’ health.
Elon Musk has the right amount of market cynicism 27 Jan 2021 Tesla’s CEO is often flippant about share price moves – whether his own or other so-called meme stocks like GameStop. But the automaker’s first full year of positive profit suggests Musk is working in shareholders’ long-term interests. That matters even if the stock bubble pops.
Climate activists melt Exxon glacier of truculence 27 Jan 2021 The $194 bln oil giant has largely ignored investors worried about the environment and that oil's best days are over. Now it may add independent directors, make greener investments, and cut capex. Credit squeaky activists plus a rumbling threat from institutions like BlackRock.
Facebook has little to fear but itself 27 Jan 2021 Everything was thrown at the $800 bln social network in the last year, from an ad boycott to antitrust lawsuits. Mark Zuckerberg’s business still posted a 33% jump in quarterly revenue. Regulatory pressure is rising, but the greatest danger for Facebook may be getting distracted.
Apple’s new golden goose is at risk of plucking 27 Jan 2021 The $2.4 trln tech group made $15.8 bln in revenue from services last quarter. If growth keeps up, subscriptions and such could be more profitable than the iPhone within a few years. It's also where Apple is most vulnerable to antitrust pressure from regulators and customers.
AT&T’s big deal reckoning unlikely to be its last 27 Jan 2021 The U.S. telecom firm took a $16 bln write-down on pay-TV unit DirecTV, which it bought for $67 bln in 2015. It’s not the only part of AT&T facing tough times. Time Warner, which cost $109 bln, is struggling because of theater closures – a trend that may not reverse.
Boeing’s kitchen sink lacks a plug 27 Jan 2021 The company posted a record loss in 2020 and took a $6.5 billion write-down on a new jet program that has been delayed. Problems with its MAX model are giving way to ongoing Covid-19 issues. Given a lack of visibility on how those will resolve, Boeing’s valuation looks too high.
JPMorgan’s UK push will be trickier than Goldman’s 27 Jan 2021 Jamie Dimon’s $400 bln group is launching an online bank in Britain. Unlike its rival’s Marcus brand, which just takes deposits, the venture looks like a full-service retail lender. In a saturated and sophisticated market, the U.S. giant’s edge will be how much pain it can bear.