Forces lowering euro zone inflation aren’t all bad 7 Jan 2021 Euro zone consumer prices fell 0.3% in December from a year ago. Several factors, especially a weak economy, are to blame. Still, a long-term trend that also chips away at inflation is cheaper tech. That’s not something even ECB chief Christine Lagarde would want to see reversed.
A big Chinese backer would be roll of dice for MGM 7 Jan 2021 Investor Snow Lake wants the casino operator to sell 20% of its $6 bln Macau business to a local buyer. There are merits to the idea, including the edge it could provide for a new licence in the world’s biggest gambling hub. It would also, however, complicate other deals.
Cleanup peeks through India’s distressed deal mess 7 Jan 2021 Competing $5 bln bids from Oaktree and Piramal for collapsed housing lender DHFL look closely matched on a mix of criteria. Missed deadlines and mudslinging have marred the process. And yet better recovery rates and a jailed tycoon are good signs for the young insolvency regime.
America’s safe-haven status gets violent test 6 Jan 2021 An invasion of the seat of government by supporters of a president who defies democratic principles ought to worry those who treat dollar assets as a sanctuary. What matters for investors is whether the U.S. system prevails. Even if it does, they should not assume it always will.
NYSE zigzag symbolizes chaotic China crackdown 6 Jan 2021 The U.S. exchange flip-flopped again and will delist three PRC telcos after all. Meanwhile a White House ban on Alipay and other apps may take effect only after the current occupant leaves. And TikTok remains in limbo. Effective curbs on Beijing take more than tongue-lashings.
Stage is set for a record year of M&A 6 Jan 2021 S&P Global, AstraZeneca and Salesforce helped push fourth-quarter deal volume over $1 trln. Flush balance sheets and ultra-cheap money add momentum. So do CEOs struggling to find growth on their own. Regulators could get tougher, but the 2015 peak of $4.2 trln is within reach.
Walgreens $6.5 bln deal is a mutual back-scratch 6 Jan 2021 AmerisourceBergen is buying the drug chain’s European distribution business, in what amounts to a relatively attractive way to expand internationally. Walgreens gets a slug of cash – and CEO Stefano Pessina gets one step closer to one day potentially taking the company private.
Bad auditors need to be fined like bad lenders 6 Jan 2021 Deloitte’s 15 mln pound fine for poor audits of software company Autonomy is light punishment given shortcomings laid out in a new report. The UK’s oversight regime is being overhauled. But doling out heftier bank-style fines is the surest way to shift behaviour.
Qualtrics’ German parent will SAP its IPO value 6 Jan 2021 The survey maker’s float coincides with sky-high multiples for software peers. Its high revenue growth rate could in theory merit a price tag of $20 billion or more. Yet a potentially meddlesome controlling shareholder in European behemoth SAP argues for a hefty discount.
Corona Capital: U.S. college football 6 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: U.S. college football programs are in a talent arms race for coaches, a bit like companies' quest for top-ranked CEOs, despite the pandemic's impact on revenue.
Georgia vote may give companies half-full glass 6 Jan 2021 Democrats could eke out a Senate majority in a runoff race that’s too close to call. The slim margin would hand more power to moderates on issues like green energy and taxes, in turn helping offset greater scrutiny of firms. Either way, Corporate America can avoid the worst.
Hong Kong puts business on notice with roundup 6 Jan 2021 Police arrested over 50 opposition candidates and a U.S. lawyer in dawn raids linked to an unofficial primary race. Banks and brokerages can mostly shrug it off, but for media and tech firms that host or transmit any exchange of ideas in the city it’s the dawn of a riskier era.
Saudi gets a partial brand detox with Qatar thaw 6 Jan 2021 Ending Riyadh’s three-year embargo with Doha gives both states a minor economic boost. It also removes one of U.S. President-elect Joe Biden’s Saudi-related headaches. But its main benefit could be to reduce the extent to which foreign investors see the kingdom as kryptonite.
China takes clumsy swipe at sloppy credit ratings 6 Jan 2021 Dagong Global has been ordered to help repay bondholders in a construction company that defaulted on over $200 mln. Courts are understandably getting tough with so much unpaid debt by top-rated issuers. This sort of punishment, however, will lead to fewer not better assessments.
Li Ka-shing buybacks would rebuild value 6 Jan 2021 Cash is rolling in from $28 bln CK Hutchison’s restructuring of European and Canadian assets. The Hong Kong billionaire’s ports-to-pharmacies group plans to repurchase stock. With deal-making curtailed by geopolitics, shareholders will appreciate the gesture.
Bitcoin offers economics lesson, if little else 5 Jan 2021 The cryptocurrency’s value has more than quadrupled in 12 months. Volatility makes it a lousy currency, though, and its usefulness remains marginal. The epic price rise is a textbook case of Fed-fueled, Tesla-like speculative demand meeting scarce supply.
IPO cheerleader trend deserves zero cheers 5 Jan 2021 Pre-IPO endorsements from potential investors like BlackRock have helped produce big pops in recent U.S. debuts like C3.ai. These resemble the cornerstone investments seen in Asia, but without the shared risk. Such sweetheart deals are the last thing a frothy market needs.
The Exchange: The personal risks in short-selling 5 Jan 2021 Muddy Waters shorted stocks like health provider NMC and forest plantation group Sino-Forest, aiding their collapse. But founder Carson Block tells Dasha Afanasieva he almost quit due to the stress of facing a criminal investigation. For him, politics may be an alternative path.
Dixon: How to make COP26 climate summit a success 5 Jan 2021 Politicians and markets increasingly get the danger of climate change. And technology is advancing fast. But the climate is also deteriorating rapidly. Here are six things that can be done at this year’s summit to make sure the planet doesn’t lose the race against time.
China delisting reversal calls for consistency 5 Jan 2021 The NYSE abruptly aborted plans to toss three state-backed telecom companies worth a combined $164 bln off the bourse because of their deemed military ties. Wild swings in the stock prices left investors as confused as Washington seems to be. Clear policy can’t come soon enough.
Third lockdown entrenches Britain’s great divides 5 Jan 2021 The virus has already hit smaller companies and the less affluent harder than bigger firms and the rich. New restrictions to control a fresh outbreak mean a deeper slump, until vaccines come to the rescue. Other countries will need to act more quickly to avoid similar pain.
Bank capital rules are only half fixed 5 Jan 2021 Big shock absorbers allowed American and European lenders to survive the pandemic. Even so, they required state guarantees and supervisory relief to support lending. Though post-2008 reforms made banks safer, their instinct to preserve capital can make an economic crisis worse.
Corona Capital: Commercial real estate, IBM 5 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: Commercial office real estate is Zoom’s mirror image; IBM taps former Goldman-exec Gary Cohn.
Tokopedia neatly channels Indonesia’s potential 5 Jan 2021 The online shopping site, valued at $7.5 bln, lags Singapore’s Sea in the country. But the smaller company stands out for its single focus on one of the world’s fastest rebounding and digitalising economies. No wonder everyone from Gojek to Peter Thiel sees it as a hot target.
Jack Ma’s absence feeds into China Inc fears 5 Jan 2021 The Ant and Alibaba founder has not been seen in public for two months. Amid Beijing’s crackdown on both the fintech and e-commerce empires, keeping a low profile seems prudent. A history of Chinese tycoons mysteriously disappearing, though, is enough to warrant some concern.
The World Emerges 5 Jan 2021 Read Breakingviews' predictions and prescriptions for the year ahead by viewing the PDF or website.
Cure for U.S. healthcare malady isn’t capitalism 4 Jan 2021 Amazon, Berkshire Hathaway and JPMorgan took on America’s medical dysfunction and failed, disbanding their joint venture Haven after three years. Big as the three are, they’re dwarfed by the vested interests that keep healthcare expensive. Now it’s the government’s turn.
Brookfield picks up a $5.9 bln new year bargain 4 Jan 2021 The Canadian investment firm’s bid to take its commercial real estate arm private is cheap by its own admission. That suggests there’s room for a small bump. Yet investors may have little appetite to fight a determined majority shareholder, or an uncertain real estate market.
Urge to purge 2020 from memory should be resisted 4 Jan 2021 Nearly everything that could go wrong did. The pandemic threw plans – and predictions – out the window. As the world emerges and maybe slingshots into a Roaring Twenties rebound, old appetites will return. But the divisions Covid-19 exposed in our societies can't be forgotten.
Brexit throws down electric gauntlet to UK cars 4 Jan 2021 Britain’s motor industry has escaped European Union tariffs that would have hobbled half its output. But to meet export rules on low-carbon vehicles by 2024, Prime Minister Boris Johnson needs to ramp up battery output. Convincing groups like Nissan and BMW to stay will be tough.