Hong Kong makes timely bet on taxing trading 24 Feb 2021 The government is hiking stamp duty on buying and selling shares as it tries to reduce a projected $13 bln budget deficit. HKEX stock fell 9% but is double its level 12 months ago after a bumper year. Other regulators eying overheated markets in struggling economies might follow.
Aussie jobs firm careers into a messy overhaul 24 Feb 2021 Shares in $8 bln Seek tanked 14% on plans to break in two, lose its founder-CEO and cut its prized stake in Zhaopin. At 14 times EBITDA, the sale values the Chinese unit in line with rivals but lower than Seek’s frothy multiple. Management and investors both deserve a bad review.
Japan Inc faces Olympic sexism trial 24 Feb 2021 A woman replaced the games’ boss after chauvinist comments. His attitude is common; women make up 13% of directors at large listed companies. Tokyo’s bourse will push for better representation on its new “Prime Market”, but a thin pipeline of female managers risks tokenism.
Joe Biden’s best weapon against China is teamwork 23 Feb 2021 The new administration is toning down the rhetoric but is nevertheless taking a tough line on Beijing. Less capricious trade policies and a willingness to work with Western allies may make the approach more effective than Donald Trump’s attempts to rein in the People’s Republic.
Drinks-can SPAC offers a healthier kind of bubble 23 Feb 2021 Packing firm Ardagh’s metal unit differs from some blank-check targets in that it’s profitable and tangible. The $8.5 bln valuation relies on punchy assumptions, but is less fizzy than, say, rockets or genetic testing. It’s the kind of thing SPACs need to build credibility.
SPACs and electric cars drive hype feedback loop 23 Feb 2021 Ex-Citi exec Michael Klein has struck the largest ever blank-cheque merger with a deal valuing Lucid Motors at $24 bln. Investors already think it’s worth more than double that. Lucid is a decent bet on battery power but its absurd multiple outstrips all rivals, including Tesla.
Capital Calls: WeWork, HSBC offices, Wells Fargo 23 Feb 2021 Concise views on global finance in the Covid-19 era: Co-founder Adam Neumann may get a big payment for failure after all; The bank’s plan to shrink its property footprint recalls an earlier effort; And the scandal-plagued lender takes another small step towards rehabilitation.
HSBC’s renewed Asia focus goes only so far 23 Feb 2021 Boss Noel Quinn is aiming for more savings and an extra $6 bln of investment in the faster-growing region. Even if all goes to plan, it will remain a high-cost, low-return bank with global sprawl. More radical steps, like spinning off the UK business, would alter the equation.
Saudi’s HQ edict puts global banks in awkward spot 23 Feb 2021 The kingdom has ruffled feathers with plans to withhold state contracts from groups that don’t base their Middle East headquarters in Riyadh. The rule may not apply to all sectors. Even so, bankers face a tricky call over whether to up sticks or risk angering a valuable client.
JD offers peek into China’s e-commerce machine 23 Feb 2021 The $160 bln web retailer is spinning off its logistics arm. Upgraded delivery systems have supported an online shopping boom that is driving yet more growth in the sector: a virtuous cycle. JD's high-tech operation and shrinking losses should excite investors.
Turf war puts Chinese regional GDP plans at risk 23 Feb 2021 China may skip setting a national growth target for a second year. But provinces have set their own, suggesting an expansion of at least 6.8% in aggregate. The central bank doesn't want to ease, while the finance ministry is reluctant to spend. It's quite the trilemma.
The Exchange: Tobias Harris 23 Feb 2021 The biographer of former Japanese Prime Minister Shinzo Abe speaks with Pete Sweeney about the country’s struggles. Harris argues Abe’s successor Yoshihide Suga could push harder on clean energy and economic reform. And if the Olympics get cancelled, most Japanese won’t mind.
Fed musical chairs takes away Wall Street’s seat 22 Feb 2021 Chair Jay Powell’s views on jobs make it easy for President Biden to rehire him when his term ends. The same isn’t true of the Fed’s top cop, Randal Quarles. His exit would make space for a more progressive candidate, potentially saddling banks with sterner capital requirements.
Boeing stares down a future that’s a bit like GE 22 Feb 2021 The $127 bln aircraft maker run by General Electric alum David Calhoun now has problems with some engines it uses. It comes just as 737 MAX issues are in the rear view. Boeing's future is burdened by inertia and a growing debt load. As GE shows, that can take decades to unwind.
UK online levy procrastination may be helpful 22 Feb 2021 Finance minister Rishi Sunak has delayed a decision on whether to impose a 2% sales tax on internet retailers like Amazon. He misses out on some tax revenue in the short term but buys time for joined-up thinking on how to level the playing field for firms that pay property tax.
Hostile buyer lets G4S escape its grasp 22 Feb 2021 Five months after revealing its pursuit of the UK security group, GardaWorld has abandoned the chase. Rival Allied Universal’s 3.8 bln pound bid should capture a solid return while creating a more global firm. The Canadian loser will struggle to trap another transformative deal.
Putin has the cash to ease one driver of protests 22 Feb 2021 Anger at the Kremlin is about falling living standards as well as Alexei Navalny. Fiscal rules have complicated efforts to help the poorest Russians. But higher oil prices make it easier to placate those opposition supporters whose gripes are economic rather than political.
Capital Calls: Petrobras CEO, Kohl’s 22 Feb 2021 Concise views on global finance in the Covid-19 era: Brazilian President Jair Bolsonaro nominates a former general to replace the oil group's market-friendly boss, tanking the shares; and U.S. department store Kohl’s has some unhappy shareholders.
Ant’s loss is small Chinese banks’ loss too 22 Feb 2021 Regulators will require online credit providers to fund 30% of loans made with commercial banks. That’s manageable for Jack Ma’s outfit, though it dims the $300 bln valuation it once enjoyed. But many small banks rely on fintech allies for growth. New rules constrain that too.
Aussie bank deal leaves rarity value on the table 22 Feb 2021 Four lenders dominate Down Under. That ought to mean the second tier has to dig deep for mergers that help them compete. Yet at $1 bln Bank of Queensland is paying just over book value for ME Bank. It’s a reality check for the other targets no matter how digital-savvy they are.
India Insight: Soy sauce flavours global finance 22 Feb 2021 Century-old Kikkoman recently served its signature condiment to Mumbaikars as part of a rollout campaign. This latest overseas expansion evokes its post-war U.S. strategy. Despite rampant protectionism, the Japanese company offers a glimpse of the next wave of foreign investment.
Big Tech’s foes try out “man bites dog” strategy 19 Feb 2021 Some U.S. lawmakers want to let small news outlets collude when dealing with Facebook and Google. The idea of empowering the weak as well as taming the strong has merit. But it won’t help little firms enough to save them, or do much to shift the balance of power.
Europe is now the main front in gig economy war 19 Feb 2021 Britain’s top court ruled that a group of Uber drivers are entitled to worker rights. Spain is also cracking down. It’s a stark contrast to America, where a California ballot win gave the sector hope. Tougher rules mean a longer path to profit – and higher prices for consumers.
Intel fab spinoff might double its value 19 Feb 2021 The $250 bln chipmaker trades at a big discount to both peers that design processors and rivals that produce them. Splitting would help new CEO Pat Gelsinger close the gap. But Intel’s size and worldwide capacity constraints mean a complete separation will take years.
Review: Bill Gates engineers climate risk clarity 19 Feb 2021 In “How to Avoid a Climate Disaster” the Microsoft founder argues states should throw money at climate change research. Technology will indeed be critical in figuring out how to eliminate carbon emissions. But his book’s main quality is to define the challenge in a graspable way.
Capital Calls: Petrobras 19 Feb 2021 Concise views on global finance in the Covid-19 era: Brazil's president becomes Petrobras' activist.
Porsche IPO would be valid twist in VW soap opera 19 Feb 2021 More than a decade ago the sports-car maker’s parent tried to buy Volkswagen but wound up ceding control of the brand instead. VW is now mulling a partial float to fund an electric push. A mooted 100 bln euro value looks set to revive old wrangling over what Porsche is worth.
Danone CEO upsets activist’s Nestlé-fication hopes 19 Feb 2021 Artisan wants the $47 bln yoghurt maker to dump food and water laggards and prioritise higher-margin lines. A focus on medical nutrition echoes the health science push of the Swiss giant, which has outperformed under pressure from Dan Loeb. But boss Emmanuel Faber is in the way.
New Honda CEO seeks fix for mediocrity 19 Feb 2021 R&D boss Toshihiro Mibe is taking the wheel at the $52 bln Japanese carmaker. Current chief Takahiro Hachigo slashed costs and forged an important alliance with GM. But shareholders didn’t benefit much. Without a spark of fresh inspiration from Mibe, margins will underwhelm.
Crown Resorts raises Aussie governance stakes 19 Feb 2021 The $5 bln casino operator just lost one gaming licence and another is now threatened by a new regulatory probe. A board shakeup should help its case, but director candidates are in short supply. The usual suspects fill too many seats: Crown Chair Helen Coonan is a prime example.