Jeff Ubben’s soft touch could help hardened Exxon 5 Feb 2021 The activist behind Inclusive Capital may join the $204 billion oil giant’s board. He helped usher Ballmer out of Microsoft and encouraged an aging Adobe to transform. With vocal and quiet agitators at Exxon, shareholders need a diplomat. Ubben’s experience could prove useful.
Review: “Empireland” puts modern Britain on couch 5 Feb 2021 From curries to its health service, Sathnam Sanghera shows how today’s UK is entwined with its imperial past. Yet its inhabitants have, at best, a lopsided, jingoistic grasp. Without education and a proper reckoning, this skewed identity will spawn mistakes beyond Brexit.
Corona Capital: Peloton, Star SPAC, Italian bank 5 Feb 2021 Concise views on the pandemic’s corporate and financial fallout: Peloton needs to keep pedaling faster to keep up its subscriber pace; baseball’s Alex Rodriguez is jumping in the special purpose acquisition company game; and Intesa Sanpaolo makes good on M&A.
Enel will be hard to dislodge from green perch 5 Feb 2021 The Italian utility has become one of the world’s top renewable energy players and achieved stellar returns under CEO Francesco Starace. A booming green market and a big project pipeline mean its lead will outlast his tenure. Oil majors entering the market will trail behind.
Lazard bucks Aussie investment banking trend 5 Feb 2021 The $5 bln advisory shop is scaling back as financiers from UBS and elsewhere decamp to startups such as Barrenjoey and Jarden. Boss Ken Jacobs has struggled to gain traction Down Under. With an M&A boom potentially on the horizon, though, it’s an odd time to shrink.
Hong Kong retail mania one-ups U.S. short squeeze 5 Feb 2021 Kuaishou shares nearly tripled on their $5.4 bln debut. One in four working-age Hong Kongers bid for a stake in the Chinese video app, putting up $162 bln. Dubious rallies without organised campaigns like GameStop’s provide stronger evidence of a frenzy getting out of hand.
Japan’s largesse cuts big banks much-needed slack 5 Feb 2021 Lower credit costs helped Mitsubishi UFJ and Mizuho post better than expected earnings. Thank government stimulus, not least for slowing bankruptcies. With the central bank able to offer just token help, it’s the only relief on hand for the country’s long-suffering lenders.
Small-stock mania calls for big-picture thinking 4 Feb 2021 Treasury Secretary Janet Yellen and other market sheriffs are convening to discuss the impact of the GameStop saga. There may be a case for throwing sand in the gears of retail investing, to offset fee-free trading and gamification. But the less regulators intervene the better.
Cash handouts are Biden rescue plan’s weak link 4 Feb 2021 The Democratic president’s proposal to send $1,400 to millions of Americans is a big sticking point to a deal with Republicans. Compromising on who qualifies might help clinch an accord. Being pickier about eligibility will also prevent the wealth gap from growing even wider.
Branson splices cash and hype into 23andMe 4 Feb 2021 The consumer genetics company is combining with the British billionaire’s SPAC in a $3.5 bln deal. Revenue from testing is shrinking, but all that personal data could be valuable. While 23andMe’s valuation looks high, the $1 bln in cash should buy some time to grow into it.
Stellantis boss Tavares faces triple challenge 4 Feb 2021 The new Italo-French carmaker trades at a discount to peers. Carlos Tavares’ cost-cutting record offers investors some comfort he can get 5 billion euros of annual savings. To go beyond that he’ll need to figure out China, e-vehicles and revive struggling brands like Alfa Romeo.
UK grocer’s $10 bln LBO just about fits in trolley 4 Feb 2021 The Issa brothers and TDR will put in only $1 bln to buy Asda. The deal makes canny use of generous debt and property markets. Borrowing, while high, looks manageable so long as the gas pump tycoons can manage the triple threat of discounters, Amazon and Brexit.
BoE preps negative rate gun it doesn’t want to use 4 Feb 2021 Bank of England boss Andrew Bailey told lenders to be ready to cope with sub-zero interest rates at any point from six months’ time. The weapon will be a handy addition to his arsenal. Covid-19 variants or post-Brexit trade frictions may yet derail the growth rebound he expects.
Viewsroom: Bezos takes step back, Draghi steps up 4 Feb 2021 Amazon founder Jeff Bezos is handing the baton to Andy Jassy so he can spend more time with his rockets, a move that’s not always smooth sailing, Jennifer Saba tells Rob Cox. Meantime Mr. Whatever It Takes, Mario Draghi, is summoned to save Italy and Europe’s Hamiltonian moment.
Kaz Minerals minorities should quit while ahead 4 Feb 2021 The copper miner’s two biggest investors have increased their takeover bid to 3.7 bln pounds. The new offer is still not exactly a knockout, but Kaz Minerals warrants a discount given much of its value is tied up in one risky project. Minorities should take what’s on the table.
Corona Capital: McKinsey/opioids, Bumble IPO 4 Feb 2021 Concise views on the pandemic’s corporate and financial fallout: Consulting firm McKinsey settles over its role in the U.S. opioids scandal; and dating site Bumble boss Whitney Wolfe Herd looks smart to be holding back in the company’s initial public offering.
Deutsche’s trim investment bank is model for peers 4 Feb 2021 CEO Christian Sewing’s 2019 decision to scrap equities trading, while shrinking costs and capital, hasn’t undermined the remaining wholesale business. The lender’s fixed-income units may even be gaining market share. HSBC, Credit Suisse and others needn’t fear a radical overhaul.
Shell’s strength jars with sedate green strategy 4 Feb 2021 The $140 bln oil giant earned $4.8 bln last year as rivals made losses. Next week’s strategic overhaul is unlikely to involve big cuts in crude output or BP-style wind power targets. The cautious approach runs counter to its green-leader image – and the prevailing investor mood.
Cellnex reloads for phone mast M&A shoot-out 4 Feb 2021 The acquisitive Spanish telecoms tower firm is asking investors for another 7 bln euros. That’s more than it needs for its latest 5.2 bln euro purchase. CEO Tobias Martinez will have spare ammunition to fight off heavyweight invaders like American Tower and Britain’s Vodafone.
It’s time HSBC’s big bosses followed the money 4 Feb 2021 The $108 bln bank may relocate the co-heads of its investment bank to Asia. There are good excuses for many financial services giants to avoid putting global chiefs in Hong Kong or Singapore. Given HSBC’s dependency on the region, however, it’s a wonder it has taken so long.
China property credit crisis drags in Ping An Life 4 Feb 2021 China Fortune Land Development's $814 mln of overdue loans have local officials warning its collapse could create systemic risk. Over 200 financial institutions are involved. Beijing might let CFLD serve as a warning, unless the life insurance giant steps in to save its stake.
Amazon exposes flip side of tech’s governance ills 3 Feb 2021 Jeff Bezos built a $1.7 trln e-commerce firm without the dual-class shares or majority stakes that entrench founders at Alphabet and Facebook. So as he drops his CEO role, his remaining executive duties matter a lot. Microsoft offers some lessons that Amazon seems to have heeded.
Rupert Murdoch’s ESG flaws hurt more than ever 3 Feb 2021 Despite efforts to pare down and improve disclosure, $12 bln News Corp trades at a curiously deep discount, based on Breakingviews calculations. Online real estate and Dow Jones may be underappreciated. The media mogul’s bad governance and newspaper fetish also get in the way.
Truck spinoff can shift Daimler into higher gear 3 Feb 2021 The German automaker plans to list a majority stake in its truck and bus unit in Frankfurt. On a similar multiple as rivals Volvo and Volkswagen-owned Traton, it could be worth 20 bln euros. Consolidation in the sector gives Daimler an extra reason to have its own M&A currency.
Regulatory jujitsu turns CBD into $7 bln deal 3 Feb 2021 It was a long slog for GW Pharmaceuticals to win official approval for an epilepsy drug derived from cannabis. This difficulty is now a moat, and has attracted a buyer willing to pay a 50% premium. Rivals will have to jump the same regulation hoops to earn a similar valuation.
Outer space may be best place for SPAC craze 3 Feb 2021 Rocket-making startup Astra is launching into public markets at a $2.1 bln valuation through a blank check company. So-called SPACs are a frothy frontier, but they’re well suited to businesses that rely on long-term future projections. A bet on the space industry fits the bill.
Spotify has bigger issues than slower growth 3 Feb 2021 Shares in the $60 bln Swedish music-streaming group fell after it warned a pandemic-inspired boost to subscribers and revenue may not last. More worrying for CEO Daniel Ek is that costs are still growing roughly as fast as sales. That’s out of tune with a puffed-up equity value.
GSK’s breakup fix exposes lingering ailments 3 Feb 2021 The $89 bln health group is pressing on with a plan to spin off its consumer drugs unit. But its shares are depressed by slow growth and competition in the core pharma division, requiring risky investment and M&A. A dividend chop at least gives CEO Emma Walmsley some elbow room.
Corona Capital: Davos relocation, Kraft 3 Feb 2021 Concise views on the pandemic’s corporate and financial fallout: Davos plans its annual meeting in Singapore; Kraft ditches Mr. Peanut.
Draghi comes to rescue of EU’s Hamiltonian moment 3 Feb 2021 Italy’s president is to pick the ex-ECB boss as the next prime minister. The implications go well beyond Rome. Aside from resolving a mid-pandemic political crisis, Mario Draghi’s credibility and skills can help ensure that 209 bln euros of mutualised EU funds are spent wisely.