Vaccine halo merits the effort for American pharma 29 Mar 2021 The success of Pfizer, J&J and Moderna in developing Covid-19 jabs and scaling up production has buffed their reputations. The immediate financial gain – about $4 bln of profit for Pfizer this year – may pale beside the benefit from having regulators and lawmakers on their side.
Capital Calls: WFH deals, Suez Canal, NorNickel 29 Mar 2021 Concise views on global finance in the Covid-19 era: Fintech firm Broadridge pays a full price for trading platform; with the waterway clear, all sides will be taking up positions for a legal battle royal; the Russian nickel producer cashes in on high copper prices.
Archegos mess revisits Wall Street weak spots 29 Mar 2021 Bill Hwang’s family office may not have been overleveraged, but rhymes plenty with previous blowups. Some $15 bln easily could have distracted fee-hungry brokers from concentration risk, dangerous derivatives and a past trading ban. It’s exactly why banks need oodles of capital.
Cazoo’s $7 bln deal depends on European car drive 29 Mar 2021 The UK online used-car seller is going public in New York through a blank-cheque merger. A multiple of more than twice projected 2022 sales is lower than U.S. peer Carvana. Still, those numbers require the company to grab a big chunk of a growing market at home and in the EU.
Turkey’s soft capital controls are transitory fix 29 Mar 2021 Subtle curbs that make it harder to sell the lira will slow its fall. They won’t be enough if the central bank’s new boss starts cutting rates under political pressure. President Tayyip Erdogan can impose tougher restrictions but will hurt the economy if he is too heavy-handed.
Singapore dynasty falls into China property trap 29 Mar 2021 A spat between the Kwek family’s City Developments and its struggling mainland partner has gone public. The souring of a $655 mln deal hailed just 11 months ago as a tie-up between old friends serves as a warning of the pitfalls in distressed Chinese property.
WeWork finally dons office-appropriate attire 26 Mar 2021 Merging with a SPAC will give the shared-office lessor $1.3 bln in fresh cash and a $9 bln valuation far below the price tag it flaunted in 2019. The resilience of its revenue is encouraging. But whiffs of the old WeWork remain, like a reliance on aggressive growth assumptions.
ESG wave crashes into Volkswagen’s narrow straits 26 Mar 2021 U.S. eco-investors have pushed ordinary shares in the $153 bln automaker way above equal preference stock after CEO Herbert Diess upgraded battery car plans. Investors’ need for voting rights plus VW’s small free-float may explain why. But the lack of clarity invites a snapback.
Review: “A World Without Email” is a long way off 26 Mar 2021 Tending to electronic communication takes a third of our working day, making us miserable and less productive, Cal Newport argues. Virtual to-do lists are useful hacks to regain control. Yet even if email is defeated, interruption by pervasive digital messages seems here to stay.
Credit Suisse has PAF to redemption over Greensill 26 Mar 2021 Funds linked to the collapsed supply-chain firm may have billions of dollars in bad debt. The bank and its employees are culpable and should share losses with clients. Reviving a post-2008 asset-backed bonus vehicle would be one way for senior staff to shoulder some of the risk.
Allianz leaps back into M&A game in pricey Poland 26 Mar 2021 Europe’s top insurer will buy Aviva’s Polish unit for 2.5 bln euros. After more than a decade of eschewing large deals, CEO Oliver Baete is paying a rich 17 times earnings for scale in a key market. Projected savings make the price tag stack up. It may be a sign of more to come.
Capital Calls: Sports versus the Trump slump 26 Mar 2021 Concise views on global finance in the Covid-19 era: Political news startup Axios may merge with sports site The Athletic.
China delisting drama stings U.S. investors worse 26 Mar 2021 Stocks like $70 bln Baidu have been whomped as Washington pushes to kick out Chinese firms unless Beijing allows audit inspections. That might tempt bosses to exit New York early. Recent lowball bids suggest minority shareholders have more to lose than the companies themselves.
Pinduoduo governance cleanup misses some spots 26 Mar 2021 The $156 bln e-commerce company’s departing founder Colin Huang has given up his supervoting stock. But it’s not clear he’s relinquishing other holds on power. Insiders can exert outsize influence on the board. And Pinduoduo still lacks a finance chief. There’s more work to do.
New Zealand’s diluted punch bowl may tempt others 26 Mar 2021 Prime Minister Jacinda Ardern is combatting a hot housing market by stopping property investors from deducting mortgage interest. This mitigates side effects of low rates and allows the central bank to defer policy tightening. The approach might appeal to governments elsewhere.
Right-wing activists pose challenge to ESG crusade 25 Mar 2021 The SEC may make it easier for investors to demand ballots on topics like climate change and racial justice. That could also let through conservative proposals firms like Intel and Verizon previously swatted away. Companies may just need to get used to the spirit of open debate.
Exxon-Chevron deal could help kill fossil fuels 25 Mar 2021 The creation of “Chexxon” would trigger antitrust watchdogs. But the latter fear higher prices, which would only make green power sources more competitive. Regulators could require they make investments into new infrastructure, too, effectively decreasing oil’s importance.
Deliveroo’s main sustainability doubt is financial 25 Mar 2021 Some fund managers are shunning the food delivery group’s IPO over its treatment of workers. Unlike most ESG laggards, the $11 bln group is loss-making. Concern about labour rights and founder Will Shu’s super-voting stock are secondary to whether it can turn a consistent profit.
Russia has defences against U.S. sabre-rattling 25 Mar 2021 Given the U.S. president reckons his Russian counterpart is a “killer”, new sanctions on Russian government debt are possible. Jumpy prices forced Moscow to cancel a bond auction. But with a trade surplus and low external debt, Kremlin finances will hold up.
Viewsroom: Turkish trouble and emerging markets 25 Mar 2021 President Tayyip Erdogan’s abrupt firing of a third central bank governor forced investors to contemplate whether this might precipitate a run on financial assets in other developing markets, including South Africa. Breakingviews columnists discuss the implications.
Capital Calls: Twitter time-wasting, News Corp 25 Mar 2021 Concise views on global finance in the Covid-19 era: Congressional hearings on Big Tech get ever less productive; meanwhile, the parent of the Wall Street Journal snaps up Investor’s Business Daily.
H&M kicks off Europe’s unfashionable China dilemma 25 Mar 2021 The $35 bln Swedish retailer is under sudden attack over an old statement saying it doesn’t source materials from controversial Xinjiang. Many EU companies want both greater access to the giant market and ESG credibility. Beijing will make it choose which is the bigger priority.
Suez blockage comes a year too late 25 Mar 2021 The Ever Given continues to block the Egyptian canal. Barring progress, shipping firms may soon have to re-route vessels around Africa, adding seven days and extra fuel costs. A year ago, with crude prices tumbling, many did that anyway. With oil dearer, it’s a painful choice.
Turkey’s battered banks face a slow-burn crisis 25 Mar 2021 A plummeting lira creates the risk of a funding squeeze for Garanti BBVA, Akbank, Isbank and others. But they’ve survived past crises without a bank run. The more likely problem for the sector is mounting bad debt, which will drag down returns and capital for years to come.
Deutsche Bank flips equities business on its head 25 Mar 2021 The German lender may be hiring a dozen capital markets experts, less than two years after slashing the team amid mass global layoffs. The equities business has a reputation for being a people-heavy volume game, but Deutsche may have found a way to make small pay, too.
Westpac may find New Zealand hard to leave 25 Mar 2021 Demerging its business across the Tasman Sea would bolster cash and capital for the Aussie bank. The concentrated Kiwi market makes a deal tricky, however, and the unit – potentially worth $8 bln – needs regulatory fixes first. Boss Peter King would do better to keep it.
China’s Xiaomi risks wasting its good luck 25 Mar 2021 The $81 bln smartphone maker grew adjusted quarterly earnings 37%. Suspension of a U.S. ban, plus the suppression of rival Huawei’s smartphone business, helped enormously. It is missing a golden opportunity, however, to achieve a goal of expanding beyond low-margin hardware.
Amazon bank creates more problems than it solves 24 Mar 2021 The FDIC becoming open to deposit insurance for nonbanks can help consumers, which includes Amazon. As the number of traditional firms shrinks, it may aid unbanked Americans. But unless regulators outline a strong set of rules, Amazon becomes an even more dangerous data behemoth.
Murdoch has good reason to ruin publishing deal 24 Mar 2021 News Corp doesn’t like competitor Bertelsmann’s $2 bln deal for Simon & Schuster and has griped publicly about competition. Now UK watchdogs are probing. Book publishing makes up a fifth of its business. With the field shrinking, Murdoch needs to ensure he’s in pole position.
Transatlantic gaming deal may have bigger jackpot 24 Mar 2021 U.S. casino operator Bally’s agreed to buy Britain’s Gamesys for $3 bln. Some aspects of the deal make it look like a reverse takeover. Yet the terms for UK shareholders being asked to cash out seem stingy. Investors hoping for a higher price have a strong argument.