U.S. Big Oil can momentarily thump its chest 30 Apr 2021 Exxon and Chevron’s first quarters were helped by rising oil and chemical prices, offsetting weak refining. Free cash flow ballooned thanks to restrained investment. They are about to benefit from abysmal last-year comparisons. It’ll be a sweet spot for oil that may not return.
Review: Planting the seeds of fresh crises 30 Apr 2021 Niall Ferguson’s “Doom” aspires to a political theory of disaster, epidemiological or otherwise. The historian doesn’t really deliver but hints at a catastrophe to come. Disagreements over whether democracy or authority defeated Covid-19 could ferment a terrible conflict.
Capital Calls: Apple, UK SPACs 30 Apr 2021 Concise views on global finance: Apple’s European antitrust problem may start a global trend; UK regulators scramble to join SPAC party.
Nestlé’s vitamin push is $5.8 bln placebo 30 Apr 2021 The Swiss food giant is buying brands such as Solgar from KKR-owned supplement maker Bountiful. The wish to boost immunity during Covid-19 pepped up sales. To make a healthy return, CEO Mark Schneider needs consumers to keep swallowing pills, and the hype that they actually work.
Barclays’ Goldilocks moment faces lurking bears 30 Apr 2021 For the first time under CEO Jes Staley, the UK bank’s three main units all earned a quarterly return on tangible equity over 10%. A looming slowdown in capital markets and UK mortgages, combined with rising costs, means it may not last. That will keep Barclays shares in check.
Rapid grocery delivery splurge will end with purge 30 Apr 2021 The business of bringing alcohol and ice cream to punters within minutes has attracted $8 bln from investors like SoftBank this year. The stage is set for a frantic fight between startups, takeout apps and supermarkets. They will burn much cash in pursuit of uncertain returns.
Twitter can learn to love the flock it has 30 Apr 2021 Jack Dorsey’s social network warned that user growth will slow and costs will rise. The shares fell some 10%. Twitter lacks Facebook’s diversified product range, and Snap’s popularity. What the $52 bln firm does have is an opportunity to better monetize a pretty loyal audience.
Nio and rivals take their race off-road 30 Apr 2021 China’s Tesla is revving R&D spending back up after slamming on the brakes last year. BYD and others are scrambling to do the same. Investing in new ideas is crucial for growth down the road. But it also makes it harder to know when Nio will fit into its $64 bln valuation.
South Korean digital comics sketch animated future 30 Apr 2021 Content giants have lapped up Japanese storytelling, spurring on Korean “webtoon” makers. Kakao Entertainment’s boss reckons the unit might be worth $18 bln in an IPO. Compatriot Naver is eyeing a similar course. The fast-growing, quirky genre could draw up creative valuations.
Jeff Bezos hands successor post-pandemic pivot 29 Apr 2021 Amazon’s 44% jump in quarterly revenue rounds out a year of locked-down consumers and panic buying. The stock is up only 9% this year as the pandemic effect wanes. Still, Bezos’s company is growing in online ads and cloud. Managing the shift will fall to incoming boss Andy Jassy.
U.S. REITs build solid deal with unusual blocks 29 Apr 2021 Realty Income is paying $11 bln for Vereit in an all-stock deal with some financial engineering and a spinoff on the side. That might normally prompt investor confusion and distrust. But better management, some cost savings, and separating office buildings is a good idea.
Goldman diversity double-speak gets investor slap 29 Apr 2021 Half the shareholders at the Wall Street firm’s annual meeting demanded a report on how it discourages staff from taking disputes to court. Almost a third backed a racial equity audit. Like peers, Goldman says it’s doing enough. Opposing these proposals implies it’s out of touch.
Verizon rips off band-aid with moderate punctures 29 Apr 2021 The $234 bln company wants to ditch AOL and Yahoo, and may get less than it paid a few years ago. That’s never a good thing. But in the media world, such value-destroying deals can be worse. This also enables the firm to get a wad of cash and focus on much bigger tasks, like 5G.
BT keeps eye on the ball by giving soccer the boot 29 Apr 2021 The UK telecom group may sell some or all of its sports broadcast unit. Where live matches once helped lure broadband customers, the battleground has switched to super-fast fibre connections. Falling subscribers and dubious profitability make TV sport an unnecessary distraction.
Biden places $4 trln bet on outsmarting the rich 29 Apr 2021 The U.S. president’s education, childcare and infrastructure sprees are supposed to juice economic growth, while being paid for by taxing the wealthy and companies. How well that works depends on whether plutocrats behave as planned. They have a big incentive to act differently.
Capital Calls: Endeavor’s Hollywood ending 29 Apr 2021 Concise views on global finance: The entertainment conglomerate’s IPO flipped the script on opening day.
Viewsroom: Life from the latest Indian lockdown 29 Apr 2021 Images of vast funeral pyres, overcrowded hospitals and empty streets have been emanating from India as the country grapples with surging Covid-19 infection rates. Una Galani surveys the situation on the ground from Mumbai and discusses the government’s response with Rob Cox.
Soccer’s U.S. owners stuck relying on golden goal 29 Apr 2021 The aborted Super League was a way for Manchester United, Liverpool and Arsenal’s American proprietors to control player wages. They now lack a clear alternative for boosting earnings. To sell out profitably, they’ll have to find buyers more focused on glory than the bottom line.
Total is least-bad pick for confused oil investors 29 Apr 2021 First-quarter results show the French group and rivals BP and Royal Dutch Shell rebounding from last year’s woes. Yet BP’s turn to wind and solar may be too sharp and Shell’s too relaxed. For now, Total’s balanced green ambition and fat dividend look more appealing.
Europe’s $36 bln chip runt is coming into its own 29 Apr 2021 Shares in Franco-Italian STMicro have lagged the soaring semiconductor sector. Now CEO Jean-Marc Chery is boosting sales targets thanks to a global shortage. And his rising market share in cars and digital everyday gizmos should help close the valuation gap with bigger rivals.
Indian markets dangerously resist virus resurgence 29 Apr 2021 Investors are looking past oxygen shortages and funeral pyres to a faster vaccine rollout, accelerated digital adoption and strong FX reserves. Resilience in the Nifty 50 also assumes consumption by the rich will carry on and excessively discounts the tragedy’s impact on growth.
Ford gives investors a sense of crisis déjà vu 29 Apr 2021 The $49 bln automaker powered earnings last quarter by turning the global chip shortage to its advantage. It’s also touting ways to become more efficient. The situation evokes a 2008 turnaround effort. Newish CEO Jim Farley’s job is to ensure Ford stays the course this time.
Kweichow Moutai distills a governance discount 29 Apr 2021 The $396 bln Chinese baijiu maker’s bottom line rose just 6.6% in the first quarter, far slower than sales, while rivals boosted profitability. Unusually high tax payments are to blame, as local officials milk Moutai. The deteriorating trust could erode further value.
Apple App Store success has a dark side 28 Apr 2021 A 26% rise in services revenue in the first quarter helped the $2.3 trln firm’s top line grow 54%. But Match, Epic Games and others are testing its lording power. U.S. regulators forced Microsoft to give consumers more choice with products. Apple could face a similar reckoning.
Facebook’s growth puts Trump in his place 28 Apr 2021 Facebook’s ad revenue jumped 46% in the quarter it banned the former U.S. president. Monthly active users increased by 15% and it made more off of them. Other platforms, including one launched by the reality TV star, may emerge. Established social media can mostly blow them off.
Aramco’s mystery sale saga follows familiar plot 28 Apr 2021 The Saudi oil giant is in talks to sell a 1% stake to a “leading global energy company”, Crown Prince Mohammed bin Salman says. As with previous puzzles over international IPO venues, there are plenty of potential candidates. And as with those, it’s possible nothing happens.
Guest view: A qualified opinion on UK audit reform 28 Apr 2021 Corporate collapses like Carillion and Thomas Cook highlight flaws in accounting for capital and dividends, argues Natasha Landell-Mills of Sarasin & Partners. Proposals to restore trust in accounts fall dangerously short. The government should focus on enforcing existing laws.
Endeavor IPO sequel has more hope of Disney magic 28 Apr 2021 Ari Emanuel’s entertainment group is going public after scrapping plans in 2019. At around $10 bln, the indicated valuation would have been reasonable two years ago. Endeavor has simplified its script, casting UFC as its star. It may be a bit closer to minor Magic Kingdom status.
Deutsche salvation lies in traders’ slippery hands 28 Apr 2021 CEO Christian Sewing seems closer than ever to reaching his ambitious 8% return on tangible equity goal. Ironically for a group that wanted to rely less on investment banking, that requires more blowout performances from his bond-trading stars. Investors are rightly sceptical.
Italian IPO to square God’s work with capitalism 28 Apr 2021 Automatic door maker FAAC, worth some 2 bln euros, may float in Milan. The Catholic Church, which inherited the business from the owner, can use the proceeds to fund good deeds. The firm’s rapid growth may also convince investors their bet will be more solid than a parish raffle.