China IPO crackdown will cast chill over Caymans 7 Jul 2021 A Caribbean islands domicile has enabled $60 bln Didi and others to easily list in New York. But new rules from the powerful state cabinet will tighten oversight on overseas floats. Companies that have long relied on offshore structures to skirt local rules may find it harder.
Office space slump will serve Hong Kong developers 7 Jul 2021 Record vacancies are depressing rents even as the city’s property giants lob $7 bln bids for a prime plot that will only add supply. As businesses weigh the merits of proximity to Beijing, the world’s priciest office market will gain from offering tenants some pricing power.
Nextdoor may struggle to keep up with Joneses 6 Jul 2021 The neighborhood social network is merging with a SPAC in a $4.3 bln deal. Sure, it’s useful to communities posting about yard sales and missing pets. But it’s not profitable and its model is easily replicable - by Facebook. Nextdoor may be living beyond its means.
Oil nudging the $100 mark is not a terrible thing 6 Jul 2021 Crude prices have topped $75 a barrel as the recovery drives demand and a lack of investment hits supply. Higher prices should give majors like BP and Exxon a cash windfall to aid their green transitions. They will also drive big consumers to think about energy alternatives.
Wall Street ignores China meddling at own peril 6 Jul 2021 Didi’s shares fell by as much as 25% after app stores in the People’s Republic had to delete it, following Beijing’s crackdown last week. Investors may continue to be overly optimistic. But now the risk is that China and the United States try to one-up each other on restrictions.
Fortress’ vows to Morrisons look flimsy and finite 6 Jul 2021 A consortium led by the private equity group secured the British grocer’s support for an $8.7 bln takeover by pledging to treat suppliers well and not sell real estate. Yet its promises are not legally binding and expire in a year. The target’s board should have pushed for more.
Wizz Air CEO’s 100 mln pound bonus is aptly remote 6 Jul 2021 Jozsef Varadi’s payday could be even bigger than Michael O’Leary’s at rival Ryanair if his airline’s shares nearly treble. Linking such a big reward to stock performance looks crude but the target implies a fourfold revenue jump. Even Varadi can’t sustain that steep a climb.
Capital Calls: JEDI’s demise, Toyota’s weird world 6 Jul 2021 Concise views on global finance: The cancelation of a $10 bln U.S. government cloud contract shows negotiating big projects is sometimes a matter of guesswork. Meanwhile, the auto firm that pioneered just-in-time manufacturing is cashing in on a chip stockpile and red-hot market.
OPEC spats are less important than its sweet spot 6 Jul 2021 The UAE stymied a deal to unwind oil output cuts. That will further strain relations with Saudi Arabia, but Riyadh will probably find a compromise. Meanwhile, the cartel and its allies have unusual scope to keep crude prices high without losing market share to U.S. producers.
Suning bailout might model China Evergrande rescue 6 Jul 2021 A public-private consortium including Alibaba has thrown the debt-laden Chinese retailer a $1.4 bln lifeline. There are now lots of cooks in Suning’s kitchen, complicating a business turnaround. But it might be a trial run for restructuring its troubled ally Evergrande.
Sumitomo looks past cracks in India’s credit scene 6 Jul 2021 The Japanese lender is paying Singapore’s Temasek $2 bln for control of non-bank Fullerton. Boss Jun Ohta’s latest deal takes SMFG into a complex, pandemic-ravaged market that wounded its target. The upside: He’s paying a relatively low price for a shot at high returns.
China uses Didi as data law test dummy 6 Jul 2021 Cybersecurity watchdogs are revamping regulations and readying new ones as they widen their crackdown. The $75 bln ride-hailing group’s data trove and foreign backers mean it's a good candidate to make an example of. Investors may hope for more legal clarity; they might not get it.
Green goals will milk more Kiwi-like finance fixes 6 Jul 2021 New Zealand needs 13% fewer cows to help hit emissions targets. That lends urgency to dairy giant Fonterra’s plan to restructure its cooperative as farms grapple with environmental crises. Suppliers and their balance sheets will be a key battle front in the war on climate change.
Capital Calls: Glencore chair, Chinese e-commerce 5 Jul 2021 Concise views on global finance: The commodity giant picks a new chair familiar with its stamping grounds; Beijing cranks up the pressure on companies over data abuses.
How much is Wise worth? 5 Jul 2021 The money-changing app is listing in London without setting a price. Its worth depends largely on how much more foreign-exchange business CEO Kristo Käärmann can win from banks. A Breakingviews calculator shows Wise is due a roughly 20% upgrade from last year’s $5 bln price tag.
Wise’s FX land grab merits $6 bln valuation 5 Jul 2021 The money-changing app is listing in London without setting a price. Its worth depends largely on how much more foreign-exchange business CEO Kristo Käärmann can win from banks. A Breakingviews calculator shows Wise is due a roughly 20% upgrade from last year’s $5 bln price tag.
Morrisons feeding frenzy raises multiple dilemmas 5 Jul 2021 Apollo may become the third bidder for the UK grocer. Investors are hoping for more than the $8.7 bln agreed offer by Fortress. Rivals will have to pay up while potentially agreeing to tricky conditions. If the deal turns hostile the board – and shareholders – will be in a bind.
ECB’s risky loan crusade has limits 5 Jul 2021 Top European watchdog Andrea Enria is worried about banks’ exposure to highly indebted buyouts. He’s right to focus on a fast-growing market with weak investor protections. But clamping down risks further undermining sickly lenders and may only push the problem elsewhere.
Sydney airport bid needs high-flying guesstimates 5 Jul 2021 Shares took off after infrastructure funds offered $17 bln for Australia’s top aviation hub just after the hermit country halved its arrivals quota. The 42% premium is still below pre-pandemic prices. Even if travel resumes, the opportunistic bid rests on blue-sky thinking.
India’s e-commerce rejig looks too protectionist 5 Jul 2021 A ban on discounted flash sales and other proposed rules shield offline sellers and squeeze Amazon and Walmart, but excessive compliance requirements will make it hard for small businesses too. It’s an ill-timed setback for one of the country’s most exciting growth stories.
China puts New York IPO fine-print risk in bold 5 Jul 2021 Chinese regulators have opened investigations into two more companies listed in the city after hammering ride-sharing app Didi just days after it raised $4.4 bln there. Investors that bought into these deals may blame Beijing or bankers, but they had ample, if indirect, warning.
Fortress bid shunts Morrisons into premium aisle 3 Jul 2021 The British grocer agreed to an $8.7 bln takeover led by the SoftBank-owned investor. It’s higher than a recent approach from CD&R, and prospective returns look lower. Add in employee-friendly conditions accepted by the buyer, and private equity rivals will find it hard to beat.
Exxon activist’s ETF structure neuters lofty goals 2 Jul 2021 Tiny fund Engine No. 1 beat mighty Exxon in a proxy fight. Its new ETF offers low fees and promises to make the world a better place. But conflicts may preclude the most aggressive activism. Collegial methods may be more effective at collecting assets than changing the world.
Aston Martin needs a James Bond-style escape 2 Jul 2021 Shares in 007’s carmaker have risen over 70% since its last rescue under billionaire Lawrence Stroll. Its $3 bln valuation defies logic given high debt and scant profit. Investors may hope for a takeover, but likely buyers like Daimler or China’s Geely would drive a hard bargain.
Chancellor: Paying the piper for pandemic recovery 2 Jul 2021 The war on Covid-19 proved remarkably expensive. The U.S. federal deficit ran to $3.4 trillion last year. As the crisis eases, policymakers are thinking about how to foot the bill. Past wars have brought forth new taxes. Consider some fresh sources for raising government revenue.
Pricey Finland pulp deal offers paper-thin returns 2 Jul 2021 Shares in 5 bln euro Finnish engineer Valmet fell after it agreed an all-share takeover of valve maker Neles. Although both operate in paper, the modest cost savings on offer suggest CEO Pasi Laine may struggle to generate decent returns. Investors are right to be sceptical.
Capital Calls: U.S. jobs, Didi probe, Pharma LBO 2 Jul 2021 Concise views on global finance: The U.S. added 850,000 jobs in June but the recovery isn't happening everywhere. Meanwhile, Didi is hit with an investigation by a Chinese regulator days after its U.S. listing, and a pharma buyout by EQT and Goldman is a game of hot potato.
Robinhood has too many arrows pointed its way 2 Jul 2021 The trading app filed to go public and may seek a $40 bln valuation. Based on its growth, that isn’t impossible. But it is too exposed to speculative trading and some government probes look serious. It could only fetch such spoils in the vulnerable market it helped create.
Chip crisis short-circuits Kickstarter economy 2 Jul 2021 Cheap Chinese components enabled quirky upstarts making plant synthesisers and the like to thrive on crowdfunding sites. But the semiconductor shortage has pushed them to the back of the line as heavyweights like Apple muscle in. Many won’t survive, to gadget geeks’ grief.
TPG, waiting out first IPO boom, may ride another 1 Jul 2021 The private equity firm David Bonderman and Jim Coulter founded watched peers like KKR and Apollo ride into public ownership and extreme riches with the last market wave. Waiting, and watching rivals deal with growing pains and generational succession may prove to be a good call.