UK trucker shortage tows inflation in its wake 27 Sep 2021 The government is recruiting foreign drivers, suspending competition rules and may use the army to ease a fuel crunch which triggered panic buying. That should limit the hit to Britain’s road-dependent economy. But sharply higher wages will accelerate annual inflation towards 4%.
EQT $3.9 bln pet bid typifies PE growth obsession 27 Sep 2021 The Swedish buyout firm topped Hellman & Friedman’s offer for online dog-food seller Zooplus. An absence of debt funding and limited scope for cost cuts mean the numbers only work if sales grow at a greyhound-worthy 15%. A possible counteroffer would stretch things even further.
Breakdown: Beware Aussie net-zero greenwashing 27 Sep 2021 Prime Minister Scott Morrison’s government may soon unveil a long-overdue carbon-reduction plan. Early signals play loose with statistics and flag a “gas-fired” pandemic recovery. Absent a detailed path to slash emissions across the economy, it could just be a giant PR stunt.
Huawei deal offers illusion of U.S.-China progress 27 Sep 2021 Washington has walked away from an extradition fight with the telecom giant’s Meng Wanzhou, one in a series of concessions. President Xi Jinping has given nothing substantial in exchange, and is doubling down on aggressive economic policies. Any relief will be short-lived.
Close German vote dilutes economic reform hopes 26 Sep 2021 Socialist Olaf Scholz and his centre-right rival, Armin Laschet, will each woo the fiscally conservative Free Democrats in a bid to form a government. The tight election result hands the FDP leverage that may limit scope for big green investments and more supple EU budget rules.
Illumina thumbs its nose at slowcoach trustbusters 24 Sep 2021 The gene sequencing firm closed a $7 bln deal without EU approval. Illumina is confident in approval, or at worst, forced divestment at a premium. Illumina may be right that antitrust moves slower than technology, but its insouciance isn’t necessarily great for shareholders.
Guest view: Offsets reach moment of maturity 24 Sep 2021 There’s no guarantee the world will keep global warming to 1.5 degrees Celsius. As such, emissions cuts to tackle areas that can’t or won’t decarbonise will become key. Paris Agreement overseer Christiana Figueres argues that offsets deserve a chance to overcome their flaws.
Review: Hitting the brakes on tech’s runaway train 24 Sep 2021 Giants like Facebook, Google owner Alphabet and Amazon are reaping outsized benefits from fast and cheap innovation, Azeem Azhar argues in “Exponential”. Legislation and lawsuits show society is fighting back. But it will take more radical ideas to loosen their grip.
Capital Calls: OCC, China crypto ban 23 Sep 2021 Concise views on global finance: Biden’s pick for the U.S. bank regulator would be a square peg in a round hole; Beijing regulators declared all cryptocurrency activity to be illegal underlining the cons and a pro of the digital assets.
The smarter way to avoid energy crises: use less 24 Sep 2021 Soaring power prices have prompted calls to build more wind turbines, hike gas storage, or revive nuclear energy. But a big push to make buildings, industry and transport more efficient could help halve global demand by 2050. It’s something governments can act on straight away.
Dutch lingerie sale looks surprisingly chaste 24 Sep 2021 Sexy-underwear seller Hunkemoller is on the block after a post-pandemic rebound. Owner Carlyle’s digital push is helping it win market share. Yet investors seem more excited by trendy sportswear than saucy lingerie. Capping the price at 1 bln euros looks suitably modest.
New light emerges from China’s shadowy shoppers 24 Sep 2021 Cross-border traders known as daigou have been hurt by the pandemic, curbing sales of everything from A2 milk powder to Gucci handbags. Shrinking this once-thriving grey market will come at a cost, as evidenced by one Aussie company. Lower risks and clearer pictures are worth it.
Pan-Asia insurers helpfully crowd onto bourses 24 Sep 2021 Just days after Prudential tapped Hong Kong for fresh funds, Richard Li’s FWD filed for a New York IPO valuing it at up to $15 bln. The upstart is smaller than its $50 bln rival or $137 bln AIA but at last the three offer a way of comparing performance in the fast-growing region.
Turkey goes deeper into parallel monetary universe 23 Sep 2021 Ankara cut its main policy rate to 18% from 19%, kowtowing to President Erdogan just as other central banks take the opposite tack. A weaker lira and soaring energy bills add to the economy's inflation pains. With two years to another election, there’s little respite in sight.
Wildfire insurance heading same way as flood cover 23 Sep 2021 Hurricanes are growing stronger and wildfires bigger. That means larger, less predictable losses for insurers. Canceled policies and higher premiums tempt governments to intervene. As federal U.S. flood insurance shows, that’s a recipe for underpriced coverage and delayed action.
Transitory inflation is a fig leaf that’s slipping 23 Sep 2021 The Fed, ECB and Bank of England reckon strong price pressures are a temporary phenomenon. But new forecasts and comments suggest inflation overshoots may persist next year, and last even longer in America. That’s hardly short-lived. Pretending otherwise will lead to problems.
Three-way sports bet fight may end in a stalemate 23 Sep 2021 The battle for control of Entain hinges on the UK bookie’s U.S. joint venture. Current partner MGM is unlikely to pay for control of the unit, probably worth $13 bln. But suitor DraftKings may need the cash to help fund its $22 bln bid. The odds of a successful deal look long.
Capital Calls: Wall Street B-team arrives in D.C. 23 Sep 2021 Concise views on global finance: U.S. senators sent SPAC managers letters questioning incentives in blank-check vehicles.
Credit markets will withstand Evergrande shocks 23 Sep 2021 The global corporate bond market has barely flinched at the crisis at the Chinese property developer, which is a big issuer of junk debt. Loose monetary policy, healthy company balance sheets, and a hunt for yield explain the nonchalance. This will encourage more risk taking.
Elliott’s UK power play rests on blue-sky thinking 23 Sep 2021 The activist has built a stake in SSE and may seek a spinoff of its renewable generation arm. That could hike the $23 bln utility’s value. But it requires hefty assumptions about wind growth, and the state’s readiness to allow tinkering of a stable model amid an energy crisis.
Viewsroom: Evergrande is a mostly domestic crisis 23 Sep 2021 Global investors have woken up to the potential financial risks that the heavily indebted Chinese property developer poses. Breakingviews Asia columnists explain, though, that even in a worst-case scenario its effects beyond the country’s borders should be limited.
Fiat offspring are racy hedge against anti-rich Xi 23 Sep 2021 BMW, Mercedes and others would be hit hard if China’s “common prosperity” drive extends to premium vehicles. Ferrari can power through, while Stellantis’ low sales in the world’s top car market would offer investors cover, if rivals don’t offload vehicles on the cheap elsewhere.
Wanted: Exxon-like activism at top Aussie polluter 23 Sep 2021 AGL’s investors have warned the $2.6 bln energy giant to up its game on climate change. Poor strategy, including a bungled coal spinoff, has halved its market value in 2021. An activist-led shakeup of its underwhelming board, as at the U.S. driller, would bring needed change.
IPO investors get the Toast without the jam 22 Sep 2021 The $20 bln restaurant booking group priced its offering above the target range amid strong demand for market debutants. Investors are shrugging off wider concerns including a possible economic slowdown in China. Yet even if the stocks pop, IPOs are trailing the broader market.
Fed plan for U.S. default would be step into abyss 22 Sep 2021 Lawmakers are again arguing over D.C.'s credit limit. If they let debt go unpaid, the Fed would have to step in. Options proposed in the past include lending against delinquent Treasuries or even buying them. Funding a bankrupt government would break risky new political ground.
Capital Calls: Zoom glitches, Pret A Manger pivots 21 Sep 2021 Concise views on global finance: The video-conference company’s $13.6 bln deal with call-center software firm Five9 could slip away, and that’s no bad thing; the sandwich-to-coffee chain’s 100-million-pound post-pandemic overhaul is a punt on an untested formula.
Italy will be first to light up Europe’s weed biz 22 Sep 2021 A nationwide plebiscite will seek to legalise cannabis. Taxing recreational dope may add some 6 bln euros to strained state coffers, and production for medical and other uses will also rise. As the U.S. experience shows, if Rome crosses the sticky line, neighbours will follow.
Rishi Sunak pays if BoE inflation bet goes awry 22 Sep 2021 Surging prices mean the UK finance minister has to pay more interest on outstanding debt. Blame Britain’s love of bonds tied to inflation. The bill will be even bigger if price pressures are more stubborn than the Bank of England expects, forcing hasty monetary policy tightening.
DraftKings UK bookie punt is risky multiplier bet 21 Sep 2021 The U.S. fantasy-football specialist may buy Entain in a $22 billion cash-and-stock deal. Together, they’d be a giant in the U.S. sports-betting market. But the price tag looks steep, and the target’s joint-venture partner, MGM, could make life difficult after any tie-up.
Time for sports data’s also-ran to Be Like Mike 21 Sep 2021 The $7.6 bln Sportradar’s shares are below last week’s IPO price, and its valuation multiple lags rival Genius Sports. On the plus side, famously competitive basketball icon Michael Jordan now advises the board. Maybe he can help it see that the businesses aren’t that different.