Nio share sale copies one of Tesla’s better tricks 8 Sep 2021 The electric-car maker plans to boost its balance sheet by raising $2 bln, despite rising sales and a chunky cash pile. Like Elon Musk last year, CEO William Li is raising funds while he can, not when he needs to. That’s wise: Rich valuations make both vulnerable to setbacks.
SoftBank buyback hopes could hit crossed lines 8 Sep 2021 Shares in Masayoshi Son’s conglomerate jumped some 20% after it swapped some US T-Mobile shares for a stake in the latter’s parent, Deutsche Telekom. It also bagged $2 bln-plus in cash. Investors are dialing up a big stock repurchase but may have the wrong number in mind.
Morgan Stanley boldly sidesteps record India IPO 8 Sep 2021 The Wall Street firm didn’t pitch for the $14 bln debut of state-owned insurer LIC. Sure, fees are painfully low. But the deal brings bragging rights and government brownie points and looks more straightforward than, say, the Saudi Aramco sale. Yet there’s logic to the move.
El Salvador takes a risky punt on crypto 7 Sep 2021 Bitcoin is now an official currency in the Central American republic, alongside the U.S. dollar. There are potential benefits for a country that is so dependent on remittances from abroad, but President Nayib Bukele’s pioneering move has way too many downsides.
Crypto poses systemic risks that need swift remedy 7 Sep 2021 Digital currency trading venues are a $2 trln industry while some coins, like Tether, are backed by fiat currencies. If money markets freeze up, their positions are so large that they could have ripple effects. Watchdogs are classically behind in reining in the market.
Capital Calls: UK interventions, Post-virus reset 7 Sep 2021 Concise views on global finance: U.S. bidder TransDigm’s withdrawal from the $8.7 bln race for Meggitt removes a tricky decision for the government; Boris Johnson’s new proposals will address social care but not generational wealth divides.
The Exchange: Adam Tooze on the pandemic 7 Sep 2021 2020 was one of the most seismic years in world history. The Columbia University professor’s new book, “Shutdown”, recaps the events and offers some conclusions about where Covid-19 has left the planet. Tooze tells Peter Thal Larsen why it might be a dry run for future crises.
D.Telekom finds good route to poor destination 7 Sep 2021 The 85 bln euro German carrier is upping its stake in T-Mobile US by 5% to near-majority ownership. Doing so via a share swap with Japan’s SoftBank is better than handing over $8 bln in cash. Yet it exacerbates the problem of DT investors valuing U.S. assets at a discount.
Electric vehicles will short-circuit car dealers 7 Sep 2021 Booming auto sales have buoyed shares in middlemen like $7.6 bln U.S.-based AutoNation and $357 mln UK-listed Pendragon. Battery rides need fewer parts and rely on over-the-air software updates. That’s great for carmakers but means dealerships risk becoming glorified garages.
Xi muffles Chinese consumer boom 7 Sep 2021 Trade partners hoped Chinese shoppers would mimic free-spending Americans. Yet the president is reining in consumption he doesn’t approve of while bolstering exports. With savings stuck at an absurd 44% of national income, more thriftiness could worsen global imbalances.
Beijing puts misplaced stock in new exchange 7 Sep 2021 President Xi is launching a bourse in China’s capital to fund small firms. It could bolster the fortunes of its parent, the New Third Board, which targets the same companies. But diverting liquidity from Shanghai and Shenzhen into a new pool will leave businesses no better off.
Guinea coup is win for Australia and Brazil 6 Sep 2021 Soldiers have deposed the West African nation’s president, Alpha Condé. Besides disruption to bauxite exports, the upheaval may upend development of the Simandou mine’s 8.6 billion tonnes of iron ore deposits, capable of adding 10% to global output. Rival diggers will be smiling.
Fund investor’s IPO depends on Goldman connections 6 Sep 2021 Petershill, which buys stakes in buyout and hedge fund managers, is planning a $5 bln listing. It’s a punt on the enduring boom in alternative assets. It also depends on whether the Wall Street firm, which manages the portfolio, keeps finding attractive new firms to invest in.
Capital Calls: JD.com shakeup 6 Sep 2021 Concise views on global finance: New appointments at the $126 billion Chinese e-commerce giant hint at succession planning.
VW-style tech hype calls for defensive driving 6 Sep 2021 CEO Herbert Diess says the “gamechanger” for his industry will be software and autonomous cars, with the former a $1.4 trln global market by 2030. Such a Panglossian take relies on fleets of robo-taxis and driver-downloads galore, plus manoeuvring past tech leaders like Alphabet.
UAE oil IPO looks safer than Saudi for foreigners 6 Sep 2021 Two years after largely spurning Aramco’s listing, international investors have another chance to buy into a Gulf national oil group. At a potential $11 bln, ADNOC’s drilling arm is smaller and in a less tricky locale. A successful sale would confirm the UAE’s overseas appeal.
China adds shades of grey to golden shares 6 Sep 2021 Beijing’s mooted investment into ride-hailing group Didi has templates in ByteDance and electric-vehicle maker Nio. But as a listed company not in financial distress, any official intervention to claim more rights over the data-rich giant is likely to feature on the darker side.
India Insight: Elbows out on world’s factory floor 6 Sep 2021 New Delhi is offering juicy payouts to companies that build large manufacturing capacity. Backing select winners from Ola to Samsung may reduce dependence on China and insert India into supply chains. It’s a high-risk, high-reward gambit after years of industrial false starts.
Allbirds IPO peddles altruism with ESG feathers 3 Sep 2021 If the ethical shoemaker’s “sustainable public equity offering” is a hit, others will copy it. That would make finance a greater force for good. But Allbirds itself is easy to copy, too, and its governance is second rate. Above $2 bln, investors help the world at their own risk.
Review: Covid-19 and the crises yet to come 3 Sep 2021 2020 was one of the most seismic years in world history. Adam Tooze’s “Shutdown” recaps how the pandemic exposed the fragility of an interconnected world, while uncovering some pockets of strength. It’s a troubling test run for future challenges, most notably from climate change.
Capital Calls: U.S. jobs, $7 bln tax settlement 3 Sep 2021 Concise views on global finance: Slow U.S. job growth signals caution for the Fed; meanwhile, a giant deal between hedge fund executives and the IRS gives legs to President Biden's tax plans.
Japan adds PM’s scalp to Olympic invoice 3 Sep 2021 Prime Minister Yoshihide Suga is stepping down. His failure to contain Covid-19 and his insistence on holding the $15 bln Tokyo Games despite popular opposition doomed him. His exit may dampen other governments’ enthusiasm for the event and puts economic reform momentum at risk.
Rio Tinto can afford to go halves in Mongolia 3 Sep 2021 The miner’s $14 bln Oyu Tolgoi scheme is over budget and debt-laden, depriving its government partner of a return. Restructuring so only 50% of the project’s free cash pays down debt could restore dividends and win Mongolia over. High copper prices give Rio scope to act.
Meggitt arm-wrestle is test for UK interventionism 3 Sep 2021 TransDigm’s 7 bln pound approach for the aerospace engineer is higher than rival Parker Hannifin’s but uses way more debt. PM Boris Johnson has been active in probing M&A that could affect jobs or national security. But intervening on leverage grounds would be a new departure.
China’s tech sector gets dragged off hamster wheel 3 Sep 2021 Companies like ByteDance and Meituan are cutting back work hours and improving benefits and labour protection, as Beijing pushes to reduce overwork and promote family life. Some companies may take short-term hits to profitability, but it could help improve focus and productivity.
Xi’s common prosperity becomes financial black box 3 Sep 2021 Alibaba and Tencent have each pledged $16 bln to the Chinese president's cause. Investors, though, are in the dark on how these huge sums will be deployed. Along with higher taxes, regulatory fines, new laws on data and more, the cost of doing business is fundamentally changing.
Cardano joins crypto’s creative destruction loop 2 Sep 2021 The third-biggest virtual currency has doubled in a month, gaining on larger rivals bitcoin and ether. It’s more environmentally friendly, though less useful for the time being. But upstarts like Cardano may help crypto deliver riches, even if today’s investors lose their shirts.
Baxter’s $10.5 bln deal is preventative medicine 2 Sep 2021 Acquiring Hill-Rom and its “connected” hospital beds should boost the medical products maker’s growth. If it doesn’t, the return on investment could be a sickly 6%. A bigger benefit to Baxter may be building up defenses against powerful hospital chains and pressure to cut prices.
Chancellor: Beware financial repression’s return 2 Sep 2021 The debt binge by governments and corporations following the financial crisis and Covid epidemic requires an economic and political preference for permanently low interest rates. It worked, to a degree after World War Two, but this time will be different, and more painful.
Viewsroom: Scoring Ronaldo’s return to Man Utd 2 Sep 2021 Shareholders cheered the prolific Portuguese striker’s surprise decision to rejoin his former club in England. His three-year stint at Juventus, though, was hardly a clear financial victory. Plus: An $80 bln IPO valuation for electric-truck maker Rivian would be too racy.