Predictions 2022 7 Jan 2022 The extraordinary actions required to make epochal shifts, like eradicating hydrocarbons or vanquishing Covid-19, are being taken now. Central banks are removing punch-bowl money. Digital is crushing everything. And without social inclusion, it all falls apart. Welcome to 2022.
Walmart gets taste of the Lotte treatment in China 7 Jan 2022 Officials lambasted the U.S. retailer for network security problems, in what looks like blowback over allegations that Xinjiang-made products were yanked from shelves. The South Korean chain was hounded out of China by similar methods. Worst case, Walmart could share that fate.
Samsung tech prowess drained by governance woes 7 Jan 2022 Operating profit at the maker of microchips and Galaxy phones is set to hit a four-year high of $11.5 bln. Despite the dominance, it trades at a discount to Apple and TSMC. A recent management shakeup provides a chance to tidy up the leadership mess and boost shareholder returns.
Invesco walks very fine line on Sony-Zee deal 7 Jan 2022 The U.S. fund won key concessions in the $7 bln entertainment merger, but it’s also mixed up in a lawsuit over the Indian broadcaster blocking its call for a shareholder vote. Court defeat would set an ugly governance precedent. Victory, however, risks blowing up the transaction.
Aussie proxy reform is wolf in sheep’s clothing 7 Jan 2022 The government is foisting new rules on firms like Glass Lewis and ACSI that offer voting advice for shareholder meetings. Some changes make sense, and one bad idea has been dumped. But on balance they go too far in some areas and not far enough in others.
U.S. safe-haven risks shift one year after riots 6 Jan 2022 Inflation, supply chain snafus, and an overextended workforce threaten the U.S. economy. And divisions that spurred violence remain. But by many markers, the greenback is stronger than last year. In a world that remains in pandemic, the U.S. currency keeps a grip on its top spot.
Exxon CEO’s big problem is Texas, not just climate 6 Jan 2022 The drum beat to replace Darren Woods, who took over the $280 bln oil major in 2017, is increasing. Oil prices are higher now than then. But capital intensive, shale drilling isn’t what the world needs as it transitions. His big bet on the Lone Star state may be his undoing.
Reheated French grocer deal is still unappetising 6 Jan 2022 Auchan may launch a second bid for $16 bln Carrefour. Roping in private equity would allow it to pay in cash, a more palatable dish for its rival’s shareholders than last year’s offer. Job losses and shaky strategic logic mean the French state will be hard to convince.
Viewsroom: A $3 trln Apple, Theranos boss busted 6 Jan 2022 The company led by Tim Cook hit another mega-milestone thanks to a lightning focus on the iPhone universe and investor willingness to accord it a market-beating multiple, Richard Beales explains. And Elizabeth Holmes draws bright lines between hype and fraud, Gina Chon says.
Capital Calls: HSBC and China, Dr. Martens 6 Jan 2021 Concise views on global finance: The Asia-focused lender has a chance to take greater control of its mainland brokerage after recent positive noises from Beijing; buyout firm Permira picks a good time to offload shares in the $5 bln bootmaker.
Reliance channels its name in 40-year bond 6 Jan 2022 It sold the longest tenure paper by an Indian firm as part of a $4 bln deal, on the back of a big successful expansion into consumer businesses. Bagging cheap funding now looks smart. But as China’s tech upheaval shows, four decades is plenty to test India’s reliance on Reliance.
SocGen $6 bln car deal leaves shares in slow lane 6 Jan 2022 The French bank is helping fund the purchase of LeasePlan by its automotive unit ALD. Returns look high and the move helps the pair shift to an electric future. But since investors prefer focused banks, rather than conglomerates, CEO Frédéric Oudéa won’t get much credit.
Shop spree will stuff landlords in bargain bin 6 Jan 2022 Ikea and Amazon are among the many retailers opening new locations. In theory, it’s a good sign for mall owners like Unibail-Rodamco-Westfield, which trade at steep discounts to their assets. Cheap rents and other freebies, however, mean they’re effectively giving away the store.
Dissent endures for Hong Kong shareholders 6 Jan 2022 The buyer of camera components maker Yorkey Optical lifted its offer by 14% after pushback from activist investor David Webb while minority owners thwarted tycoon Joseph Lau’s attempt to take his Chinese Estates private. Small financial victories carry greater meaning these days.
Finding China’s Moderna is a financial long shot 6 Jan 2022 The U.S. biotech giant’s Covid-19 vaccines have inspired copycats in the People’s Republic, where cities are scrambling to contain fresh outbreaks. With foreign jabs yet to be approved, the $13 bln Walvax looks promising. Feverish valuations leave little margin for error.
Moderna’s boosted valuation has Tesla-like spin 5 Jan 2022 Its Covid-19 vaccine is one of the world’s biggest medical products, yet that doesn't justify even half of Moderna’s $94 bln market value. Like Elon Musk’s $1.2 trln carmaker, the company is now a bet on dominating markets yet to exist. That suggests a volatile future for investors.
Toyota’s U.S. triumph comes with an asterisk 5 Jan 2022 The Japanese automaker sold the most cars in the U.S. in 2021, knocking General Motors off pole position for the first time since 1931. But Toyota’s early advantage of hoarded semiconductors is evaporating. And it’s well behind in the race to transition to electric vehicles.
Kazakh gas revolt is timely canary in the coalmine 5 Jan 2022 The central Asian state’s government has fallen after it removed a price cap on liquefied petroleum gas. Kazakhs have a host of local grievances other than energy costs. But commodity spikes will also cause fireworks in European states unless politicians cushion the blow.
KPN could be buyout barbarians’ next telco target 5 Jan 2022 The Dutch operator rebuffed takeover approaches in May. But KKR’s $37 bln Telecom Italia tilt shows the scale of private equity raiders’ appetites. Spain’s Telefonica and Britain’s BT are probably too big. Without a government shareholder, the $13 bln KPN looks vulnerable.
EU’s anti-greenwashing crusade takes a risky turn 5 Jan 2022 The bloc’s new draft of its green taxonomy includes gas and nuclear power. The risk is a tool intended to make sustainable financing less prone to greenwashing does the opposite. A lot hinges on whether investors properly differentiate between clean and “transition” activities.
Capital Calls: Beyond Meat’s faux chicken 5 Jan 2021 Concise views on global finance: The plant-based meat company’s shares jumped 5% on news KFC will offer its product. The extra value assumes benefits beyond selling buckets of substitute fried chicken.
The Aussies are coming! The Aussies are coming! 5 Jan 2022 Two pension fund managers Down Under are buying a New Zealand hospital chain for $500 mln. It’s a small sign of things to come. As the country’s $2.4 trln superannuation sector grows, consolidates and invests more directly, it will sail beyond the Tasman Sea for takeover targets.
China Mobile punches up direct-listing numbers 5 Jan 2022 A year after getting run out of New York, the telecom titan sold $8 bln of equity in Shanghai while initiating a $13 bln stock buyback in Hong Kong. Deploying its bloated cash pile is overdue, but such contortions also support the idea of listing shares without raising capital.
Fanatics takes Topps at rock bottom 4 Jan 2022 The flashy new winner in U.S. collectibles is buying its old-school rival’s unit. It comes months after Fanatics effectively busted Topps’ deal to merge with a SPAC by grabbing the official American baseball-card business from 2026. Now Fanatics is sweeping up its victim, too.
SPAC deal hiccups are rarer than they ought to be 4 Jan 2022 EToro, an Israeli rival to retail trading platform Robinhood, just cut its worth by over 15% in a deal with a blank-check company. Stretched valuations suggest there should be more rejigs like this in SPAC world. But sponsors have powerful incentives to forge ahead regardless.
TPG reads the room with $9.5 bln IPO 4 Jan 2022 The buyout firm founded by David Bonderman and Jim Coulter is aiming for a valuation only a whisker richer than peers Apollo and Carlyle, and far below giants Blackstone and KKR. Even with TPG’s trendy ESG stylings, restraint is wise. Investor goodwill matters more than new cash.
Tencent’s Sea rejig keeps most people happy 4 Jan 2022 The Chinese tech behemoth is selling part of its stake in its $120 bln Singaporean peer. Sea also plans a revamp of its supervoting shares so that founder Forrest Li retains control. Li, Tencent and even Beijing can cheer. Minority investors have the least reason to be enthused.
Microsoft and Satya Nadella to be tech standouts 4 Jan 2022 The $2.5 trln software giant has outpaced most Silicon Valley peers over several years. A slowdown might seem inevitable. But the company’s CEO since 2014 is poised to deliver again. That could make him the most successful second-generation tech boss ever in market value terms.
Financial products we’d rather not see in 2022 4 Jan 2022 Breakingviews is readying a new metaverse-based buy-now-pay-later digital-asset trading platform. Here are a few of the shiny new opportunities that could pop up in the coming year, from a melding of SPACs with NFTs to a new crypto-churn account.
Africa’s lofty data-centre prices have solid roots 4 Jan 2022 After deals in Nigeria and Kenya, $50 bln U.S. operator Digital Realty is buying most of South African rival Teraco. The $3.5 bln price tag is eye-catching given the risky location. But the continent’s growing population and rising data demand make the long-term numbers add up.