Toshiba CEO change sends promising signal 1 Mar 2022 Satoshi Tsunakawa will be replaced by Taro Shimada, who joined from Siemens in 2018. The move suggests a sale option might get reconsidered over a controversial breakup plan. The bad governance that has dogged the conglomerate, however, means any optimism should be muted for now.
Singapore slings REIT manager into big league 1 Mar 2022 A $7 bln merger of property trusts run by state-backed Mapletree has been attacked over price and rationale. Both sides have cause to be wary, although increased heft entails lower funding costs, plus prestige for the fund’s manager. Investors, however, end up with less choice.
Oil lubricates Beijing’s Russian tightrope 1 Mar 2022 China relies on crude from the now pariah state for nearly a fifth of total imports. Though the pair can sidestep Western sanctions on Moscow and settle most transactions in yuan, being too helpful could backfire on Beijing. Its banks will be caught in the crossfire either way.
Ukraine puts power of U.S. tech firms on new level 28 Feb 2022 Facebook is fighting Russian hackers while SpaceX is providing internet access. Such communications services are critical in a war. It’s easy for the CEOs concerned to take one side with little risk to revenue from the other. Next time, the incentives could be more complicated.
Latest U.S. bank deal adjusts for watchdog delays 28 Feb 2022 TD Bank’s $13.4 billion acquisition of First Horizon will help clean up the fragmented industry, with little obvious threat to customers. Yet regulators remain uneasy over mergers. An interest-like fee for holdups suggests bank chiefs are accepting that, but forging ahead anyway.
Chevron’s green fuel deal is cheap and cheerful 28 Feb 2022 The $276 bln oil giant is buying sustainable diesel firm Renewable Energy for around $3 bln. A solid investment return makes it financially sensible. It's also a bet on the transition away from fossil fuels. For now, though, it's a tiny one compared to Chevron's European peers.
Russian economic collapse will be hard to avoid 28 Feb 2022 The central bank more than doubled its main policy rate to 20% to support the plunging rouble. It won’t be enough. But further hikes or capital controls would compound pain in an economy where Western sanctions are spurring a run on banks. Moscow has few viable policy options.
Capital Calls: Buffett, Sanctions, Defence, Canada 28 Feb 2022 Concise views on global finance: The Oracle of Omaha has seen value in his company’s own stock; Switzerland breaks with traditional neutrality over Ukraine; military-equipment stocks are surging; and Ottawa may let the Rogers-Shaw telecom merger follow a discouraging U.S. path.
Investors in Russia face mark-to-no-market problem 28 Feb 2022 The rouble tanked and Moscow’s bourse froze after the West intensified sanctions against President Vladimir Putin. Money managers and foreign companies face the prospect of writing off Russian assets. Uncertainty about who bears those costs will ricochet around global markets.
U.N. climate report takes aim at net-zero 2050 28 Feb 2022 The world is moving too slowly to stop global warming, per the multinational body’s latest study. Ditching fossil fuels will reduce natural and man-made disasters. But too many governments and companies use the mid-century emissions targets to delay action. That’s unsustainable.
Germany is turning fiscal exceptions into the rule 28 Feb 2022 Chancellor Olaf Scholz will hike defence spending to 2% of GDP and invest 100 bln euros in the military. A historic foreign-policy shift is just the latest instance of Berlin finding ways around its budget rules. Scrapping them would be simpler given a looming energy transition.
Activist sets up Australia’s AGL for a sick burn 28 Feb 2022 Snowcap wants the power company to shelve its demerger, fend off any more lowball offers from Brookfield and adopt the latter’s plan to ditch coal. That will ultimately add pressure on AGL’s underperforming board to sell and might even result in a higher price from its suitor.
BP’s bruising Russian exit almost worth the pain 28 Feb 2022 The UK oil giant is getting out of its 20% stake in $39 bln Rosneft. Russia’s pariah status maximises the hit to its income statement. But the crisis has forced BP to take a step that could eventually allow investors to take a more generous view of its green transition.
Use dollar’s clout, even if that means losing it 27 Feb 2022 Efforts by America and its allies to isolate Russia from the international financial system may hasten other countries’ efforts to bypass the greenback and eventually erode its global dominance. But there’s little point in having power that can’t be wielded in dire circumstances.
Sanctions shock-and-awe reverberates beyond Russia 27 Feb 2022 Western allies will limit Moscow’s ability to use its currency reserves and kick some of the country’s banks out of the SWIFT payment system. While details are vague for now, it looks like a targeted attempt to undermine Russia’s financial system. Other countries, notably China, will take notice.
Russia is dry run for bigger China sanctions test 25 Feb 2022 The threat of penalties didn’t stop Vladimir Putin from invading Ukraine. Sanctions would have even less chance of preventing China from taking control of Taiwan. The deeper the trade ties, the greater the chance of self-harm. And China has a head start in creating workarounds.
Biden’s fossil-fuel enmity backs him into a corner 25 Feb 2022 The U.S. president’s climate stance has made him few friends in the oil patch. But U.S. drillers can fill gaps caused by Russia’s invasion of Ukraine. Expediting applications and rolling back regulations is a climbdown, but it would curb two foes: rising prices and low popularity.
Trump’s Truth Social is an overvalued threat 25 Feb 2022 The former U.S. president launched his social media app after Twitter and others booted him from their platforms. Twitter’s slowing growth suggests he might be able to capture a unique following. But based on its users, its $20 bln market cap is at least double fair value.
Western banks face Russian triple whammy 25 Feb 2022 EU and U.S. bank stocks tumbled after Vladimir Putin invaded Ukraine. The conflict may blunt the benefits of higher interest rates and inflict losses on cross-border loans. In a worst-case scenario, Raiffeisen, UniCredit and SocGen could have to write off their Russian units.
Capital Calls: Block avoids round hole 25 Feb 2022 Concise views on global finance: The former Square, run by Jack Dorsey, gained 20% in value after fourth-quarter numbers showed its core Cash App business still growing. Making the most of the $29 bln Afterpay acquisition is a key challenge for 2022.
Russia’s wheat clout can hit world where it hurts 25 Feb 2022 The grain’s price hit a record high after the invasion of Ukraine, source of 8% of world exports. A long conflict in a country called the “breadbasket of Europe” would mean global shortfalls. President Vladimir Putin would cause even more disruptions if he curbed Russian exports.
China’s yuan plausibly mimics a safe-haven asset 25 Feb 2022 The currency, once subject to speculative swings, has stayed stable as Russia attacks Ukraine. It’s buttressed by a big trade surplus and central bank conservatism, both of which might change, but it has clearly gained traction with serious investors.
Hong Kong is failing Chinese migrants 25 Feb 2022 Departures by the financial hub’s vocal but tiny population of Westerners have monopolised headlines. Less obvious but more important are professionals from the mainland. The city, long a haven for Chinese people fleeing chaos in the north, is fast losing its allure.
Russia gets the Huawei treatment, on steroids 24 Feb 2022 The U.S. government plans to cut the country off from American microchips, telecoms gear and other items. It’s a grander version of the trade curbs that hobbled China’s telecom giant Huawei, and could sting the Russian economy more than financial sanctions.
UnitedHealth deal block is Big Tech’s pre-op 24 Feb 2022 U.S. merger cops want to stop the healthcare goliath’s $8 bln union with Change Healthcare. Regulators’ worries are less about cornering a market than the buyer’s access to sensitive information. That sets a precedent for antitrust surgery on data-hoarders in Silicon Valley.
American LNG burns even brighter 24 Feb 2022 Nearly 40% of European gas comes from Russia, and LNG facilities elsewhere are already largely booked. Still, the Russian invasion of Ukraine will boost booming liquefied gas exports. Replacing even part would mean long-term surety for firms like Cheniere itching to grow.
Viewsroom: Russia and Ukraine, Credit Suisse woes 24 Feb 2022 As President Vladimir Putin launches the biggest attack on a European state since World War Two and the West prepares its response, Dasha Afanasieva and Gina Chon discuss what comes next. And Liam Proud explains how an embarrassing data leak is the Swiss bank’s latest headache.
Ukraine war gives impetus to climate backsliders 24 Feb 2022 Politicians are supposed to be fast-tracking decarbonisation. Russia’s invasion may speed the long-term shift to renewable energy. But it could also empower fossil fuel fans to ease energy security fears via new supply. Investors, lured by high crude prices, may go along with it.
Bond market sends flawed signals on U.S. economy 24 Feb 2022 A dash to safe havens means Treasuries are in big demand. But the yield curve is sending the same messages it was before Russia invaded Ukraine: that Fed rate hikes may trigger recession and that policy rates won’t rise much above 2%. Both presumptions could be wrong.
Alibaba’s $400 bln selloff makes case for buybacks 24 Feb 2022 The Chinese giant delivered a dismal set of results with sales at its core business falling for the first time. After a 60% drop in the stock over the past year, a big repurchase would send a signal of confidence. With $60 bln of net cash, Alibaba can afford to splurge on itself.