China’s overseas oil giant preps for inward turn 21 Apr 2022 CNOOC, booted off New York, popped the maximum 44% on its Shanghai debut. It was well-timed, with sanctions on Russia boosting the fossil fuel’s price. Diplomatic tensions make its foreign business risker, and it may ditch some assets. But there’s plenty to do closer to home.
Great Resignation programmed into Indian IT deal 21 Apr 2022 As global companies upgrade to the cloud and explore the metaverse, revenues for outsourcing firms are surging. So are employee departures. At this delicate time, the risks of a mooted merger of two services companies of $32 bln Larsen & Toubro could outweigh the benefits.
India’s Reliance is miscast as M&A stalking horse 21 Apr 2022 Mukesh Ambani’s $230 bln conglomerate is touted as a bidder in big deals from Walgreens’ Boots sale to telecom operator BT. Reliance’s record suggests it’s hardly the new dumb money. Bankers trying to fill a void left by sovereign funds and Chinese buyers may be disappointed.
Oil-field services miss brief chance to make hay 20 Apr 2022 Baker Hughes’ first-quarter earnings disappointed due to cost pressures and a fading Russian business. Growing demand for liquefied natural gas might benefit the company and its peers. But the reasons that business will thrive are the same ones that are reducing the appeal of fossil fuels.
P&G’s savvy inflation remedy has its limits 20 Apr 2022 The Braun razor maker’s sales rose 10% in the third quarter. And cuts to marketing spend helped prop up its operating margin even as commodity and freight prices surged. But some input costs filter through with a lag. CEO Jon Moeller may struggle to keep delivering good news.
Sanctions sound alert for art – and its regulators 20 Apr 2022 Private sales and the use of shell companies make for anonymity. Russians are not top of the art-world heap, but recently imposed financial constraints and the rise of digital assets could change that. U.S. oversight has not kept up. Dealers and watchdogs alike need to wise up.
Musk’s Twitter tilt comes at bad time for Tesla 20 Apr 2022 The billionaire’s quixotic offer for the social-media group will be too big a distraction from running the $1 trln electric-car maker. Tesla faces disruptions from rising costs, supply-chain woes as well as more competition for scarce resources. That demands Musk’s full focus.
Porsche IPO is slow road to a higher VW valuation 20 Apr 2022 The German carmaker’s luxury brand could easily be worth 90 bln euros. Yet a plan to only sell 25% may limit the benefit for shareholders by leaving the company with a small free float and complex governance. Their consolation is that this listing may not be the final model.
Just Eat Takeaway faces humiliating U.S. exit 20 Apr 2022 The food delivery group may sell Grubhub, a business it bought last year for $7.3 bln, an embarrassing U-turn for CEO Jitse Groen. Expanding into the tough U.S. market always looked tricky. Getting out when there are few buyers, just as consumers are squeezed, will be harder.
Indonesia’s EV dream gets $15 bln spark of reality 20 Apr 2022 South Korea’s LGES, China’s CATL and partners plan to build comprehensive battery supply chains in the country. That’ll please Jakarta, whose bold electrification goals need industry buy-in. With supply chains stressed, it’s a well-timed boost for the wannabe production hub.
Capital Calls: KKR and Australia, Danone 20 Apr 2022 Concise views on global finance: The private equity firm’s offer for Ramsay Health Care would almost double Down Under M&A by value this year; the French consumer group’s sales growth boost is offset by inflation fears.
Capital Calls: Blackstone backs perpetual students 19 Apr 2022 Concise views on global finance: The private equity firm is buying a campus housing investment vehicle for $12.8 billion. Steady cash flows and the need for more dorms make it a nice fit for Blackstone’s permanent capital vehicles.
IMF’s search for Ukraine help should start at home 19 Apr 2022 The Washington-based institution expects Russia’s invasion to cut global growth to 3.6% this year, while keeping inflation higher for longer. It also wants international cooperation to bolster Kyiv’s war-torn economy. In that regard, the fund’s own assistance is falling short.
Steinway IPO plays old tunes with new chords 19 Apr 2022 Back in 2013, the piano maker sold itself to hedgie John Paulson for $512 million. Now it’s set to perform for public markets again. Quality and luxury remain main themes, but China and technology are modern harmonies. A valuation well above $1 billion wouldn’t be off-key.
Nielsen activist stand is tough to deliver 19 Apr 2022 WindAcre's resistance to the $10 bln sale of the TV-ratings group pits it against buyer and more prominent agitator-investor Elliott. WindAcre is putting its money where its mouth is, but confusing tactics and a demand for an absurd payoff make its campaign look flaky.
French financial royalty falls flat in music SPAC 19 Apr 2022 A blank-cheque vehicle backed by billionaire François-Henri Pinault and banker Matthieu Pigasse struck a $1 bln deal with Deezer. The European music streamer has carved out a niche and may fend off Spotify. But the SPAC is paying a higher multiple for a slower-growing company.
How metals markets can limit future debacles 19 Apr 2022 UK regulators want answers after the London Metal Exchange voided nickel trades. A supply crunch in a wider range of metals means Europe’s key market can expect more crises. Regaining trust may require new leaders, but the LME can at least reduce the impact of future shocks.
Didi’s peers will pay price of New York debacle 19 Apr 2022 The Chinese ride-hailing group is planning a U.S. exit less than a year after arriving. But shareholders, who have seen the stock fall 85% since the disastrous IPO, have no guarantee of an exit afterwards. The corporate wreck will taint other mainland firms eyeing the Big Board.
Shanghai deflates the Chinese Dream 19 Apr 2022 Brutal lockdowns in the financial centre are testing the elites' confidence in the Communist Party. The tacit contract in which citizens traded political rights for rising living standards is fraying. Revolt is unlikely, but China can ill-afford a sulking intelligentsia.
Bank of America deserves its moment in the sun 18 Apr 2022 The second-largest U.S. lender took less of a hit than its peers amid a rough first quarter. With interest rates rising, investment banking on the wane and its house in order, BofA is in a sweet spot, even relative to JPMorgan. Boss Brian Moynihan can enjoy it while it lasts.
Twitter’s habitat lacks natural predators 18 Apr 2022 Elon Musk’s $41 bln bid has put the social network in play, but closing a deal is harder. The Tesla boss may struggle to recruit partners, while meager earnings make it a stretch for private equity. Tech giants face antitrust concerns and toxic content will put off media suitors.
Capital Calls: China GDP, Fed bank cop, Singapore 18 Apr 2022 Concise views on global finance: China’s GDP print adds fuel to the easing debate; Former Treasury official Michael Barr is set to become America's next top bank regulator; Singapore’s succession plan clears the deck for other pressing business.
India’s Russian oil binge carries hidden costs 14 Apr 2022 New Delhi is filling its boots with Moscow’s cheap crude, just as Europe and traders like Vitol start to turn away. The aggressive ramp-up carries longer-term risks. As a keen buyer, India will find it hard to get waivers from sanctions if the West targets Russia’s energy trade.
Goldman can close valuation gap on Morgan Stanley 14 Apr 2022 The bank run by David Solomon is worth 40% less than James Gorman’s group, based on multiples of tangible book value. Before the pandemic the discount was 20%. Morgan Stanley’s earnings are steadier, but its rating is rich. If Goldman keeps a lid on costs, the divide will narrow.
Twitter can afford to refuse Musk’s $41 bln bid 14 Apr 2022 The world’s richest man says he’ll pay $54.20 a share for the social network, but may sell his 9% stake if the “best and final” but non-binding offer is rejected. It’s less than a week since Musk walked from a deal to join the board. Twitter has multiple reasons to demand more.
An economist’s warning for stock market investors 14 Apr 2022 Most economic theory is far removed from the gyrations of financial assets. A new book from a veteran City of London economist attempts to close the gap. Edward Chancellor explains why his troubling conclusions about U.S. equity valuations deserve to be taken seriously.
Capital Calls: Stellantis CEO’s outsize salary 14 Apr 2022 Concise views on global finance: The carmaker’s shareholders opposed Carlos Tavares’s 59 mln euro pay package, but he’s going to receive it anyway.
Blackstone’s Italian gambit can stay on the road 14 Apr 2022 Looking to deter a rival bid, the buyout group has teamed up with the Benettons to take infrastructure group Atlantia private. The 19 bln euro equity value looks steep. Yet inflation protection from concession assets and cash from an upcoming sale justifies the swoop.
EU greenwashing fix gets off to dodgy start 14 Apr 2022 Some 4 trln euros of funds are now deemed sustainable under European disclosure rules governing ESG investing. Yet the EU yardstick for such a definition is vaguer than for some private sector players. At the very least this is confusing; at most it actually aids greenwashing.
Stranded jets are least of plane lessors’ problems 14 Apr 2022 Big fleet-owners like AerCap may have to write off $10 bln of planes trapped due to Russian sanctions. Ultimately, though, insurers should cover their losses. A bigger brake on the aircraft-leasing industry’s rapid ascent is the rising cost of debt from jittery lenders.