Do hybrid vehicles help or hurt the environment? 25 Aug 2022 Automakers like Toyota still favour cars that run on both batteries and fossil fuels. In this Viewsroom podcast, Breakingviews columnists debate whether this is smart given shoddy power grids and rising cell costs, or a dangerous distraction in the battle against climate change.
U.S. student loan plan brings limited relief 24 Aug 2022 Joe Biden unveiled a plan to forgive a fraction of the $1.6 trln in government-issued higher-education debt. Even with a $10,000 cut, many borrowers will struggle to pay off balances while new enrollees are stuck with some old-school terms. The middle-ground fix leaves gaps.
Capital Calls: Schneider/Aveva 24 Aug 2022 Concise views on global finance: The $73 bln French group tries to benefit from its UK unit’s falling share price to bring it in-house.
Richemont finds tolerable way to refocus 24 Aug 2022 The $60 bln Cartier owner has finally sold part of e-commerce unit YNAP to Farfetch. Richemont gets a lower price than it could have last year, but keeps online presence via payment in its U.S.-listed rival’s shares. And cutting its stake helps it focus on more promising sectors.
Fintech’s next big down round may have an upside 24 Aug 2022 After pay-later group Klarna raised cash at an 85% discount to its previous valuation, candidates for the next giant markdown include $25 bln Chime and $32 bln FTX. But it isn’t all bad news. By raising money when others can’t, they could grab market share or scoop up rivals.
Gautam Adani’s tycoon rivalry spills into the news 24 Aug 2022 The Indian infrastructure tycoon has grabbed a 29% stake in $300 mln NDTV, a move to match the influence Mukesh Ambani enjoys thanks to his Reliance group’s TV channels, watched by half the country. The broadcaster may be a trophy asset but there are decent returns to be made.
Ping An’s reset challenge dwarfs its HSBC battle 24 Aug 2022 The $107 bln Chinese insurer beat forecasts with first-half net profit of $8.8 bln. Its calls for the London-based bank — its largest shareholding — to break up won’t alter its internal issues, though. Shares are down one-fifth this year, underscoring the cost of painful reforms.
Chinese consumers catch long-Covid mindset 24 Aug 2022 Results from retailers like JD and Xiaomi show shoppers eschewing discretionary items like smartphones, dashing hopes of a quick rebound. Covid fears and economic malaise could be entrenching a pessimistic reflex. Japan’s example shows such attitudes can take decades to change.
Instacart’s fast growth isn’t fast enough 23 Aug 2022 The grocery delivery service is expanding into advertising and offering services to rivals, as boss Fidji Simo preps to potentially go public. Yet even with double digital revenue growth it only looks to be worth around $11 bln, far less than a private valuation a few months ago.
Intel makes chips look almost like infrastructure 23 Aug 2022 Brookfield is putting up half the cost of two $30 bln Arizona plants, at a rate somewhere between what Intel pays for equity and debt. Yet chips are riskier than traditional infrastructure, suggesting Intel is giving up more than its partner to make the deal work financially.
Recession could be U.S. banks’ guilty pleasure 23 Aug 2022 Big lenders like JPMorgan and Bank of America are prepared for an economic downturn that investors have already half priced in. Not only would banks survive even a savage contraction, they might even emerge stronger as fintech rivals would face a much heavier pummeling.
Buyout investors are heading for a cash crunch 23 Aug 2022 The $2 trln industry’s backers, such as pension funds, often rely on past profits to meet calls for fresh capital from KKR and others. But that doesn’t work in a slump. Since alternative cash-raising methods are costly, private equity’s appeal as an asset class may take a hit.
Australia’s investing giant is taking on the world 23 Aug 2022 Inflation and rate hikes made for a tough first year atop AustralianSuper for Paul Schroder. In this week’s Exchange podcast, he lays out his plan to quadruple the country’s largest pension manager in size by expanding abroad, learning from peers and targeting private equity.
China shadow bankers pray to be systemically risky 23 Aug 2022 Auditors are investigating the country’s $3 trln trust industry that caters to wealthier investors. Falling property prices are stressing such non-bank lenders. But securing a bailout for rich clients would require a miracle given President Xi Jinping’s “common prosperity” push.
Capital Calls: Food fight 23 Aug 2022 Concise views on global finance: Retailers like E-Mart are cutting food prices amid surging costs, risking a sector-wide race to the bottom.
Once people ditch oil, they won’t come back 22 Aug 2022 The 1973 crisis sent oil prices spiraling and knocked U.S. demand onto a permanently lower trajectory as economic growth became less energy intensive. High prices three decades later caused gasoline demand to stall entirely. This time around the result will be lasting shrinkage.
Signify Health suitors invite trustbuster pain 22 Aug 2022 The home-healthcare data analysis company has attracted an $8 bln bid frenzy from Amazon, CVS and UnitedHealth. Its role in shaping provider and patient choices could give corporate titans more power. The lawsuit against Change Healthcare’s deal indicates Washington’s attitude.
Long arm of China law reaches today from Tomorrow 22 Aug 2022 Xiao Jianhua, the man behind the dismembered investment colossus, has been convicted of graft and illegal use of funds five years after he was snatched from Hong Kong. His fate is a timely reminder that Beijing is determined to show that no company or person is too big to fail.
UK energy’s looming bailout implies a quid pro quo 22 Aug 2022 Britain may subsidise EDF, Centrica and others to curb customers’ utility bills. Power groups are largely not to blame for the mess. But with taxpayers possibly on the hook for over 100 bln pounds, the industry could face blowback like pay curbs and dividend restrictions.
Investors add $10 trln activist wrench to H2O risk 22 Aug 2022 Water has long played second fiddle to emissions in battling climate change. Now Fidelity, DWS and 62 other money managers want big users from McDonalds to Microsoft to better manage and protect the resource. With droughts and floods set to inundate earnings, it’s past time.
Capital Calls: Paytm protest vote 22 Aug 2022 Concise views on global finance: A majority of the Indian fintech posterchild’s public institutional investors voted against the pay of founder and boss Vijay Shekhar Sharma.
Musk’s Twitter subpoena storm gets everyone wet 19 Aug 2022 The Tesla boss is dragging Salesforce and others into his $44 bln M&A fight against the social network. It could reveal embarrassing communications. Twitter too has legal requests to Musk co-investors like Larry Ellison. That’s more incentive to settle and part the clouds.
Capital Calls: Cineworld needed AMC’s apes 19 Aug 2022 Concise views on global finance: The U.K.-based cinema chain is preparing for bankruptcy, according to the Wall Street Journal, while similarly debt-beleaguered AMC is still standing – an object lesson in the power of becoming a favorite of retail traders.
Paris and Berlin’s windfall tax timidity is futile 19 Aug 2022 France and Germany oppose a raid on firms profiting from the energy crisis. Berlin could borrow more, and President Macron has pledged not to hike taxes. Yet given it won’t make investors see either country as way more business-friendly, the reluctance makes little sense.
Geely’s export success warns global rivals 19 Aug 2022 The $21 bln Chinese carmaker is growing overseas, despite political headwinds and consumer skepticism. Electric vehicles are targeted to make up half its sales by 2023. Boss Li Shufu is best known for acquiring Volvo, but now his own brands can compete in Europe and beyond.
Japan’s sober youth gives its brewers a headache 19 Aug 2022 A decline in drinking among the country’s young has driven the national tax agency to try to boost alcohol’s popularity. No wonder Asahi boss Atsushi Katsuki is eyeing the U.S. market. Yet previous overseas adventures by Japanese booze giants make for a sobering read.
Hong Kong’s tiny floats are filled with big risks 19 Aug 2022 A biotech firm sold just 2% of shares in its IPO, highlighting a trend of relatively illiquid stocks coming to market. It’s a way to prop up valuations. Yet issuers will struggle to raise more funds and the added volatility worsens the city’s dismal secondary market performance.
D.C. turf war opens crypto regulatory arbitrage 18 Aug 2022 The Fed issued the latest salvo in a regulatory tussle, requiring banks to alert the agency when they offer services for bitcoin and its ilk. The SEC and CFTC are also fighting to oversee the $1 trln market. It’s an opportunity for digital currency outfits but hurts token owners.
Big Pharma should brace for worst cancer outcome 18 Aug 2022 Investors have wiped $36 bln off Sanofi, GSK and its consumer spinoff on fears heartburn remedies cause cancer. The science implies an overreaction. But the scope for U.S. juries to see the saga as akin to Bayer’s Roundup weedkiller debacle could actually make the hit bigger.
Capital Calls: Taiwan, Meme stocks 18 Aug 2022 Concise views on global finance: Trade talks between the United States and Taiwan suggest tensions with China will keep rising. Meanwhile, the fade and rally in Bed Bath and Beyond shares show the stock craze is making a comeback.