Alan Jope exit is easiest step of Unilever revival 26 Sep 2022 Shares in the $111 bln Dove maker rose after it said its CEO would leave by end-2023. A botched bid for GSK’s personal health arm hit Jope’s credibility. But even with a new broom Unilever will struggle to pull off a big deal, and selling lower-growth units looks harder to do.
Investors strangle UK’s pro-growth budget at birth 26 Sep 2022 Government bond yields soared and the pound slumped following Chancellor Kwasi Kwarteng’s 45 bln pound tax cut package. Higher interest rates will depress demand while costlier energy imports will further weaken the public finances. That risks cancelling out any boost to growth.
Italy’s right-wing winners inherit poison chalice 26 Sep 2022 Nationalist Giorgia Meloni, EU-sceptic Matteo Salvini and convicted former PM Silvio Berlusconi scored an election victory. Despite campaign unity, they disagree on sanctions and spending. The rivalries risk undermining the high-debt nation’s ability to tackle its energy crisis.
Capital Calls: Clock ticks for reining in TikTok 26 Sep 2022 Concise views on global finance: The Chinese-owned social media network’s prodigious growth will make the U.S. government’s attempts to allay security concerns trickier still.
India’s bond inclusion will be overdue and timely 26 Sep 2022 The sovereign debt of the world’s fifth-largest economy may be added to JPMorgan’s emerging market index, offsetting Russia’s exclusion. It’s a step towards prising open a $1 trln market, and a feather in India’s cap. But there are reasons it took so long.
Capital Calls: Costco membership 23 Sep 2022 Concise views on global finance: The $216 bln retailer known for hooking shoppers with subscriptions has a high valuation for a business that, now, has many competitors.
Wall Street’s banking-as-a-service has a problem 23 Sep 2022 Private equity’s rising share of M&A — up to 26% this year — should be great for banks, who can resell their capital markets services to LBO shops. But as debt markets groan and equity markets stop up, it could be one more subscription business hurt by the downturn.
Shopify plays ‘choose your own adventure’ with pay 23 Sep 2022 The Canadian e-commerce firm is giving rank and file the chance to choose between equity and cash. Flexibility is good, and it could eliminate a gap between perceived and actual benefits. But it also forces employees to take a stand on how they think their own company is valued.
ESPN would help Disney and Comcast settle a score 23 Sep 2022 Bob Chapek, who reigns at the Magic Kingdom, wants to buy the rest of Hulu sooner rather than later to beef up his streaming strategy. Brian Roberts, his counterpart and Disney nemesis, has less reason to sell quickly. A deal including the sports network could tempt him to talk.
UK growth requires an even less popular Liz Truss 23 Sep 2022 The new prime minister wants the economy to motor, and says she’s ready to take tough calls. Yet her 45 bln pounds of tax cuts have already alarmed debt markets, and may not deliver growth. If Truss wants the UK to grow without a fiscal mess, she will have to upset her base.
Hong Kong’s opening leaves it long way from normal 23 Sep 2022 The city will no longer quarantine arrivals. It may lure Wall Street bosses to a key banking summit. But with China's mainland unlikely to reciprocate access, Hong Kong will go on struggling. Its recessionary status is leader John Lee’s best hope of winning more relaxations.
India’s fintech fest is a vibrant coming-out party 23 Sep 2022 Crashing valuations did not dampen spirits at a Mumbai confab this week drawing 7,000 daily visitors. Officials celebrated startups, their global potential, and offered a checklist for not running afoul of evolving regulation. Questions on profitability will be for another day.
Review: Tencent reflects China’s blunted tech edge 23 Sep 2022 The social media and gaming giant became the crown jewel of China’s private sector. Lulu Chen's "Influence Empire" describes how boss Pony Ma and his rivals grew so powerful they drew Beijing’s ire. Their humbling bodes ill for President Xi Jinping’s state-led innovation push.
Kohl’s investor tries to make old wardrobe work 22 Sep 2022 Investor Ancora wants the CEO and chairman gone after the $3 bln retailer’s stock price halved in a year. But the activist has been around since 2020, and board members it backed haven’t helped. A sale is needed, but if Ancora doesn’t step up its game, it is just a distraction.
Elliott’s double dip spares Citrix banks’ blushes 22 Sep 2022 Paul Singer’s hedge fund has made an unusual bet, picking up $1 bln of bonds backing its own buyout of cloud firm Citrix. The banks get shot of a balance-sheet albatross. And by getting a big discount on debt issued in a frothy market, Elliott benefits from their pain twice over.
Tokyo blinks in game of forex chicken 22 Sep 2022 Japan has responded to the Federal Reserve’s rate hikes by moving to prop up the staggering yen, the first intervention since 1998. The country’s economy and Bank of Japan Governor Haruhiko Kuroda’s loose policy make it unlikely the plan will work. The attempt may even backfire.
Italy’s first female leader, Amazon’s monopoly 22 Sep 2022 Far-right leader Giorgia Meloni is favourite to become prime minister after Sunday’s election. In this Viewsroom podcast, Breakingviews columnists debate how she will handle Rome’s debt, which is expected to reach 148% of GDP. And: the online retail giant’s antitrust battle.
Bank of Cyprus bid makes case for lender buyouts 22 Sep 2022 Lone Star offered 700 mln euros for the Mediterranean group. It could probably make a good return even if it paid much more. Growing interest from private equity puts other beaten-up minnows on notice, and could be a boon for unwieldy giants in need of pruning, like SocGen.
Corporate lemons will vex Italy’s next government 22 Sep 2022 Premier Mario Draghi couldn’t sell bailed-out Monte Paschi nor halt a share slide at indebted Telecom Italia. If right-wing Giorgia Meloni wins Sunday’s election, she will have to untangle such company knots. Her zeal for patriotic solutions may prove costly and inefficient.
Capital Calls: Novartis 22 Sep 2022 Concise views on global finance: The Swiss drugmaker hopes to fix its growth problem by listing its generic drug business and focusing on the U.S. market.
China property IPO bets on big name to calm fears 22 Sep 2022 The country’s largest developer, Vanke, wants an $8 bln valuation for its services unit in Hong Kong’s top float this year. That’s below an earlier price tag, reflecting the sector’s fragile state, but still pricier than some peers. A brand premium in soft markets looks bold.
Fed makes inflation fight Joe Biden’s problem 21 Sep 2022 The central bank raised rates by 75-basis-points and suggested they could go higher than expected without a hard landing. That seems overly rosy. But inflation could do more harm than a recession – and if the Fed overshoots, it’s the man in the White House that carries the can.
Eli Lilly obesity cure creates valuation problem 21 Sep 2022 The pharmaceutical firm's weight loss drug could rake in as much as $75 bln annually if everything goes perfectly. America’s thick waistline desperately needs help. But even with generous assumptions, the company is pushing valuation limits. Plus governments will limit success.
Ford’s supply wreck overshadows Detroit’s optimism 21 Sep 2022 The carmaker saw $7 bln wiped off its valuation after saying shortages would crimp results. Still, both it and General Motors have clung to upbeat full-year profit predictions. Add in spiraling costs and tightening credit, and their happy outlook is increasingly discordant.
Uniper’s new bailout mixes scars and consolations 21 Sep 2022 Germany’s 8 bln euro capital injection heavily dilutes the stricken energy group’s investors and hands main shareholder Fortum a big loss. The Finnish group does gain from exiting the mess, and Berlin might one day profit from the rescue. But neither side will be celebrating.
Vodafone’s new activist is mixed investor blessing 21 Sep 2022 French tycoon Xavier Niel bought 2.5% of the $34 bln telecoms company. That will cheer fellow shareholders, like Cevian Capital, who are pushing CEO Nick Read to simplify the group. Yet the risk is that Niel is more interested in getting hold of its Italian assets on the cheap.
Capital Calls: Sea’s distress call 21 Sep 2022 Concise views on global finance: The boss of Singapore’s $26 bln e-commerce to video-games outfit has laid out plans to achieve financial self-sufficiency, sending a wake-up call to other cash-burning peers in the region.
Anxious Kaisa investors throw good money after bad 21 Sep 2022 Foreign bondholders in the Chinese property firm, which has $12 bln of offshore credit in default, are offering $2 bln to take over stalled projects plus restructure debt. A similar proposal failed last year, but as its woes worsen, Kaisa may reconsider. Pricing is the trick.
Loudmouth investors tone it down for new era 20 Sep 2022 Jeff Smith’s Starboard has ideas for $5 bln Wix but isn’t asking for a board seat. Bill Ackman and Dan Loeb also are playing nicer. Updated proxy voting rules make shareholder campaigns easier. Getting access to directors makes a bigger difference and demands tactical changes.
First Boston deserves a selective revival 20 Sep 2022 The defunct brand evokes discord and failure on Wall Street, but also the feats of M&A swashbucklers like Wasserstein and Perella. Reapplying it to Credit Suisse’s investment bank could draw a line to cut along later, a move true to First Boston’s decades-old pioneering spirit.