Capital Calls: SEC, UK housing, Marijuana 10 Jan 2022 Concise views on global finance: The U.S. watchdog wants more private company transparency; The UK government’s decision to hit housebuilders with a four billion pound repair bill has lessons; and cannabis producer Tilray gives a glimpse of its life after its merger with Aphria.
European banks’ league-table loss is investor win 10 Jan 2022 Dealmakers at Credit Suisse, Barclays, UBS and others are losing market share in their home region. Fighting back is costly and futile given the advantages of U.S. behemoths like JPMorgan. Better to slim down and focus on key niches, as Deutsche Bank has with bond underwriting.
Turkish mobile spat exposes state fund weakness 10 Jan 2022 Billionaire Mikhail Fridman wants to overhaul Turkcell’s board to boost the $3 bln group’s valuation. Turkey’s state wealth fund, which appoints most of the directors, looks an obstacle. With stakes in other ailing companies like Turkish Airlines, it’s proving a poor custodian.
China’s next debt crisis will be municipal 10 Jan 2022 Local government investment vehicles owe $8 trillion, over half national GDP, and are big dollar bond issuers. Collapsing property sales and Omicron stress are squeezing them. Beijing may let some default; others might try to dump assets in a weak market. It could get ugly.
Southeast Asia still loves New York 10 Jan 2022 While U.S.-listed Chinese companies move home, Indonesian and Vietnamese startups are eyeing a berth in the Big Apple. Unlike their northern peers, these hopefuls are starting with home floats. Ensuring IPOs fill local coffers first is good politics and makes financial sense too.
A pre-pandemic U.S. job market is a long way off 7 Jan 2022 Employers added over 500,000 jobs per month in 2021, and the jobless rate fell to 3.9% in December. Yet there's further to go, and it's increasingly hard to fill positions. Nurses and others beset by in-person Covid-19 risks have quit in droves. The economy remains off-kilter.
Disney can follow WarnerMedia breakup blueprint 7 Jan 2022 Mickey Mouse’s parent company has a sprawling business that, like AT&T’s soon-to-be-former content service, isn’t getting full credit for its value. WarnerMedia’s decision to ditch one of its networks has sticking points. But Disney could benefit from doing a spinoff 2.0.
Nelson Peltz needs to choose his asset manager 7 Jan 2022 The activist's Trian wants board representation at Janus Henderson, backed by its 17% stake. But Trian also owns 10% of Janus competitor and potential merger partner Invesco. If it came to a deal between the two, Peltz would look conflicted and that could discredit his arguments.
Boris Johnson has Europe’s biggest energy headache 7 Jan 2022 Customers across Europe are braced for higher utility bills, prompting governments to divide the pain between users, suppliers and the state. But Britain faces the biggest hike and has done the least to cushion the blow. That makes the prime minister’s position more perilous.
Pricey oil gives Kazakh investors emergency cover 7 Jan 2022 Russia sent troops to quash a revolt in its neighbour. Even if President Tokayev keeps his job, energy majors like Chevron and Shell will fear fallout from the unrest. With the state reaping the rewards of oil at $80 a barrel, there’s less incentive to renegotiate their terms.
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.