Tycoon-burned Sun Cable would shine with new owner 1 Feb 2023 Top backers Andrew Forrest and Mike Cannon-Brookes may compete to buy the insolvent solar power export firm. They are pursuing risky plans. Keeping the energy in Australia should allow rival mooted bidders like Macquarie and Iberdrola to pay more and generate better returns.
Gautam Adani’s next hurdles may be harder to clear 1 Feb 2023 Friendly investors and rich families pulled the Indian tycoon’s $2.4 bln share sale over the line. The feat will be hard to repeat. Adani group faces refinancing pain, more scrutiny from auditors and possible pressure from domestic regulators. It all acts as a brake on growth.
Leery buyers put screws to U.S. homebuilders 31 Jan 2023 Pulte, which constructs more upscale houses, lifted quarterly sale prices 17%, but D.R. Horton and Lennar sacrificed operating margin to offload homes. High interest rates are keeping 80% of Americans downcast about the market. Optimistic valuations tell an oddly different story.
Big oil can be lean and not mean 31 Jan 2023 Net debt at Exxon and Chevron declined nearly $50 bln last year, and both are on path to having no debt at all. Neither seem inclined to lever up given oil’s murky and volatile future. But excess cash must go somewhere. Shareholders are in line for big payouts.
Pfizer goes back to the pharma meat-grinder 31 Jan 2023 Its warning that revenue will fall by one-third this year is a return to pre-pandemic doldrums, where pharma companies wrestled with the meager, declining returns of developing new drugs. The best shot for Pfizer and peers is to focus new technology on hard-to-treat diseases.
Global supply chain scars will spark sea change 31 Jan 2023 The business of shifting goods around the world plunged into chaos during the pandemic. In this Exchange podcast Alan Murphy, boss of researcher Sea-Intelligence, explains China’s changing role in global trade and how that impacts the price of everything from iPhones to cars.
UniCredit’s share-price surge has further to run 31 Jan 2023 Boss Andrea Orcel wants to hand more than 5 bln euros to investors through dividends and buybacks, after reporting stellar 2022 earnings. Further Russia writedowns are a risk, but the bank’s bottom line looks solid. A valuation of just over half tangible book value looks too low.
Petrol tycoons’ debt juggle may be a deal too far 31 Jan 2023 The Issa brothers may mesh their grocer Asda together with the UK arm of their gas pump operator EG Group. A deal, worth say 3 bln pounds, would help the shaky forecourt business cut debt, and ease a refinancing cliff. But it would leave the supermarket weaker, amid a price war.
UBS boss Ralph Hamers has a growth problem 31 Jan 2023 Revenue in the Swiss bank’s wealth-management core slid 2% in 2022, as markets fell. Higher interest rates and China’s re-opening will ease the pain, but not for long. Hamers is running short on credible ways to get the top line moving, undermining his hunt for a valuation boost.
Euro zone can afford to keep fiscal taps running 31 Jan 2023 The bloc’s governments pumped up spending by 3.75% of GDP over the past two years to cushion the blow of Covid-19 and higher energy prices. Now they are closing the spigots. That’s a mistake. Manageable debt costs leave room to support growth – and help the ECB fight inflation.
Adani re-ups India’s emerging market risk 31 Jan 2023 Strong economic growth and a booming population have put the country on investors’ radars. How authorities handle the $65 bln selloff in Gautam Adani’s empire will show the market’s maturity. In the meantime, it’s a reminder of the dangers of passively tracking stock indexes.
Capital Calls: McDonald’s, Spotify 31 Jan 2023 Concise views on global finance: The burger chain’s comparable sales growth despite rising prices proves there’s pricing power at the bottom of the market; shares in the $21 bln music-streaming service leapt after founder Daniel Ek unveiled rapid subscriber growth.
Marc Andreessen has a moment to cash out 30 Jan 2023 Investors are dumping tech stocks. Venture fund returns are probably next. But firms that manage these pools of cash are still valued higher than private equity counterparts. It gives Andreessen and his VC buddies a small window to capitalize on their recent spectacular runs.
Jeff Smith makes for a substitute Warren Buffett 30 Jan 2023 The activist’s $500 mln investment backing a deal by equipment auctioneer Ritchie Bros has come under fire. His support echoes Buffett’s moves at Occidental and elsewhere. Though the Starboard boss lacks folksy shine, he might be up to playing the role in all the ways that count.
Rejigged Renault-Nissan alliance looks headless 30 Jan 2023 The French and Japanese automakers clinched a deal to save their 24-year partnership. Renault will only vote 15% of its stake in Nissan, which now has a similar say in its partner. It avoids a messy divorce, but the lack of a clear leader may make decision-making trickier.
Trying to bankrupt Russia could backfire 30 Jan 2023 Now that Western allies are supplying tanks to Ukraine, why not also ramp up sanctions on Russian oil and gas? Because doing so would carry big economic risks – and that could undermine Western willingness to continue its vital military support for Kyiv, says Hugo Dixon.
Capital Calls: TikTok’s Beltway visit 30 Jan 2023 Concise views on global finance: The social media app’s CEO Shou Zi Chew is going in front of a U.S. Congressional committee. But it’s leaders outside of Washington that Chew needs to convince.
Adani’s financing safety-net rests on Indian banks 30 Jan 2023 Gautam Adani looks locked out of capital markets after a short-seller attack wiped $48 bln off the market value of his companies and caused bonds to tumble. Indian lenders have capacity to step in. What they do next will reveal the extent of state support for the tycoon.
Goldman cuts Solomon, and his pay, down to size 27 Jan 2023 The Wall Street bank slashed its CEO’s 2022 pay by a third, to $25 mln. It comes off as less about performance than a nod to staff facing layoffs and smaller bonuses. The risk is that while employees may see solidarity, shareholders see a boss losing the confidence of his board.
Surging big-city rents reveal real estate puzzle 27 Jan 2023 The cost of renting apartments in New York, London and Sydney soared last year even as higher interest rates pressured property values. Professionals want more home-working space while students are returning to cities. Yet rents and house prices cannot diverge forever.
Intel is becoming accidental ad for friendshoring 27 Jan 2023 With plunging fourth-quarter sales and profitability, the U.S. firm may fall further behind Taiwanese rival TSMC in technology and manufacturing prowess. Intel has strategic value to a White House keen to promote U.S. chipmaking, but there are other ways to achieve that goal.
Capital Calls: AI out-buzzes the blockchain 27 Jan 2023 Concise views on global finance: Digital publishing outfit BuzzFeed’s stock surges in part because it’s using AI to help create content. But investors’ excitement is likely to be short-lived.
European gas savings success hides darker reality 27 Jan 2023 Spurred by soaring prices, the continent used 12% less of the fossil fuel in 2022. Despite a push to conserve energy, much of the drop was due to companies switching to other pollutants or shutting plants. Gas-hungry sectors like chemicals and steel face a protracted struggle.
Three carry trades for a new monetary policy era 27 Jan 2023 Central banks’ moves mean that investors borrowing money in yen and placing it in U.S. assets – a once-popular “carry trade” – are no longer onto a sure-fire winner. They can do better by shorting the euro and investing in Mexico, Brazil or Hungary.
China’s reopening generates mirage of normality 27 Jan 2023 Movie sales during the Lunar New Year holiday beat last year's to hit $900 mln as travel rebounds. The relief bounce is unsurprising, but retail growth has yet to recover to pre-pandemic levels. Scarred consumers have too many reasons to avoid splurging.
Blackstone shows scale is also a curse 26 Jan 2023 The asset manager missed its goal of gathering $1 trln, but it has more than doubled funds in five years. Its property fund recently benefited from deep pockets. Still some wobbles show why the tension between pleasing public and private investors won’t go away.
WhatsApp lesson reaches Wall Street by snail mail 26 Jan 2023 Morgan Stanley has docked pay for bankers who flouted off-channel texting rules. James Gorman’s firm had already got credit from regulators for being tough on chat-app misuse. But just as following rules shouldn’t be unusual, nor should making miscreants pay for what they broke.
Meme stocks give bankruptcy new excitement 26 Jan 2023 When a company like Bed, Bath & Beyond lurches towards failure, investors try to reckon what it would be worth after a cleanup. That’s harder when retail traders push its stock to unexpected highs, as happened to car rental firm Hertz. What was once a science has become a game.
Why retail bankers are beating dealmakers 26 Jan 2023 JPMorgan, Citigroup and Goldman Sachs’ earnings revealed that the basic business of lending money is thriving, while investment banking is not. In this Viewsroom podcast, Breakingviews columnists debate what this says about the U.S. economy and what to expect from the Europeans.
Capital Calls: Data falsehoods 26 Jan 2023 Concise views on global finance: Better-than-expected U.S. GDP and durable goods data suggest the country might be spared from a recession. But exclude Boeing sales and corporate stockpiling, and the economic outlook is less rosy.