Virgin Australia IPO relies on Qantas flight path 20 Jan 2023 Bain Capital may relist the carrier it bought in 2020 as travel revives and rivals’ shares rally. Virgin could be worth $800 mln if it replicates the projected juicy margins and growth rates of its larger rival. If not, the private equity firm might wait in the departure lounge.
Toshiba buyout heralds a big step back for Japan 20 Jan 2023 A deal for the $15 bln conglomerate is finally in sight. Foreign investors, who agitated for years, are likely to sell control back to local owners less inclined to shake up a national icon. Domestic policy shifts may also stifle local private equity before it can get rolling.
Netflix will gain from Facebook and Google pain 19 Jan 2023 The TV-streaming service is rolling out an ad-supported plan just as the tech titans lose digital market share. Making the strategic shift work will now be partly up to new co-CEO Greg Peters. At least Reed Hastings helped put the company in position to nab social-media spending.
TikTok’s best U.S. charm offensive involves an IPO 19 Jan 2023 The social media firm owned by China’s ByteDance wants to appease concerns about its access to Americans’ data. If proposed fixes get past federal officials – no sure thing – it still must contend with state leaders. A stock market listing would add some helpful transparency.
Fintech fight tests Fed’s transparency mission 19 Jan 2023 The Federal Reserve will soon disclose which firms it approves for valuable master accounts. It’s the latest in the central bank’s push toward greater transparency, but change has been slow. Fintechs seeking master accounts of their own will check the Fed’s sincerity.
Hope and optimism are surprise guests at Davos 19 Jan 2023 Business leaders like Bank of America’s Brian Moynihan and Microsoft’s Satya Nadella are attending this week’s World Economic Forum. In this Viewsroom podcast, Breakingviews columnists give a view from the ground, debate the upbeat tone and explain why politicians stayed home.
Snam rethink reflects Europe’s new energy reality 19 Jan 2023 The $18 bln network operator is hiking spending to boost gas flows into Italy and the EU. Stable revenues from such investments can help new CEO Stefano Venier lift EBITDA. But a lighter push into hydrogen and green projects suggests a slower European shift from fossil fuels.
UK reaches limits of drug penny-pinching 19 Jan 2023 AbbVie and Eli Lilly pulled out of Britain’s pharmaceutical pricing agreement, due to shrinking returns. The UK’s single health service helps it play hardball with Big Pharma. Yet drug research is collapsing, hurting jobs and citizens’ health. There’s a case for spending more.
Capital Calls: Dr. Martens’ stomping 19 Jan 2023 Concise views on global finance: The bootmaker’s stock fell nearly 30% after a profit warning on Thursday, and is down 60% since Permira listed it in 2021.
Indian IT reboots in time for an easy recession 19 Jan 2023 Quitting workers hurt profitability at service providers from Tata to Cognizant. But the drying up of startup funding has reduced job hopping. That will make any slowdown in spending by global clients easier to manage, leaving India to keep taking market share, at least for now.
AGL’s new boss has a $14 bln target on his back 19 Jan 2023 That’s how much Damien Nicks needs to turn Australia’s top carbon emitter into a renewables giant. Unlike predecessors, he has a proactive board, improving earnings and a half-placated billionaire agitator. He’ll still get hauled over the coals if he can’t find funds quickly.
Macau bounces into Year of the Rabbit 19 Jan 2023 Spring has sprung in the casino hub with the end of China’s zero-Covid. Operators will return to profit. Yet from Sands to SJM, balance sheets are stretched. How quickly they are repaired depends on if punters spend as much as before. Pandemic policies will leave other scars too.
Helicopter-share backer books a cheap return trip 18 Jan 2023 Private equity firm RedBird has taken a 5% position in Blade, adding to the stake it bought when the Hamptons-shuttle operator went public in a blank-check deal. Blade stock has slumped but its revenue is growing. The SPAC rout may have thrown some babies out with the bathwater.
Disney investors pay twice for half-leadership 18 Jan 2023 Between outgoing chief Bob Chapek and returning CEO Bob Iger, the media giant earmarked $60 mln in pay and severance for last year. By contrast, Apple boss Tim Cook is in line for a downsized $49 mln this year. Disney’s generosity is at odds with its poor succession planning.
Thrifty holidays lift odds of a soft U.S. landing 18 Jan 2023 Spending at U.S. retailers and restaurants slid 1.1% in December, marking the largest drop in a year. High prices and shrinking savings are finally leading Americans to rein in their demand. It’s a promising sign that the U.S. can beat inflation without a severe downturn.
Bank of Japan has learnt danger of half-measures 18 Jan 2023 The central bank’s decision to stay put on interest rates saw the yen soften and hurt 10-year bond yields. Last month’s surprise tweak to bond trading bands failed to impress traders. Inaction may be painful and expensive, but muddled economic signals make it understandable.
EQT embodies private markets’ two big problems 18 Jan 2023 Shares in the $28 bln buyout group fell 6% after CEO Christian Sinding flagged a fundraising slowdown. Another issue is that, like its rivals, the Swedish firm spent big when asset prices were high. Its relatively steady fund valuations may not yet reflect all the future pain.
China’s demographic decline can be boon, not doom 18 Jan 2023 Last year’s near-1 mln population drop puts India in position to become the most populous country. It’s not necessarily a problem for Beijing. Adapting policy from social safety nets to immigration could prevent higher ages and wages from defining the $18 trln economy’s future.
Capital Calls: Activism, Bond spat, Airline M&A 18 Jan 2023 Concise views on global finance: Aggressive shareholder campaigns picked up in 2022, but activism is becoming an overcrowded strategy. Meanwhile, M&A machine Melrose takes on a fight that might not be worth winning, and German airline Lufthansa eyes a stake in Italy’s ITA.
Emerson’s hostility tests aggressive M&A tools 17 Jan 2023 Disclosing its unsolicited $6.9 bln offer for NI ends a quiet eight-month standoff. Going public forces the issue, but along with the target’s strategic review also inflates the price. A bid battle threatens the potential value of a deal and may inform takeover tactics elsewhere.
Goldman slams into unwelcome sort of volatility 17 Jan 2023 The investment bank’s push into consumer lending was meant to bring stable growth to balance out trading swings. Instead, it has done the opposite, losing $4 bln and counting. Belated, patchy disclosures don’t help, nor does archrival Morgan Stanley’s wealth management success.
How to navigate a bewildering market landscape 17 Jan 2023 The pandemic boom lured in new and younger investors. Now interest rates are up, asset prices are down, and ESG investing faces a backlash. In this Exchange podcast, Morningstar CEO Kunal Kapoor talks about personalising investment, the value of data, and taking the long view.
Capital Calls: British jolt 17 Jan 2023 Concise views on global finance: The collapse of UK battery group Britishvolt leaves a gaping hole in the country’s auto manufacturing sector.
Expansionist dreams threaten ECB digital euro plan 17 Jan 2023 As the European Central Bank develops its own online currency, politicians want a big say. Hostility from some rubs against the ECB’s cautious enthusiasm. Yet if political forces push a digital euro to be more global than the ECB is ready for, it may weaken financial stability.
Chinese GDP surprise sets expectations too high 17 Jan 2023 The world’s second-largest economy grew 3% in 2022, the government reported, beating forecasts but way below target. Ending consumption-suppressing policies removes drags on growth. With fiscal coffers low, though, and debt and inflation rising, China is short on stimulus tools.
Vodafone dials up India’s inefficient debt market 17 Jan 2023 Its top creditor, the government, is dithering on restructuring the telecom operator’s $27 bln of borrowings. A sustainable fix would leave New Delhi owning the company. What politicians do next will determine how deep India’s fight against bad debt goes.
UK has wrong approach to EU-style strike limits 16 Jan 2023 British PM Rishi Sunak wants to force minimum service levels during public sector strikes, as exist in the rest of Europe. But the plan is too broad and coercive, looking like a knee-jerk reaction to the current unrest. It needs to be better thought-out, in a pacified atmosphere.
European stocks will defy bonds’ revival 16 Jan 2023 In the past decade, Western equities delivered far better returns than bonds. An ongoing central bank crusade to fight inflation points to a fixed income comeback in 2023. Yet cheap valuations and ECB rates hesitancy will help European stocks steal a march on local bonds.
The fog in the English Channel is clearing a bit 16 Jan 2023 Britain won’t rejoin the EU soon, despite voters’ regrets over Brexit. But if the two sides resolve a Northern Ireland dispute there could be progress on topics such as climate, foreign policy and financial services. Much may have to wait for a new UK government, says Hugo Dixon.
China policy pendulum swings towards speculators 16 Jan 2023 President Xi Jinping wants homes for living, not for leveraged get-rich-quick schemes. But demand for primary residences alone can’t revive growth given property drives 25% of the $18 trln economy. Xi’s willingness to sacrifice financial performance for ideals faces another test.