Capital Calls: Tech trustbusting, Fresenius 22 Feb 2023 Concise views on global finance: After fighting a slew of deals, the U.S. FTC decided not to challenge Amazon’s $3.9 bln acquisition of One Medical, while the sprawling $17 bln German conglomerate is cleaning up its messy structure in a tentative step toward breaking up.
Euronext may have to dig deeper to snare Allfunds 22 Feb 2023 The 8 bln euro exchange offered 5.5 bln euros for the wealth technology group, the latest in a slew of deals. Boss Stéphane Boujnah would get much-needed diversification away from sluggish markets. Yet the price is not a knockout, and rivals like Deutsche Boerse could barge in.
Robinhood’s stock awards tell a cautionary fable 22 Feb 2023 The stock-trading app’s founders just gave back an $806 million bonus linked to certain share-price targets. An accounting quirk means the company must pay for it anyway. It’s one reason such outlays are a bad way to reward executives, as GE and others have learned.
Picking crypto exchange winner is a fool’s errand 22 Feb 2023 As questions about Binance mount, $15 bln Coinbase is benefiting. Despite swinging to a loss last quarter, its shares have doubled this year. If anything, it’ll be the smallest loser. The industry’s post-FTX fate increasingly rests with U.S. regulators, who are losing patience.
Stellantis has well-padded airbag for car crunch 22 Feb 2023 The Jeep maker’s operating income hit record levels in 2022, but it faces weaker demand from punters and rising competition. Still, CEO Carlos Tavares’s cost cutting and low exposure to China give cause for positivity. Those pluses aren’t reflected in the Stellantis share price.
UAE gas IPO’s $50 bln valuation looks like a floor 22 Feb 2023 The Emirates’ energy giant ADNOC is selling at least 4% of its gas processing arm via an Abu Dhabi listing. As with Saudi Aramco, buyers will have to put up with minimal say on strategy. Unlike Aramco’s IPO, the mooted $50 bln valuation may be an underestimate.
TCI’s Airbus fury may have collateral benefit 22 Feb 2023 Hedgie Chris Hohn says the plane maker’s plan to buy a 30% stake in Atos’s cyber arm will destroy value. He’s probably right, but private investors take a back seat in defence deals, where governments call the shots. His salvo might however help Airbus drive a harder bargain.
Energy transition’s $12 bln deal becomes forex bet 22 Feb 2023 Brookfield and MidOcean have reduced their offer for Australia’s coal and gas-heavy Origin Energy, but only by 1%. Large investors also will be paid partly in U.S. dollars. If exchange rates move only slightly, it would more than compensate them for the price cut.
Kyocera chief’s China swipe is half-convincing 22 Feb 2023 Hideo Tanimoto, who leads the $19 bln Japanese chip supplier, said the country is not a “viable” export manufacturing base. That’s hyperbole, but a winnowing of foreign firms in China is likely. Politics is a factor, but financial and competitive realities are more important.
K-pop showdown amplifies shareholder voices 22 Feb 2023 A hostile takeover of South Korean music label SM by rival Hybe, which manages global boy-band sensation BTS, is heading to a ballot. The fierce saga exposes corporate governance woes that plague Asia, but also some unlikely progress. Whichever side prevails, investors win.
Walmart’s ho-hum is the new fabulous 21 Feb 2023 The $390 bln retailing giant said its next fiscal year isn’t going to be great. Low growth and slim margins would typically be concerning. But it turns a profit, which can’t be said for Amazon’s retail business. Plus, Walmart doesn’t have tech stink attached to its name.
Treasury game of chicken will keep being less fun 21 Feb 2023 Investors in six-month T-bills had been at odds with the Fed’s plans to raise rates. That spread narrowed recently after the market did a U-turn. But investors still collectively think rates will be lower than what the Fed is projecting. Those that stay stubborn will regret it.
Supersized restaurant valuation gaps due to shrink 21 Feb 2023 As fears of an economic slump persist, consumers may swap Chipotle and its peers for cheaper fare served up by the likes of Taco Bell. Higher labor and ingredient costs are squeezing all eateries, but the premium investors pay for ones higher on the food chain looks overcooked.
War puts defence firms on investors’ radar 21 Feb 2023 The Ukraine conflict is prompting once-wary capital to engage with defence and aerospace companies. In this Exchange podcast Lorenz Meier, CEO of drone software firm Auterion, accepts ethical issues remain. But defence tech startups should brace for new venture capital cash.
Capital Calls: Starbucks 21 Feb 2023 Concise views on global finance: The $123 billion coffee chain’s new patent filing speaks to popular TikTok campaigns for more bespoke beverages – and other labor challenges.
HSBC turnaround party has muted morning after 21 Feb 2023 The $150 bln bank has hit the targets boss Noel Quinn set three years ago, and is enjoying a valuation close to pre-pandemic levels. But Quinn’s current ambitions seem modest compared with recent performance. His conservatism may mean the bank’s rate-rise jackpot has peaked.
Rolling EU debt would boost investment and markets 21 Feb 2023 European Union bonds to fund 900 bln euros in pandemic aid have cheered investors. The bloc needs ongoing debt sales to buoy traders’ confidence, invest cross-border and challenge the U.S. dollar. Separating borrowing plans from spending rows could make the politics possible.
BHP investors aren’t seeing the wood for the trees 21 Feb 2023 Boss Mike Henry is upgrading the $170 bln miner by selling its most polluting units, buying more energy transition metals and speeding efficiencies – while digging up good results. But shareholders eager for quick fixes don't appreciate the shift in how the giant is operating.
China’s local debt bomb fuse starts offshore 21 Feb 2023 Regional financing vehicles owing $9 trln have tapped offshore bond markets after officials curbed domestic financing. Now that channel is narrowing too, which could topple some into default. Many are rated investment grade, making it a major headache for Beijing.
Search for new World Bank boss flows from Barbados 20 Feb 2023 The multilateral lender needs a new president now that David Malpass is quitting early. Barbadian Prime Minister Mia Mottley’s green finance strategy offers a way to channel more lending to developing countries. Though the U.S. will have the final say, a shift is overdue.
Ukraine yet to make defence a safe investor haven 20 Feb 2023 Kyiv’s pressing call for weapons to defeat Russia dominated a top security forum in Munich. With defence budgets rising, some investors and banks are tempted to engage more with military hardware firms. For most, however, lethal weapons will remain a no-go investment zone.
ECB’s inflation-fighting hose may have a blockage 20 Feb 2023 The central bank has hiked rates by 3 percentage points since July, pushing up corporate borrowing costs and squeezing demand for credit. Yet firms and households have longer-term debt than in the past. That means tighter monetary policy will take a while to cool the economy.
Capital Calls: Shein’s ambition looks a stretch 20 Feb 2023 Concise views on global finance: The privately held Chinese fast-fashion clothing company is trying to entice investors with projections it can double revenue in three years.
Even a weak Russia is a problem for Europe 20 Feb 2023 A year after Vladimir Putin invaded Ukraine, Europe seems destined for an arms race and further economic decoupling from its neighbour. But extra defence spending, lost business and rebuilding costs will be minor compared to a scenario where Moscow crushes Kyiv, says Hugo Dixon.
Subway’s turnaround to-do list is a foot long 17 Feb 2023 The sandwich maker’s global store count is almost as big as McDonald’s, yet as it seeks new owners, its mooted $10 bln valuation pales in comparison. It doesn't help that Subway's U.S. shops each pull in only an eighth as much in sales as their golden-arched rival’s.
Returning pharma CEO has one prescription: M&A 16 Feb 2023 Brent Saunders ran three major drugmakers, and ultimately sold them all – one of them twice. He’s back in the corner office at $7 bln Bausch + Lomb again. The company’s earlier wheeling and dealing complicates matters, but history suggests finding a new owner is a likely outcome.
Capital Calls: UK banks 17 Feb 2023 Concise views on global finance: NatWest CEO Alison Rose is expecting a 3.2% lending margin in 2023, which is the same as she managed in the three months ending December. It means giddy bank investors may have to calm down.
Soccer’s new M&A binge will mostly benefit players 17 Feb 2023 Qatari investors are planning a $6 bln Man United offer, according to Bloomberg, while billionaire Jahm Najafi may swoop on Tottenham. Clubs are losing more of their revenue to player wages and transfers. That will only get worse as more rich owners chase scarce sporting talent.
Hermès’ “MetaBirkin” win misses the big picture 17 Feb 2023 A court ruled an artist’s digital version of the $198 bln group’s iconic Birkin bag violated trademark rights. The verdict gives luxury firms more clout to commercially exploit the metaverse. Yet the jury is still out on whether such forays will be anything more than marketing.
Missing China bank boss is the wrong big deal 17 Feb 2023 Bao Fan's disappearance wiped 30% off China Renaissance’s stock. But his boutique investment bank had already shrunk as work from clients like Didi vanished. The broader blow is to financiers waiting for new business to offset Beijing’s common-prosperity and anti-corruption push.