Fed’s SVB review finds there’s no “I” in “blame” 28 Apr 2023 Its postmortem of the collapse of SVB Bank calls out timid supervisors, loopholes that made it hard to keep tabs on fast-growing firms and previous vice chair Randal Quarles’ push to cut red tape. The result is a prescription for lots of change, but not much accountability.
Glencore’s best Teck tactic is a surgical strike 28 Apr 2023 The Swiss commodities giant has little room to sweeten its $23 bln offer for the Canadian miner without hurting its own shareholders. It can, however, afford a disproportionately higher premium to the controlling Keevil family. Common-stock owners would have to see the upside.
Oil AGMs presage awkward investor decoupling 28 Apr 2023 BP sailed through its annual shareholder meeting without much blowback on how it had backtracked on climate goals. That will embolden competitors to dismiss pro-green investors’ concerns, and give more to the opposite camp. It is becoming harder to please both sides.
Orbán’s central bank attack is self-defeating 28 Apr 2023 Hungary’s premier has picked another fight with Europe by meddling with the country’s rate setter. That could complicate the release of over 10 bln euros of frozen EU aid. With sky-high inflation and zero growth, the autocratic leader may soon face a foreign investors’ strike.
Deutsche’s Numis swoop more logical than it looks 28 Apr 2023 The lender’s $500 mln purchase of the UK broker seems an odd move for CEO Christian Sewing, who once aimed to shrink investment banking. But the valuation isn’t silly, and a deal may boost Deutsche Bank’s corporate lending arm. Numis’s smaller peers may also now seek a new home.
Digital “Chicago Plan” fixes many financial woes 28 Apr 2023 In the 1930s, economists drew up a radical blueprint to create safer banks. The advent of digital currencies issued by central banks is an opportunity to revisit the idea, writes Edward Chancellor. A shift could stabilise banking, reduce inflation, and even lower government debt.
Capital Calls: Exxon, US regional banks 28 Apr 2023 Concise views on global finance: Exxon’s two golden eggs are the Permian and Guyana; market composure gives time for a First Republic fix.
Sumitomo triples down on Jefferies at right time 28 Apr 2023 The $8 bln Wall Street firm’s earnings have slumped with deal flow, so SMFG boss Jun Ohta can boost his stake to 15% at roughly the same price he paid two years ago. This time he has the benefit of knowing his partners better and can get ahead of any boom in investment banking.
India’s tycoons will weigh down Unilever’s basket 28 Apr 2023 The company’s $72 bln Indian unit is growing volume and gross margins in a sluggish market. It caps an excellent decade under outgoing CEO Sanjiv Mehta. He has set a high bar for his successor who will have to work harder as rivals from Reliance to Tata ramp up to win consumers.
Amazon gets ever more like a regular ol’ retailer 27 Apr 2023 The $1.1 trln e-commerce giant grew sales of goods faster than expected. Yet its star, AWS, is under pressure. Boss Andy Jassy is focusing increasingly on profitability. It's a familiar cycle for big retailers – but not previously for Amazon.
First Republic could make failure safe again 27 Apr 2023 Unless it can tempt a white knight, the US lender holding $230 bln of assets looks doomed. Either way insured depositors should be fine, with something left for others too. It’s important that regulators show not every bank can hold the system to ransom. This may be their chance.
Dialing it down would help overamped utility 27 Apr 2023 After a busted $2.6 bln takeover deal, expansion into Chile and a huge share slump, Algonquin Power is now contending with two pushy investors. Steady returns are the main appeal of such businesses. Spinning off the renewable energy arm would help restore some boring value.
Deutsche Boerse data pivot comes at a price 27 Apr 2023 Boss Theodor Weimer is buying fund software firm SimCorp for 4 bln euros. Like peer LSEG, the German exchange is hoping a shift into the faster-growing data business will mean richer valuations. It’s a logical gamble, but such deals are expensive, and take time to pay off.
Resolving Credit Suisse: an alternative history 27 Apr 2023 Swiss authorities merged the bank with UBS, rather than risk a financial panic by bailing in bondholders. Yet Credit Suisse was arguably unique and small enough to be wound down. Breakingviews imagines that scenario, which may serve as a template if the enlarged group ever fails.
EY’s failed split raises stakes for Plan B 27 Apr 2023 The Big Four professional services firm called off a plan to separate its audit and consulting arms. In this Viewsroom podcast, Breakingviews columnists discuss what went wrong, the implications for its rivals, and the pressure on EY bosses to show the intact business can thrive.
Capital Calls: US GDP, Eli Lilly, EU budget 27 Apr 2023 Concise views on global finance: Consumer spending provided fragile support for the US economy in the first quarter. Meanwhile pharma group Eli Lilly is racing against rising obesity expectations, and the European Commission faces German hurdles to replacing its budget rules.
Hong Kong bourse’s profit pop looks passive 27 Apr 2023 Earnings popped 28% last quarter, but mostly thanks to the exchange operator’s investments gains; its core business of listings and trading was lacklustre. Boss Nicolas Aguzin can only hope IPOs and transactions revive in case returns from HKEX’s own trades aren’t sustained.
Meta is younger dog learning newer new tricks 26 Apr 2023 Mark Zuckerberg cut enough costs last quarter to bolster margins well past expectations, adding 12% to its $530 bln value in after-hours trading. That positions it nicely against competitors pivoting to AI. The issue is that Meta’s metaverse project doesn’t look as fresh.
TikTok ban is the least palatable of options 26 Apr 2023 Montana wants to block the Chinese-controlled short-form video service from operating in the state. The White House is mulling a similar strategy. But banning the app from 150 mln US phones is hard and legally fraught. Outside of a sale, a data privacy law is the best outcome.
Britain grabs mantle of chief Big Tech deal-slayer 26 Apr 2023 The UK competition watchdog vetoed Microsoft’s $69 bln purchase of “Call of Duty” owner Activision, rejecting the software giant’s promises. Takeovers by tech titans have fizzled under scrutiny from the EU and US. This decision makes it even harder to expand by acquisition.
Capital Calls: Plan C for Teck Resources 26 Apr 2023 Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.
German $13 bln heat pump sale dents EU green hopes 26 Apr 2023 US firm Carrier Global is buying the energy unit of family-owned Viessmann. It’s a setback for German and European ambitions to create regional leaders in new technology. Yet for continental groups to compete globally, loss of control may be a necessary price.
Dollar bulls are praying for a mild downturn 26 Apr 2023 The greenback has lost 14% versus the euro since September, as investors bet on Europe’s recovery and China’s reopening. Inflation and interest rate trends still favour the single currency. The best hope for the buck is a minor economic slowdown to boost its safe haven status.
StanChart shareholders look too blinded by history 26 Apr 2023 The $22 bln bank’s near-12% equity return last quarter breezed through boss Bill Winters’ 2024 target. His mostly unimpressive track record is a concern, as is slowing economic growth. But investors value the lender at just half its book value. That’s overly pessimistic.
MGM’s bet on Asia’s next Macau may age well 26 Apr 2023 The US casino operator will open Japan’s first casino. It isn’t an obvious destination for gambling: Sands and Wynn stayed away, preferring Singapore and the UAE. But the Osaka resort could be as big a money spinner for the operator as its properties in the Chinese hub.
Tech giants bury mediocre results under AI hype 25 Apr 2023 Microsoft and Alphabet beat low expectations, but slowing growth and penny-pinching to juice profit don’t make for the world-changing narrative tech investors usually crave. Touting the promise of artificial intelligence scratches that itch – and supports their valuations.
Capital Calls: News anchor carnage 25 Apr 2023 Concise views on global finance: Fox News and CNN parted ways with star anchors Tucker Carlson and Don Lemon, respectively. The abrupt exits reflect an emerging identity crisis for the cable news business as the ratings boost provided by the Trump administration fades.
Coinbase will force SEC to quit ghosting crypto 25 Apr 2023 It’s been eight months since Coinbase asked securities watchdogs to clarify how digital assets will be regulated. Now the world’s second-largest crypto exchange is suing for an answer. The legal battle will decide the fate of the trillion-dollar cryptocurrency industry in the US.
Debt crisis is a scary white swan for US economy 25 Apr 2023 The US debt ceiling is Biden’s first re-election test, but Washington has made little progress toward averting a government default. Flirting with the deadline in 2011 rocked the financial system. Partisan bickering could inflict pointless and predictable harm on fragile markets.
New UBS investor pitch fits better than old one 25 Apr 2023 Rescuing Credit Suisse is a risky move. But first-quarter results show that the buyer’s existing business is struggling to grow. The merger offers large savings and creates a wealth giant with $3.5 trln of assets. The return of proven cost-cutter Sergio Ermotti as CEO helps.