Wall Street faces life in China’s second tier 1 Jun 2023 Morgan Stanley, Goldman Sachs and rivals are trimming jobs in Greater China due to a slow recovery and US tensions. Even when activity picks up, boosting market share in the world’s second-largest economy will be tough. The usually dominant financiers will remain fringe players.
Target and Disney trip up on the Pride divide 31 May 2023 Their supportive positions on LGBTQ issues have attracted vocal enemies. But where Disney boss Bob Iger is stuck between employees and politicians, retailer Target is trying to placate customers. That’s the harder balancing act. Meanwhile shareholders will cast the deciding vote.
Paramount’s cast addition hints at exciting finale 31 May 2023 Byron Trott’s firm is joining scion Shari Redstone and billionaire Warren Buffett as a backer of the $10 bln media empire. Its capital infusion should help ease debt concerns for the controlling shareholder. The banker’s family-business ties also dangle the prospect of a buyout.
Overhauling US debt limit is an easy no-brainer 31 May 2023 Congress is again set to raise the cap on the country’s borrowing mere days before a default. President Joe Biden isn’t willing to abolish the ceiling, but every creditor has limits. A soft limit on the deficit, which balances the budget when crossed, would be a better safeguard.
London ash IPO comes with governance dust cloud 31 May 2023 Turkish-owned WE Soda, which makes an ingredient used for glass manufacturing, may float to cut leverage. Based on peers’ multiples, it’s worth between $6 bln and $10 bln including debt. But a big controlling shareholder, and dicey markets, mean investors may push for a discount.
Summer vote can dissipate Spain’s economic clouds 31 May 2023 Prime Minister Pedro Sánchez is gambling on a snap general election after a rout in local polls. Frictions within his ruling coalition irked voters. Strong popular backing would give him the mandate to tackle the country’s fiscal woes, pension costs and high unemployment.
Capital Calls: Prudential exit 31 May 2023 Concise views on global finance: The insurance giant’s CFO has abruptly resigned, just as new CEO Anil Wadhwani warms up.
Chinese battery cash will fuel Europe’s EV drive 31 May 2023 The country’s investments in foreign plants and projects to power electric cars quadrupled to $15 bln, chiefly into the EU. Over-reliance on tech leader CATL and its compatriots is a risk. But European rivals are few and carmakers like VW and BMW have more to gain than lose.
Olam’s Saudi-Singapore IPO is food for the future 31 May 2023 A $1 bln dual listing of its agri unit is delayed. A pause may help Saudi justify what it paid for a 35% stake. Yet the float will improve the company’s financial strength and its ability to shore up food security in the Gulf, so there’s good reason to get this complex deal done.
Elon Musk is Beijing’s ideal foreign investor 31 May 2023 Officials rolled out the red carpet for the billionaire’s first visit since 2020. His EV investments stimulated local brands, he’s made Twitter amenable to authoritarians, and he shows the People’s Republic is still investable. That buys Tesla lots of political cover in China.
Nvidia crashes $1 trln party, perhaps not for long 30 May 2023 While tech firms like Apple and Amazon slogged their way to the stratosphere, the chipmaker’s ascent to mega-stock status has been fast and choppy. It has been propelled by two surges – a supply shortage and an AI boom. That may give it a more tenuous grip in the 13-figure club.
Shrinking VC clique will hurt returns 30 May 2023 Investors in venture capital funds and startups are doubling down on familiar faces and shutting the door on newcomers amid tightening economic conditions. Their reticence could change which companies receive funding and hurt returns.
Petrol station tycoons’ debt fix has hidden flaw 30 May 2023 The Issa brothers are shifting UK filling stations to their Asda supermarket chain for $3 bln. The deal helps prop up their balance sheet and possibly expand elsewhere. But it leaves the grocer with extra costs and exposure to a sector at risk from the rise of electric vehicles.
ECB’s crisis tool works best if it’s never used 30 May 2023 The European Central Bank is touting its powers to buy sovereign bonds if they come under attack from the market. That has kept traders in check, so far. The trick for Frankfurt officials is to convincingly threaten to deploy emergency measures without ever having to.
Russia writedown is Raiffeisen’s best option 30 May 2023 The Austrian bank may spin off its profitable Moscow-based unit. The new Vienna-listed lender could struggle to operate given sanctions, shrinking its depressed value further. Stomaching a 4.1 bln euro loss would force Raiffeisen to atone for years of mindless Russian expansion.
Capital Calls: US debt deal 30 May 2023 Concise views on global finance: The pending deal for raising the debt ceiling would shift $20 billion out of the government’s tax collector. The move eases some short-term budget pressures, but could surrender a seven-fold payoff down the road.
India’s moment is obfuscated by its jobs deficit 30 May 2023 The country is establishing itself on the global investment map. In this Exchange podcast, author and ex-IMF director Ashoka Mody talks about why executives should look at India’s underemployment problem instead of focusing on its 7% GDP growth as they size-up the opportunity.
Syngenta’s IPO is more relief than triumph 30 May 2023 The agritech giant’s $9 bln listing looks ripe. State players will handhold it to the bell and proceeds will help cut debt from its parent’s costly 2017 buy. Sadly, the poster child of China’s acquisitions abroad has few to inspire, and not many foreign investors are invited.
Erdogan win sends stark note on economy and votes 29 May 2023 People in Turkey effectively opted to prolong the president’s wild policies that have led to 44% inflation. The extension of his 20-year rule tees up the country to inch further away from the West. For global leaders, it’s a warning that success in money matters only goes so far.
Capital Calls: Saudi Arabia and the BRICs 29 May 2023 Concise views on global finance: The oil economy is in talks to become the ninth member of the Shanghai-based “BRICS bank”, another sign of Middle East money stepping up to fill gaps in Asia created by Western-led sanctions.
Pinduoduo’s “global” brand masks identity crisis 29 May 2023 The $95 bln group is trying to disassociate itself from China as overseas suspicion of Beijing’s influence over apps rises. As with TikTok, relocating corporate structures is unconvincing. True separation means costly overhauls to supply chains, data practices and more.
How US allies can mitigate Trump 2.0 29 May 2023 A return to the White House for the pro-Putin, protectionist and climate-sceptic former President would pose many challenges for other rich democracies. Their best insurance is to ramp up support for Ukraine, promote trade and speed up action on global warming, says Hugo Dixon.
Biden gives little, gets less in debt ceiling deal 28 May 2023 The White House reached an agreement with Republicans to raise the debt limit for two years. The deal will avoid a big knock on Biden’s reelection plans, but the victories end there. Spending caps and social-aid restrictions give Democrats little else to cheer.
Economic stability hangs on US love of BBQ 26 May 2023 The US government is racing to ink a deal to avoid default ahead of the long weekend that marks the start of summer. Agreeing on how to handle the debt ceiling would relieve US creditors and calm markets. The rush will almost certainly leave big problems unfixed.
Glencore’s Bunge redux may yield Teck benefits 26 May 2023 The Swiss commodity giant could merge the agri-trader it part-owns with its $14 bln US-listed peer. A Bunge deal would be oddly timed, and Glencore has other ways to raise cash. But the bid may offer a way to spur Glencore’s share price as it mulls a new offer for Canada’s Teck.
Capital Calls: Lufthansa/ITA 26 May 2023 Concise views on global finance: The 11 bln euro German carrier pays 325 mln euros for a 41% stake in the airline born from the ashes of Alitalia.
AI speed benefits now apply to EU boycott U-turns 26 May 2023 On Wednesday Sam Altman threatened to quit Europe if it “over-regulates” his booming startup OpenAI. He’s now rapidly rowed back. As with their disruptive new technology, AI mavens may have a shrewder sense than older US peers of when to stop poking the Brussels bear.
Central bankers face a balance sheet reckoning 26 May 2023 Assets held by central banks have exploded since 2008. As interest rates rise, some of those institutions are slipping into the red. We’re told normal accounting rules do not apply. However, losses erode inflation-fighting credibility and independence, argues Edward Chancellor.
Illumina shareholders vote for lose-lose outcome 25 May 2023 Carl Icahn scored a seat on the $30 bln biotech’s board, but fell short of the three he sought. Boss Francis deSouza won re-election but must now deal with the activist’s lieutenant. And newer investors hoping Illumina was in for a big shake-up will be disappointed. No one wins.
Nvidia investors price in seven years of AI glory 25 May 2023 The semiconductor firm’s worth surged to $940 bln on hopes it will win from artificial intelligence. CEO Jensen Huang has an astonishing record, with earnings growing 20% annually for two decades. But Nvidia will have to maintain this pace until 2030 to justify its valuation.