Austrian bank short attack is watchdog’s nightmare 30 Jun 2023 BAWAG shares fell 8% after hedge fund Petrus said the lender had a shoddy business model and poor governance. Sector-beating returns make it a tough target. But following this year’s bank runs, regulators will fret that such campaigns could become a self-fulfilling prophecy.
Ukraine can rebuild without a Russian asset grab 30 Jun 2023 Using Moscow’s frozen assets to fund Kyiv’s $400 bln-plus recovery risks violating the rule of law. Suing Russian entities for the damages brought by the war is more promising. It allows Ukraine to build up claims that would be part of future peace talks.
The next revolution in monetary policy is underway 30 Jun 2023 Central banks are grappling with rising prices and fragile financial markets, raising doubts about their focus on price stability. Recent interventions by the International Monetary Fund and Bank for International Settlements are signs of a broader rethink, says Felix Martin.
Capital Calls: KKR’s reluctant bidding war 30 Jun 2023 Concise views on global finance: Despite pushing arguments about antitrust and financing risks, the buyout shop ended up parrying a rival suitor for industrials company Circor by matching it on price.
India’s push to democratise credit tests limits 30 Jun 2023 It’s shaping its digital payments system, which supports 9 bln consumer transactions a month, into a loan engine. Homegrown card operator RuPay and fintech Paytm are winners. But growth in unsecured credit is blistering and the regulator is delivering mixed messages on the risks.
Alphabet threats show up everywhere but its shares 29 Jun 2023 The Google-owner’s valuation has powered ahead as it touts its prowess in artificial intelligence, in spite of mounting menaces. A report questioning Google's video ad sales compounds ongoing antitrust threats, and even AI might not be an unalloyed good.
Resetting student loans brings Econ 101 lessons 30 Jun 2023 Some 43 mln college grads may feel less confident financially with the Supreme Court striking down President Joe Biden’s debt forgiveness plan. Big chunks of income are no longer freed up. Payments also start anew soon after a Covid hiatus, adding another drag for many consumers.
US banks gird for dose of post-stress-test trauma 29 Jun 2023 Big lenders breezed through their annual examinations but will soon be walloped with new rules that could force them to hold one-fifth more capital. Some of that looks like overkill. But watchdogs bruised by recent bank failures may see that as a feature, not a bug.
UK water meltdown resurrects bank crisis dilemmas 29 Jun 2023 The government may take over indebted 18 bln pound utility Thames Water. Funding a big potential capital hole via bills and taxpayer cash injections could be as politically toxic as 2008-era bailouts of RBS and peers. But imposing losses on creditors may spark even more turmoil.
Capital Calls: US IPOs 29 Jun 2023 Concise views on global finance: Thrift store chain Savers Value Village is the latest consumer goods company to enjoy a successful stock market debut in New York.
Putin’s problems are only minor boost for Ukraine 29 Jun 2023 The Russian president restored a semblance of calm in Moscow after an aborted mutiny. In this Viewsroom podcast, Breakingviews columnists debate what this means for the country’s invasion of its neighbour. It’s helpful, but not necessarily transformative, for Kyiv’s resistance.
Central banks’ calls for pay restraint ring hollow 29 Jun 2023 Western central bankers want workers to ask for lower raises unless firms cut their margins to compensate staff. With salaries growing less than inflation, that’s a harsh demand. Past rate rises will in time cool labour markets. Officials need to talk less and wait longer.
Swire’s Coca-Cola sale gives investors sugar rush 29 Jun 2023 Handing its US drinks subsidiary to its parent for $3.9 bln allows the Hong Kong conglomerate to pay a tasty dividend, cut net debt and still run the division for a fee. It’s a sweet deal for investors, as long as property, airline Cathay Pacific and other holdings recover soon.
Macau wannabes risk being short of gamblers 29 Jun 2023 Japan and the UAE will soon have legal casinos; Thailand may follow. In theory Wynn, MGM and peers will have around $12 bln of new annual revenue to play for, more than Macau has raked in this year. But newcomers can’t rely on Chinese punters and their home markets are untested.
KKR adopts M&A’s new rules in bidding war 28 Jun 2023 A smaller private equity shop is gatecrashing Henry Kravis’s firm and its $1.7 bln deal to buy industrial company Circor. KKR’s response: offer more certainty, not a better price. Hawkish regulators and shaky debt markets are changing dealmakers’ priorities.
Debt ballast slows cruise ships’ return 28 Jun 2023 Royal Caribbean will launch the world’s biggest ship next year, and the firm shouldn’t have trouble finding passengers. Operating profit could surge well beyond pre-pandemic levels too. But debt larded on during lockdowns will continue to weigh down cruise companies.
LinkedIn ages like fine wine in Microsoft’s cellar 28 Jun 2023 In contrast to souring Meta and Twitter, the drier social media app is flourishing. Although veiled by its parent’s cloud dominance, the 2016-vintage acquisition has tripled in value from its $26 bln price tag. Business-related data also will help it keep maturing in the AI era.
Capital Calls: Digital euro, Thames Water 28 Jun 2023 Concise views on global finance: Brussels is in a new push to convince EU member states and the European Parliament to endorse a digital euro; Britain’s Thames Water could be placed into special administration.
Hydropower IPO tests appetite for weather risks 28 Jun 2023 Hidroelectrica’s market sale in Bucharest could value the renewable energy supplier at 10 bln euros, Europe’s largest IPO so far this year. High margins, low debt and fat dividends make the offer palatable. But as droughts intensify, water scarcity may prove a headache.
Bank of Italy pick will give Italy an EU headache 28 Jun 2023 ECB member Fabio Panetta is heading home to lead the national central bank. That will remove a dove from Europe’s rate-setters, just as they pursue a hard line on inflation. To send another Italian to Frankfurt, premier Giorgia Meloni may need to compromise on Brussels issues.
Hong Kong’s market promotions get shrill 28 Jun 2023 The city’s bourse is trying to lure foreign listings from Europe and the Middle East while regulators push local lenders to bank crypto exchanges. The first initiative is worthwhile but unlikely to yield much new business; the latter creates fresh headaches for HSBC and peers.
Pricey property is a pointy dilemma for Singapore 28 Jun 2023 Rich foreign arrivals including family offices are an easy scapegoat for house prices bucking a global slump. But Asia’s safe haven needs to keep the public onside more than other hubs like Hong Kong as it vies for global capital. The stakes of keeping everyone happy are high.
Brookfield finds it’s no fun to be half-married 27 Jun 2023 The private equity firm bought a stake in American Equity with a view to working together, but got disgruntled when the annuity provider partnered with a rival. Now Brookfield wants to buy the whole company for $4 bln. It’s the simplest way for both sides to get what they want.
AI’s deflationary winds will blow away profits 27 Jun 2023 Artificial intelligence could add $8 trln a year to world GDP, McKinsey estimates, defying the gloom about robots replacing humans. Though companies should benefit from lower costs, consumers could use the technology to find better deals. It all adds up to lower prices.
Prosus’ juggle leaves bigger worries up in the air 27 Jun 2023 The $147 bln Dutch investor is ending its complex shareholder structure with South African parent Naspers. It’s simpler for investors, and enables more buybacks. But the group will still have a stake in Tencent it can’t easily sell and lopsided governance, meriting a discount.
UK banks are appropriate airbag for mortgage crash 27 Jun 2023 British politicians are starting to call out lenders that have delayed passing on higher rates to savers, even as they charge borrowers more. Bank share valuations already implied such windfalls might be temporary. The sector’s rising margins justify some political arm-twisting.
Why backing prevention can yield better health 27 Jun 2023 Treating illnesses like cancer consumes 11% of global GDP, according to the World Health Organization. In this Exchange podcast, Dr. Katie Tryon, director of healthcare strategy at Vitality, explains that overburdened care systems need to spend their way back into shape.
Capital Calls: Eli Lilly gorges on obesity options 27 Jun 2023 Concise views on global finance: The drugmaker found patients losing an incredible 24% of their weight on one of its latest treatments. First-movers don’t always win out in pharma, however, as Pfizer proved with Lipitor. That’s why Lilly is wise to keep investing in alternatives.
Tokyo’s $7 bln buyout dials up global chip wars 27 Jun 2023 A state-backed fund’s pricey purchase of semiconductor materials maker JSR will help the Japanese industry shaken by geopolitical jitters build national champions rather than lose to foreign rivals. For customers from Samsung to Taiwan’s TSMC it spells more uncertainty.
Big Tech backlash swells the AI gold rush 26 Jun 2023 Cloud provider Databricks is buying a machine learning startup for $1.3 bln, almost six times its valuation earlier this year. Models backed by Microsoft and Google dominate artificial intelligence. But a bet that companies want to control their data is pumping up smaller rivals.