Peak oil is another reason to shun OPEC club 26 Jun 2023 The oil-producing organization wants Guyana to join, but the tiny South American nation prefers to pump while it can. Cartels are difficult to maintain at the best of times because members can cheat. When future demand is finite, there’s even less incentive to cooperate.
Capital Calls: Blackstone’s bright property sale 26 Jun 2023 Concise views on global finance: The investment firm led by Steve Schwarzman is selling a group of warehouses to Prologis for $3 bln, demonstrating that some parts of the troubled commercial real estate industry are holding up.
Markets are far from pricing in peace 26 Jun 2023 Germany’s Rheinmetall and other defence shares fell after an aborted Russian mutiny. Domestic instability may shorten the Ukraine war, curtailing lucrative contracts. Yet chaos in Moscow, Western tensions with China and rising cyberthreats will keep the world amply unsafe.
Europe has more Russian lessons to learn 26 Jun 2023 Yevgeny Prigozhin’s failed mutiny rams home the EU’s need to protect itself from trouble abroad. Leaders meeting this week in Brussels are thinking in more geostrategic terms and may now agree a China policy. But until they act as a bloc they will lack clout, says Hugo Dixon.
PwC cauterisation Down Under leaves infection risk 26 Jun 2023 The accounting firm’s Australia outfit hopes a new CEO and the sale of its government advisory unit for less than one dollar will stem a conflicts of interest scandal. With a tainted brand and probes continuing it’s unlikely. Keeping the fallout in-country would be a victory.
Indonesia IPOs hitch a dicey electric-car ride 26 Jun 2023 New listings more than doubled to $3 bln this year, beating Hong Kong and London, as firms cash in on the nation’s growing status in electric-vehicle supply chains. But deals are marred by weak secondary market performance and political risks loom. The boom looks unsustainable.
Time for world to dust off its post-Putin plans 26 Jun 2023 The Russian president has been humiliated by his former protégé Yevgeny Prigozhin’s failed coup. Whether he clings to power or is eventually shunted aside, he looks wounded. When weighing up the consequences, global powers should expect the worst but prepare for the best.
Tesla vs. Meta cage fight already has a winner 23 Jun 2023 The tech giants’ bosses are planning a literal fistfight. But in a corporate throwdown between the $800 bln automaker and the slightly smaller Facebook parent, which would win? On balance, Elon Musk’s bid to reshape the physical world beats Mark Zuckerberg’s promised virtual one.
Elliott asks too much too soon at NRG 23 Jun 2023 The activist wants the CEO of the $8 bln utility to go, in its second campaign against the company. Both sides see the need for cost cuts, returning capital and refreshing the board. Elliott’s worries about acquisitions are reasonable too. But it’s not yet time for heads to roll.
China plus one is best glue for India-US romance 23 Jun 2023 Prime Minister Modi’s largely successful state visit points to how India can help US firms like Tesla and Micron rejig supply chains. In sensitive areas like defence, trust is growing but remains in short supply. It keeps any hope of prising India away from Russia out of reach.
Capital Calls: Canada is calling Meta’s bluff 23 Jun 2023 Concise views on global finance: The Facebook owner plans to pull news on its platforms in Canada after the country passed a bill that requires internet giants pay publishers. If Australia is any guide, Meta will eventually cave.
Eni’s bet on gas comes at an acceptable price 23 Jun 2023 The Italian group and Var Energi, in which it holds a 63% stake, are buying Neptune Energy for $4.9 bln. The seller’s private equity owners once hoped for an IPO at twice that level. Bulking up in fossil fuels carries risks, but Eni’s price at least creates some sort of buffer.
Ukraine’s push for speedy rebuild faces obstacles 23 Jun 2023 Kyiv is keen to put aid money to work on an early start of the reconstruction effort. Foreign donors and investors remain wary of the war dangers. A scheme to insure those risks could speed up things, but going too fast could also compromise Ukraine’s long-term recovery effort.
Interest rates have broken the global wealth pump 23 Jun 2023 The world has been through a second Gilded Age where the rich got richer, helped by ultra-low interest rates. In the past, such episodes ended in revolution or civil war. This time, higher borrowing costs can bring about a painful but peaceful transition, says Edward Chancellor.
Fail with big backers signals messy Byju’s unwind 23 Jun 2023 Auditor Deloitte is walking away from the self-claimed world’s largest education tech firm, and investors including Prosus and what was Sequoia India appear to be following. It implies talks with lenders over a $1.2 bln loan are at a dead end and ups the pressure for a breakup.
China’s $72 bln tax break heralds green-car crunch 23 Jun 2023 Extending hefty incentives to buyers for another four years shows Beijing is anxious to support electric vehicles. But prolonging existing subsidies is unlikely to transform the fortunes of loss-making groups like Nio and Xpeng. Weaker rivals may be nearing the end of the road.
China stares hard at its own lost decade 23 Jun 2023 It’s tinkering with interest rates but holding off from deeper measures needed to stimulate the economy including propping up real estate or bailing out local governments. As consumption remains depressed and investment falls, the country faces slipping into a downward spiral.
Firefighting leaves central banks on shaky ground 22 Jun 2023 Policymakers in the UK, Switzerland, Norway and Turkey all hiked rates on Thursday. Stubborn inflation gives them little choice, even though they may cause recessions. In London and Ankara, ratesetters’ job is made much harder by politicians’ own failures and need for scapegoats.
BlackRock puts bitcoin in a suit and tie 22 Jun 2023 The asset manager’s application to launch a bitcoin ETF ticks at least one box that other firms’ applications didn’t. If the SEC approves, it would make the oldest cryptocurrency easier to hold and more legitimate in the eyes of Wall Street investors – but still with far to go.
Credit-card crackdown will net limited rewards 22 Jun 2023 Over 80% of Americans have one, yet plastic’s complexity rivals financial derivatives. A Biden administration plan to cut late fees to $8 sounds like a step toward simplicity and a savvy vote-winner. Banks will probably be no worse off, however, and consumers scantly better.
Capital Calls: Satellite M&A crash landing 22 Jun 2023 Concise views on global finance: SES and Intelsat’s decision to call off merger talks leaves the Luxembourg-based group with a $3 bln puzzle.
Rebuilding Ukraine: how much and who pays? 22 Jun 2023 Talk of reconstruction may seem premature with Russia still firing missiles at Kyiv. Yet that’s what policymakers and financiers gathered in London this week to debate. In this Viewsroom podcast, Breakingviews columnists discuss the cost, the timetable, and who picks up the tab.
Masayoshi Son’s new AI push merits a pinch of salt 22 Jun 2023 The SoftBank founder said he would place further bets on artificial intelligence after taking a pause. Some of his investments may pay off. But Arm is his only real AI win from a $112 bln portfolio, his credibility has taken a knock, and his war chest is smaller than it looks.
Thyssenkrupp hydrogen IPO calls for leap of faith 22 Jun 2023 The German conglomerate has resumed efforts to list electrolyser firm Nucera, hoping to raise $650 mln. Green hydrogen was once seen as the Swiss army knife of climate change. But market sentiment has soured and Thyssenkrupp’s alkaline technology faces competition from China.
Thrift-store IPO dresses up old model in new style 21 Jun 2023 Secondhand retailer Savers Value Village is seeking a market value as high as $2.7 bln. Its pile of debt is a well-worn problem. At the same time, an ESG strand and Gen Z’s zeal for recycled goods give the 69-year-old business a fresh look.
Volkswagen’s tight ship is facing a bigger storm 21 Jun 2023 The $78 bln carmaker’s pledge to boost margins and curb investment may fend off criticisms of inefficiency. Yet CEO Oliver Blume has yet to convince investors he can battle greater competition from Tesla and Chinese rivals. Volkswagen’s depressed valuation may linger.
AI’s regulation naysayers protest too much 21 Jun 2023 Lawmakers in the European Union and elsewhere are scrambling to draft artificial intelligence rules. Industry leaders like OpenAI boss Sam Altman warn the approach is too onerous. Yet the risks of pandering to special pleading exceed the dangers of stifling a nascent industry.
Donors can digest Ukraine dam attack damage 21 Jun 2023 The destruction of the Kakhovka dam is a big blow to Kyiv and adds billions of dollars to its recovery bill. Yet international donors meeting this week in London can absorb the long-term shock. Especially if they take the assault as a sign of Russia’s rising military desperation.
Swiss $17 bln CoCo case could bite UBS on the tail 21 Jun 2023 Bondholders are suing regulator FINMA for ordering the writedown of funky hybrid bonds to smooth a Credit Suisse deal. If they win, the debt may come back to life, giving UBS a capital hole. Or the government may pick up the tab, creating new political headaches.
UK has little wiggle room on mortgage aid 21 Jun 2023 Prime Minister Rishi Sunak is under pressure to cushion the 1.7 trln pound home loans market from high interest rates. Taxpayer support would spook markets and add to the Bank of England’s inflation headache. Targeted relief from banks would do less damage – but have less impact.