Fast-fashion wars are warmup for Amazon battle 1 Aug 2023 E-commerce app Temu is taking on larger rival Shein in selling cheap Chinese-made goods to Western consumers. The company owned by $119 bln PDD offers a broader range, making it more like an online dollar store. That puts it on a collision course with the $1.4 trln US titan.
Dish Network enters dangerous financial orbit 31 Jul 2023 Charlie Ergen’s satellite operator is among the many companies to scrape by on low interest rates. It borrowed heavily to bet on wireless spectrum. With $5 bln of debt maturing soon, higher borrowing costs and pay-TV cash flow ebbing, it now faces a predicament others will, too.
Capital Calls: Sequoia, Heineken, Moneyball 31 Jul 2023 Concise views on global finance: The venture capital firm issues a refund to cryptocurrency investors; the $57 bln brewer slashes its operating profit outlook; Steve Cohen’s New York Mets baseball team and its whopping $364 mln payroll is a mess, but in sports beta is the alpha.
Europe’s listless IPOs are red flag for big floats 31 Jul 2023 The region’s string of mostly mid-sized initial public offerings this year are now just 3% above their listing price on average. Such poor performance will make investors wary of backing new ones. That will give larger float candidates, like CVC and Galderma, pause for thought.
The BRICS are better off disbanding than expanding 31 Jul 2023 Developing countries are understandably unhappy that rich nations don’t address their needs. But they won’t get much from a club including giant China and near-pariah Russia. Brazil, India and other emerging economies might achieve more by creating a new group, says Hugo Dixon.
Digital ad vultures descend on TV’s carcass 28 Jul 2023 Meta and Alphabet got their mojo back thanks to renascent marketing activity. Ebbing fears of recession and Chinese vendors are helping. With $130 bln still earmarked for commercials on dying television, the pack of scavengers has grown to include Uber, Netflix and others.
Biogen’s $7 bln deal goes smaller and safer 28 Jul 2023 The biotech firm’s purchase of Reata will gift it a portfolio targeting rare diseases. With the US government’s Medicare insurance program recently freed to bargain down prices on best-selling drugs, such niche therapies have become more appealing versus potential blockbusters.
Capital Calls: Bank of Japan, StanChart 28 Jul 2023 Concise views on global finance: Governor Kazuo Ueda shook markets by introducing a more flexible approach to controlling government bond yields, but he can easily retreat if inflation drops. Meanwhile, Bill Winters’ lender is improving but the heavy lifting is far from over.
Saudi pays rich but logical price for Vale metals 28 Jul 2023 The kingdom is buying one-tenth of the $66 bln Brazilian miner’s nickel and copper arm. The $26 bln valuation on Vale’s base metals unit is steep, but cheaper than a full takeover. It also acts as a down payment on Saudi’s efforts to become an energy transition industrial hub.
Kering dons Valentino scent to ease Gucci malaise 28 Jul 2023 The $72 bln luxury giant is buying 30% of the Italian fashion house for 1.7 bln euros. The premium price reflects François-Henri Pinault’s need to cut its reliance on tottering star brand Gucci. Yet Valentino is much smaller, and its acquirer may not own it in full until 2028.
Chinese AI arrives by stealth, not with a bang 28 Jul 2023 Beijing’s new rules for the technology are less onerous than expected. Armed with vast data troves, giants from Alibaba to Baidu are leading the industry’s development. But President Xi Jinping’s focus on national security and censorship, plus US chip curbs, will slow progress.
Detroit automakers are winning yesterday’s war 27 Jul 2023 General Motors and crosstown rival Ford are healthy, happy and enjoying rising prices - in their gas-guzzler businesses, that is. Unfortunately for them, uncertainty on their electric futures amid rising competition and a still-dominant Tesla spoils the party.
New bank rules cage a tiger, feed a dragon 27 Jul 2023 Big U.S. lenders’ profitability is under fire from new Basel-related capital requirements – so expect them to fight it tooth and nail. The risk is that it pushes activity into the shadows, by accident rather than design. It’s a good way to set the scene for a future crisis.
VW and Xpeng get much-needed mutual fuel injection 27 Jul 2023 The $77 bln German carmaker has bought a 5% stake in $18 bln Xpeng. Access to the electric-vehicle maker’s technology could boost VW’s own flagging business in the People’s Republic. But Xpeng equally needs the cash to help withstand a fierce domestic EV price war.
Big Tech super-regulator would be a super-dud 27 Jul 2023 Two big-name senators – a Democrat and a Republican – want a new agency to police tech firms. The highly polarizing consumer watchdog shows why that's a bad idea. A better one: pass laws to update regulators that exist already. Big Tech remains Congress’s responsibility to shirk.
Lagarde hides velvet policy in iron talk 27 Jul 2023 After lifting borrowing costs to a record high, the ECB president sounded tough on inflation to persuade markets interest rates will stay elevated. But she also hinted the central bank could pause. Investors can prepare for a less aggressive monetary stance.
Inflation dip puts central bankers in a pickle 27 Jul 2023 The Federal Reserve and ECB once again hiked interest rates. Yet US price rises are easing with few signs of economic pain. In this Viewsroom podcast, Breakingviews columnists discuss how this phenomenon, dubbed ‘immaculate disinflation’, complicates what policymakers do next.
Capital Calls: Mastercard vs. weed 27 Jul 2023 Concise views on global finance: The credit card company wants to end cannabis purchases on its debit cards. It took a similar stance with adult content site Pornhub. In the end, pot smokers will find a workaround.
Shell may as well try green plug for valuation gap 27 Jul 2023 The $204 bln group’s shares have outperformed US rivals since it flagged a renewed focus on oil, but still lag Chevron and Exxon Mobil. New boss Wael Sawan could try to close the gap by listing his green energy bits. It’s not certain to work, but is better than more buybacks.
Barclays CEO fiddles while valuation droops 27 Jul 2023 Despite earning adequate returns, the $32 bln UK bank has long traded at a big discount to rivals. Boss C. S. Venkat’s plan so far boils down to more of the same. Without clearer targets to move capital out of investment banking, the shares risk remaining stuck in the doldrums.
BlackRock makes a sharp bargain with Mukesh Ambani 27 Jul 2023 The world’s largest money manager, run by Larry Fink, is teaming up with India’s richest man to re-enter the country’s asset management business. The duo can grow fast in the cutthroat $540 bln sector riding on Reliance’s network. It justifies the US firm giving up on control.
Glencore deal epitomises net zero’s reduced status 27 Jul 2023 The $75 bln miner used to argue it was better to wind down its coal assets than sell them to a less responsible owner. Now CEO Gary Nagle wants to buy a rival and spin off the enlarged coal unit. Investors, distracted by energy security and fat profits, are unlikely to stop him.
Japan will gain from ultra-cautious ratesetters 27 Jul 2023 The world’s third-largest economy is on the cusp of a virtuous circle where inflation lifts wages and spending. But the central bank needs to tread carefully. If it prematurely declares victory and tightens policy, it could spur a debt rout. The cost of waiting is also growing.
For Meta, what’s old is finally new again 26 Jul 2023 Facebook’s owner is rebounding from the ad slump, evidenced by an 11% quarterly revenue jump. It’s a good sign for boss Mark Zuckerberg as he tries to boost the business with AI. Virtual reality will be a money pit, but at least some investment is paying faster dividends.
Peak US interest rates will weaken dollar quicker 26 Jul 2023 The Fed’s latest hike should be the last, based on how investors are trading. Higher inflation elsewhere and slower increases by other monetary authorities suggest divergent policies will persist. Similar conditions that turbocharged the greenback are set to reverse thrust.
Snap’s boss destroys $43 bln in a snap 26 Jul 2023 Despite a bad quarter, revenue has grown faster than rival Meta's since the messaging-app’s 2017 IPO. If boss Evan Spiegel had met minimum return expectations, shares would be worth 4 times more. Now is the time to rethink Snap’s future. Too bad shareholders have no control.
Rescuing US banks can be lucrative, after all 26 Jul 2023 PacWest, a regional lender battered by investors, is merging with tiny Banc of California at an apparent 20% discount and ceding management control. The $2 bln deal sounds painful, but all sides should be better off. Backers Warburg Pincus and Centerbridge stand to benefit most.
Carlyle beats deal arbitrageurs at their own game 26 Jul 2023 The buyout shop’s loan to Roomba-maker iRobot should give the company time to sew up its $1.7 bln sale to Amazon. The lifeline, which also triggered a 15% cut to the purchase price, doesn’t come free. Heads-I-win-tails-you-lose terms extract value from existing shareholders.
Capital Calls: LVMH’s US dip, Rolls-Royce revival 26 Jul 2023 Concise views on global finance: Shares in the 413 bln euro luxury conglomerate fell 4% as investors fretted about weakness in its once booming US business; the UK airplane engine maker raised its profit forecast for 2023 as its new CEO benefits from travel tailwinds.
ECB’s tough-guy act is getting harder to maintain 26 Jul 2023 Traders expect the European Central Bank to hike rates by 25 basis points on Thursday. President Christine Lagarde wants them to stay high to curb inflation, yet markets are betting on cuts in early 2024. Unless she wins the argument, borrowing costs may have to rise more.