Hong Kong bankers play an anxious waiting game 26 Sep 2023 Fewer IPOs in the city mean firms such as UBS and Bank of America are more willing to handle middling transactions like Tuhu’s $150 mln offer. But as big deals stir in New York and beyond, the downsizing increasingly will look like an awkward stopgap for Wall Street.
Amazon’s AI bulk-up merits the risk of a bust-up 25 Sep 2023 An agreement to plow up to $4 bln into artificial-intelligence startup Anthropic could give the tech giant’s cloud arm, crucial to its valuation, a growth boost. Despite the risks of a costly AI arms race or catching regulators’ ire, placing this catch-up bet makes sense.
Hollywood’s brief thaw belies a long winter 25 Sep 2023 The film and TV writers’ union has tentatively agreed to a contract. That will gin up content production for streaming services that came to a screeching halt during a five-month strike. The trouble is the entertainment complex from acting to distribution is flawed.
Nomura is merely first in line for new China risk 25 Sep 2023 Charles Wang Zhonghe, the firm’s Hong Kong-based chair of investment banking for the People’s Republic, is barred from leaving the mainland. Overseas banks committing to bulk up in the country may no longer be able to avoid the effects of President Xi Jinping’s crackdowns.
Entain’s troubles may entice MGM into a fresh punt 25 Sep 2023 Shares in the $8 bln gambling firm fell 10% after an unexpected sales warning. An Australian slowdown and regulatory heat in the UK, its biggest market, are tricky to fix. But the more Entain’s stock sinks, the more $13 bln MGM may consider renewing its dormant bid interest.
Irish listing rot is symptom of wider EU malaise 25 Sep 2023 Packaging giant Smurfit Kappa may follow CRH in ditching Dublin for the US. The exodus, along with other potential defectors, will erode over half of the $172 bln exchange’s value. Without meaty subsidies or a pan-EU capital market, global firms have little reason to stay.
Evergrande is weak link in China’s property fix 25 Sep 2023 The developer’s debt rejig has fallen before the first hurdle. It can’t issue new notes because of an investigation. For all Sunac and Country Garden’s good news, Evergrande accounts for half of the trio’s $670 bln liabilities. Its struggles will hold back the entire market.
Western rival to Belt and Road has much to prove 25 Sep 2023 The G7’s $600 bln plan to compete with China’s flagging investment push has launched splashy railway and energy schemes in Africa and Asia. But governments and private investors haven’t put up much cash. It’s also unclear how poor countries will avoid debt traps, says Hugo Dixon.
Carmakers will blink first in union standoff 22 Sep 2023 The UAW is expanding strikes at GM and Stellantis, but not at Ford, where the union sees progress. Divide-and-conquer will stretch labor funds and selectively boost the financial impact – some $48 mln a week at the F-Series pickup manufacturer alone. Workers have the upper hand.
Uncle Sam risks recession by a thousand cuts 22 Sep 2023 A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.
Permira will have to work to exit classified hole 22 Sep 2023 The buyout firm has teamed up with Blackstone to take Norway’s Adevinta private. Its initial outlay in 2021 is under water after a tech downturn battered the $11 bln company’s valuation. Permira’s hopes of a decent return rest on turbocharging sales and tangibly hiking margins.
UFC’s Saudi challenge may be less than a body blow 22 Sep 2023 After its WWE merger, the mixed martial arts promoter’s $15 bln parent TKO faces a smack from Saudi-backed PFL. But the latter is targeted more at non-US fans, a lesser market for UFC. Saudi may also struggle to scale up enough to deliver the knockout blow it managed with golf.
Ukraine war gives wings to India bond index debut 22 Sep 2023 JPMorgan will add the country’s sovereign debt to its emerging market index, easing concentration issues following Russia’s exclusion. It drags foreigners into a $1 trln market. New Delhi sees new gains from opening but it may have to bend on taxes and more to win wider backing.
M&A spillover in India-Canada fight hurts everyone 22 Sep 2023 As bilateral relations sour over a murder, tycoon Sajjan Jindal is going slow on his planned $8 bln consortium bid led by JSW Steel for Vancouver-based Teck’s coal assets. The stalling hurts the buyer and the seller, and India’s diversification ambitions a bit more.
Green energy’s tailwinds blow the other way 22 Sep 2023 Falling costs, cheap capital, and supportive politicians spurred a $7 trln global rush into renewable power. Now fractured supply chains and higher interest rates mean the transition is more expensive. These new headwinds will test the resolve of consumers - and of governments.
Capital Calls: US budget 21 Sep 2023 Concise views on global finance: US House Speaker Kevin McCarthy is siding with hardline conservatives to fund the government. Empowering the further-right flank narrows the already slim odds of new Ukraine aid, cannabis reform and crypto clarity.
Rupert Murdoch will redefine chair emeritus 21 Sep 2023 The 92-year-old media mogul is ceding his role co-running the Fox and News Corp boards, accepting the retirement honorific as his son Lachlan takes charge. By tiptoeing out, he at least cements succession. There can be no doubt, however, that his ongoing presence will be felt.
Cisco’s $28 bln spelunking yields dicey deal 21 Sep 2023 Buying data and security outfit Splunk could increase recurring revenue at the $215 bln networking giant. Cisco is also paying a low multiple. But the two don’t have much overlap, and Splunk’s cloud-based business needs work. Cisco bears execution risk, which hinges on growth.
Listing duo offers followers a cautious playbook 21 Sep 2023 Chip designer Arm and grocery delivery company Instacart have secured relatively successful stock launches, offering hope of a wider reopening of the IPO market. In this Viewsroom podcast, Breakingviews columnists explain how cornerstone investors and lowly valuations helped.
Central banks start game of chicken over rate cuts 21 Sep 2023 Officials in Sweden and Norway hiked borrowing costs, while their British peers didn’t. All hinted policy will stay tight, fearing that stoking expectations of an early start of the loosening cycle may fuel inflation. An economic slowdown may prompt rate-setters to be less tough.
Oil spike offers only a brief boon for Fed and MbS 21 Sep 2023 Crude prices are up 25% since July, swelling the Saudi crown prince’s budget. Fed boss Jay Powell wins too: he can use it to justify inflation-busting high rates. Yet long-term, a surfeit of energy demand over supply will complicate life for both central bankers and oil tsars.
Saudi’s $700 bln PIF is odd sort of sovereign fund 21 Sep 2023 Hyperactive transactions, erratic funding and an unusual asset mix set the kingdom’s Public Investment Fund apart from more cautious state-run investors. As Crown Prince Mohammed bin Salman tries to reach $2 trln by 2030, the PIF will keep making headlines – both good and bad.
Grab can feast on Delivery Hero’s Asia leftovers 21 Sep 2023 The Singapore giant is an obvious buyer for its rival’s Southeast Asian food business, a potential $1 bln purchase. It has extended its lead before by gobbling up operations of retreating Western firms. Investors are tepid on the tech recovery but Grab has the muscle for a deal.
Total’s green bet on Gautam Adani is a win-win 21 Sep 2023 The $160 bln oil major is doubling down on its Indian partner, even though units it backed before are among the tycoon's worst performers since a short attack. TotalEnergies’ green targets may be more pressing than the risk of Adani woes. Bullishness is easier now to justify too.
Fed clarity effectively sends a strong buy signal 20 Sep 2023 Benchmark US interest rates probably will hover around 5.5% for a while. A stable cost of capital gives companies, consumers and investors good reason to stop putting off decisions any longer. It should help resolve valuation ambiguities and restart M&A, IPO and housing activity.
Anti-obesity drugs can shrink more than patients 20 Sep 2023 Wegovy and other weight-loss treatments could transform public health. That may hurt medical, food and fitness companies, while potentially affecting activities from drinking to gambling. This shrinking revenue demands a new investment concept: total unaddressable markets.
Capital Calls: Disney, Cazoo 20 Sep 2023 Concise views on global finance: Boss Bob Iger’s $60 bln splash on theme parks and cruises invites further scrutiny of the Magic Kingdom’s wild cash flow ride; the UK-based online car retailer, valued at $7 bln in a SPAC deal two years ago, is handing the keys to bondholders.
Britain is tossing aside its last green trump card 20 Sep 2023 PM Rishi Sunak may defer UK targets for electric vehicles and eco-friendly houses. Juicy US subsidies had already dented Britain’s claims to net-zero leadership, but political backing was a clear signal for green investment. Watering that down is an act of financial self-harm.
UBS bondholders tee up risky goldfish impression 20 Sep 2023 The $84 bln bank may issue contingent convertible bonds, months after a state-led takeover of Credit Suisse burned the defunct lender’s debt. Market prices suggest it may not pay a big penalty for Switzerland’s sins. That invites bank overseers to burn other CoCos in future.
China may finally nick some metals clout from LME 20 Sep 2023 Beijing has long been trying to erode Western dominance in the pricing of key commodities. Shanghai’s plans for a nickel contract could hurt the London venue’s benchmark status as it reels from a trading scandal. Yet building the necessary global warehouse network will take time.