Capital Calls: Saks and Neiman Marcus 1 Dec 2023 Concise views on global finance: The two luxury retailers are once again contemplating a merger. Fickle consumers, even for high end items, make the marriage ideal.
Forex swings will upend lucrative yen carry trade 1 Dec 2023 Investors who borrowed Japanese currency and invested in dollars or, even better, Latin American assets, have been enjoying big returns. Yet expected changes to monetary policy in the US and far east point to more volatility. Bets on diverging interest rates will get riskier.
OPEC+ is a weird club for Brazil to want to join 30 Nov 2023 Latin America’s largest economy is mulling joining the 23-strong oil producer group. But OPEC+’s latest 2 mln barrels of daily cuts are not needed to balance the market, will rile the US at a sensitive time, and may increase internal strife. It seems more like a club to leave.
AbbVie clinches the drug patent-cliff dismount 30 Nov 2023 A $10 bln purchase of ImmunoGen is the pharma giant’s latest bid to replace sales from maturing mega-drug Humira. While sometimes the fear of losing patent protection on a star product is justified, AbbVie shows it’s possible to go over the cliff and live to tell the tale.
James Gorman makes a good sketch for a Disney CEO 30 Nov 2023 The outgoing Morgan Stanley boss is joining the Magic Kingdom’s board. He’s also not a bad blueprint of what Disney needs in a replacement for boss Bob Iger. The next CEO should be a specialist in solid shareholder returns, strategic pivots and bloodless succession planning.
Tesla should dig the Cybertruck’s grave 30 Nov 2023 Elon Musk is about to launch the bizarre, angular pickup two years late after warning that it will be a financial drain. GM and Ford will fight to guard their cash cows; Rivian has a leg up; and pickup buyers are electric skeptics. Releasing this albatross is a mistake.
Capital Calls: ASML’s new CEO 30 Nov 2023 Concise views on global finance: Peter Wennink has delivered a 1,000% shareholder return during his tenure at the Dutch group that is a key player in chip manufacturing. His successor, Christophe Fouquet, faces a more challenging future.
Private-asset binge exposes insurance to new risks 30 Nov 2023 US insurers hoovered up private loans from buyout firms last year in a profitable game of pass-the-parcel. Their hoard of alternative assets has swelled 65% in five years, and regulators are struggling to keep up. The March banking panic shows what can happen when firewalls fail.
Romanian telco upstart will be M&A party pooper 30 Nov 2023 Originally a mobile provider for Bucharest expats, Digi Communications is expanding across Europe. It is taking market share thanks to a low-cost model and as regulators force merging rivals to shed assets. A wave of consolidation in Spain and elsewhere may yield some surprises.
US and India’s strengthening bond is weak on trust 30 Nov 2023 New Delhi reacted soberly when the Justice Department linked a government official to a murder plot on US soil. It highlights the duo’s deepening financial and strategic ties. China and growing trade links give President Joe Biden reasons not to get too tough, for now.
Asia’s tech giants lean toward desperate deals 30 Nov 2023 TikTok is in talks to tie up with Indonesia’s GoTo to avoid a ban on social media entities in e-commerce, per Bloomberg. China’s growth woes incentivises its companies to compromise as they push overseas. A share price rout means Southeast Asian foes could soon become friends.
Saudi’s Indian cricket play works for both sides 30 Nov 2023 The kingdom is looking to invest as much as $5 bln in the Indian Premier League. In this Viewsroom podcast, Breakingviews columnists discuss what it means for the sport and how it sizes up against Riyadh’s growing global sporting ambitions.
Insurer mega-deal faces doubly poor prognosis 29 Nov 2023 Cigna and Humana are in talks to create a $135 bln giant. Overcoming near-certain trustbuster opposition likely means hiving off overlaps that would benefit either and enduring a year-plus wait. Judging by investors’ early response, that might cause them to nix the idea first.
GM’s big buyback is welcome dose of realism 29 Nov 2023 The Detroit carmaker is falling further behind electric supremo Tesla, its robo-taxis are on ice, and wages are up. Its response: buy back $10 bln of stock. Returning money to investors suggests CEO Mary Barra thinks they can spend it better than she. They would probably agree.
LME win leaves one tricky question unanswered 29 Nov 2023 A court backed the London Metal Exchange’s decision to cancel $12 bln of nickel trades, rejecting a challenge by fund Elliott. The HKEX-owned venue has improved its standards. But the verdict does not address its conflict of being both a regulator and a commercial player.
AI investments carry whiff of vicious circles past 29 Nov 2023 Turmoil at Microsoft-backed OpenAI lays bare governance risks for such tie-ups. A linked, and equally concerning, problem is tech titans injecting capital in exchange for revenue, inflating valuations in the process. The mutual back-scratching evokes dangers of the dot-com era.
Capital Calls: Ferrovial/Heathrow 29 Nov 2023 Concise views on global finance: The Spanish infrastructure giant has offloaded its final 25% stake to Saudi Arabia’s sovereign wealth fund and private equity group Ardian for 2.4 bln pounds, but a chunky premium means the new owners should hope for a smoother ride.
Richemont digital strategy goes back to square one 29 Nov 2023 The Swiss group’s sale of its YNAP online platform is in doubt due to troubles at US-listed buyer Farfetch. Extracting itself from the deal, though potentially messy, looks the best option for the Cartier owner. Yet that still leaves Chairman Johann Rupert with an old problem.
Temu takes edge, and shine, off Shein 29 Nov 2023 The shopping app’s huge success helped parent PDD double quarterly revenue, sending its New York stock up 18%. It puts the planned US debut of its rival, valued at $60 bln, in perspective. Shein will test appetite for hot China-linked deals but it’s not a singular phenomenon.
Everybody could use a Charlie Munger 28 Nov 2023 Warren Buffett’s deputy and self-dubbed cheerful pessimist has died a month shy of his 100th birthday. He was witty, smart and a fixture at Omaha gatherings. But his chief asset, as a sounding board to the one who got fame and fortune, was also his boss’s best value investment.
Uneasy lies the head of Crown Castle 28 Nov 2023 Pushy investor Elliott is again chiding the $47 bln wireless towers operator, urging it to replace CEO Jay Brown. The shares have dragged under his watch, with costly fiber networks partly to blame. As NRG and Citrix sensed, it’s unwise to slam the door twice on the hedge fund.
EU watchdogs muck up Amazon’s messy iRobot cleanup 28 Nov 2023 The European Commission says the e-commerce giant’s $1.4 bln takeover of the Roomba maker could shut out robot-vacuum rivals. Trustbusters are mainly concerned about Amazon’s market clout. Yet if the deal collapses, iRobot shareholders will suffer more downward suction.
Capital Calls: Barclays, Rolls-Royce 28 Nov 2023 Concise views on global finance: Initial glimpses of the $27 bln UK bank’s new plan suggest it won’t gee shares that trade at 0.4 times tangible book value; the engine-maker’s CEO has set out bold profit targets as part of its strategy overhaul.
ADNOC German oil deal has bad timing, good logic 28 Nov 2023 Abu Dhabi’s energy giant may bid for BASF-owned Wintershall, in a deal worth $11 bln. As the UAE prepares to host the COP28 climate shindig, that’s a bad look. But buying the German group’s pipeline network may suit ADNOC’s wider aim to bulk up in European petrochemicals.
COP28’s big dilemma: fossil fuel cuts, or fudges 28 Nov 2023 The success of the Dubai climate shindig rests on how much it slashes emissions via cuts to oil production, and how much it relies on carbon storage or removal. In this Exchange podcast, Energy Transitions Commission chair Adair Turner warns against relying on the latter.
Slowing China still leads the race for commodities 28 Nov 2023 The world’s second-largest economy may expand by a sub-par 4% next year. But that would be 27% of global growth. And Beijing’s shift from property to greener sectors will support its appetite for copper, steel and such. Investors looking just at the big picture risk missing out.
Warner Bros Discovery boss’s payday is toast 27 Nov 2023 David Zaslav has to boost the HBO operator’s value by $79 bln to collect stock options worth $200 mln. That’s a stretch even if better parts such as video games and streaming services pick up. His compensation, like the dealmaking that created the company, evokes a bygone era.
EU is ill-equipped to meet growing global threats 27 Nov 2023 The bloc would be more effective in a dangerous world if its 27 members could make decisions more quickly. The snag is that nationalistic currents make countries even more reluctant to give up their vetoes. It is not clear if the European Union can find a way to square the circle.
Capital Calls: Amazon shipping 27 Nov 2023 Concise views on global finance: The online retailing giant’s push to distribute packages itself has been a costly way to attract customers, but some numbers suggest it is becoming more efficient and speed is helping boost profit.
Foxconn is still running with difficult status quo 27 Nov 2023 Terry Gou’s exit from Taiwan’s presidential election race may shield the $45 bln firm he founded from immediate political crossfire from Beijing. However, the Apple supplier’s push to move production outside of China leaves it firmly on frontlines of rising cross-strait tensions.