Alphabet feigns to be underdog in cloud game 3 Nov 2023 The $1.6 trln tech giant invested in AI startup Anthropic. Its outlay will come back to the Google parent in payments for cloud computing. CEO Pichai is giving companies an alternative to Microsoft and Amazon. Competition is good, but would be better if it wasn’t among Big Tech.
Telecom Italia rival plan has too many pitfalls 3 Nov 2023 An ex-executive and a fund say the telco could raise 16 bln euros by offloading a Brazilian unit and other assets to slash its debt pile. That would spare it from selling its prized network to KKR. Yet bagging such valuations while executing a multi-step project looks tricky.
Rich countries are stumbling into a debt trap 3 Nov 2023 Large deficits and higher interest rates are pushing up the cost of servicing hefty piles of sovereign borrowing. Elusive growth, stubborn spending and hawkish central banks make it hard for governments to regain control. Little wonder bond investors are heading for the exit.
Capital Calls: Paramount’s stricter streaming 3 Nov 2023 Concise views on global finance: The media stalwart’s shares popped 10% as boss Bob Bakish predicted that losses from its costly streaming push have topped out. But the company still faces a cutthroat market full of better-resourced rivals.
SBF’s guilty verdict will help crypto break free 3 Nov 2023 Sam Bankman-Fried’s crimes worsened a rout that wiped trillions of dollars in value from digital assets. The FTX founder’s conviction suggests that, even in crypto, bad actors will be held to account. That could help rebuild trust in the idea of a trustless financial system.
Apple’s cash insures against exuberance 3 Nov 2023 The $2.8 trln iPhone maker’s valuation is rich even as growth slows, antitrust worries cloud its services business and trade wars threaten China sales. While investors seem as confident as ever, the company’s balance sheet suggests boss Tim Cook is exercising some caution.
Amusement parks win $8 bln M&A consolation prize 2 Nov 2023 Cedar Fair and Six Flags are ending respective wild rides by uniting in an all-stock deal. They expect to slash costs and boost sales, optimistically worth $1.6 bln. It promises to be a fun adventure, but disappointing when compared to the thrills they had in store a year ago.
Starbucks will benefit from kicking coffee habit 2 Nov 2023 When the economy slows, as is increasingly expected in the $115 bln company’s key US and China markets, consumers brew more java at home. In 2008, its profit fell 53%. Food and customized drinks are the sorts of small affordable luxuries that should now provide a better cushion.
Capital Calls: CVC, Grocer wars, Atos 2 Nov 2023 Concise views on global finance: The European buyout group has postponed its plans to list in Amsterdam; British supermarket Sainsbury’s is thriving, which is bad news for rivals like CD&R-owned Morrisons; French IT firm Onepoint has grabbed a 10% stake in ailing peer Atos.
Morgan Stanley’s new CEO inherits rich pickings 2 Nov 2023 Ted Pick has the money and backing of predecessor James Gorman to make acquisitions that will help the $120 bln Wall Street firm service more of the global elite. While many potential targets look cheap, he can take his time. The most enticing prospects aren’t for sale yet.
Japan’s rates tweak is careful and crafty 2 Nov 2023 The central bank changed its policy to allow higher 10-year bond yields. Unlike the US, it can afford to raise borrowing costs slowly as inflation is low. In this Viewsroom podcast, Breakingviews columnists explain why monetary tightening as others loosen may give Tokyo an edge.
Shell’s shrinking green pledge risks backfiring 2 Nov 2023 The $217 bln oil major has upped by 40% a quarterly buyback plan while curbing unprofitable low-carbon activities. CEO Wael Sawan’s focus on fossil fuels has shielded him from the troubles ensnaring BP and Orsted. The strategy can work only if volatile energy prices stay high.
Sanofi sickness calls for activist tonic 2 Nov 2023 The pharma group lost nearly $27 bln of market value as it announced more investment in drugs. To keep investors happy, CEO Paul Hudson can sell its consumer business, step up dealmaking and buy back shares. Its long-suffering shareholder L’Oréal has reason to back bold action.
Brookfield’s energy transition Plan C may yet work 2 Nov 2023 The investor’s improved and final $13 bln co-bid for Australia’s Origin looks set to fail after pension fund AusSuper rejected it. A new tweak means the bidders can then launch a tender offer. It would be a desperate messy affair, but Brookfield could emerge with the upper hand.
Piyush Gupta: Asia’s most disrupted digital banker 2 Nov 2023 The CEO of Singapore’s DBS is often feted as the region’s top financier and a candidate to lead rivals. Yet following repeated tech fails, the regulator has banned the bank from activities including M&A. It puts dividends at risk and will attract the eye of watchdogs overseas.
Broker disruption can grow beyond housing 1 Nov 2023 A $1.8 bln verdict against real estate agents could cut into commissions and deflate sky-high home prices. Industries with similar middlemen were already disrupted. Residential brokers are due for a reckoning. Others, like investment banking, could use dismantling, too.
Apollo deal drought is swamped with success 1 Nov 2023 The $630 bln investment firm delivered disappointing profit and underscored plans to give shareholders less dealmaking lucre. Its market value jumped 8% on the bad news. Increasingly prized fee income helps boss Marc Rowan’s empire overcome higher interest rates squeezing alpha.
Treasury’s borrowing boom is gust before the storm 1 Nov 2023 Between the Federal Reserve’s interest-rate pause and the US government’s $112 bln borrowing splurge, there’s plenty to drive yields higher. But the reason Treasury markets are so susceptible to turbulence is the bigger problem: too much debt, and no plan to get it down.
Larry Fink’s next M&A may go in surprise direction 1 Nov 2023 BlackRock’s founder built the world’s largest fund group on audacious acquisitions. He wants to do a last deal before leaving. Absorbing an alternative asset manager is tricky, while an index compiler like MSCI could offer synergies. The wild card is a data firm like Bloomberg.
Capital Calls: Aston Martin 1 Nov 2023 Concise views on global finance: The marque favoured by James Bond has lost 50% of its value since a capital increase three months ago.
Orsted’s losing US bets need rethink of UK plans 1 Nov 2023 The Danish wind giant lost a fifth of its value after a surprising $4 bln impairment in the States. That erases most of the capex spent there. Yet it still wants to invest in the world’s biggest economy to meet its lofty targets, a risky gamble that requires restraint in Britain.
BoE’s tough talk on rates ignores weak homeowners 1 Nov 2023 The Bank of England is set to keep borrowing costs steady this week but insist they will stay high to curb inflation. That may be hard, given the sick housing market has yet to feel the pain of past hikes. The UK may ease policy sooner than its peers will, and the market expects.