Polls may imperil emerging Asia’s policy stability 18 Dec 2023 India and Indonesia have had a decade of relative predictability under leaders Narendra Modi and Joko Widodo. Elections in 2024 could upend that and undermine the lofty valuations of local stock markets. Global investors, and 1.7 bln people, should temper expectations.
Beijing will build safety net around housing hole 18 Dec 2023 China’s debt-stricken developers have left 20 mln homes unfinished. Local governments can turn the crisis into an opportunity by taking on stalled projects and converting them into public housing. State firms will increase their presence in the property market in the process.
Bitcoin ETF race is a shiny distraction 15 Dec 2023 The digital token’s price has spiked as a US exchange-traded fund creeps closer to approval, bringing it back into the ranks of the world’s most valuable assets. But as with gold, economic swings, not accessibility or inherent value, will mostly determine its long-term worth.
New Hong Kong bourse CEO picks up unfinished task 15 Dec 2023 Under Nicolas Aguzin, the $42 bln market operator failed to win big IPOs and the stock lagged its Singapore rival. His successor Bonnie Chan needs to diversify the business. She is starting from a low base in ropey markets and faces investor aversion to China. It’s a tough job.
Oprah’s Weight Watchers is Ozempic-as-a-platform 15 Dec 2023 Obesity-fighting drugs should curb demand for hawkers of weight-loss regimens. But WW bought a telehealth firm that can push prescriptions, like those used by its celebrity backer, to customers. As insurers fund habit-forming programs, companies will find ways to take a cut.
Pricey Campari cognac deal requires a steady hand 15 Dec 2023 Bob Kunze-Concewitz is paying $1.2 bln for French brandy house Courvoisier, the CEO’s biggest purchase yet. At 17 times last year’s EBITDA the price looks punchy while demand for cognac slows in the US and China. Lowering the Italian group's growing debt pile could be hard.
EU accession carrot keeps Ukraine aid hopes alive 15 Dec 2023 Brussels has agreed to start membership talks with Kyiv, but Hungary blocked 50 bln euros earmarked for the war-torn country. The prospect of joining the 27-nation bloc matters more to Ukraine than the short-term financial setback, which can be overcome in the coming months.
Big Tobacco’s smoke-free rush may soon burn out 15 Dec 2023 British American Tobacco and Philip Morris International want fast-growing, smokeless products like vapes to offset stagnant sales of normal tobacco. Yet countries from Australia to the UK are clamping down on the $90 bln market. Rich valuations leave little room for error.
Gautam Adani can afford a smile about crisis year 15 Dec 2023 The tycoon’s empire has pared huge stock price losses after a short-seller attack in January. Some questions remain, but the saga is emerging as a win-win. In many ways, Hindenburg Research did Adani and India a favour, while enabling opportunistic investors to make a fortune.
Cyber-paperwork blizzard will soon blind markets 14 Dec 2023 New SEC rules force companies to divulge a hack within days of deeming it serious. CEOs wary of falling foul are apt to overshare. Such stock-swinging decisions, like ones from Clorox and Johnson Controls, will test investors’ analytical skills as much as corporate tech defenses.
Policymakers take divergent paths toward rate exit 14 Dec 2023 Central banks in Europe and the US left borrowing costs untouched this week. But the latter went a step further and unexpectedly promised cuts. In this Viewsroom podcast, Breakingviews columnists explain how ratesetters, who were slow to tackle inflation, could be laggards again.
Powell was pragmatic; Lagarde will have to be 14 Dec 2023 The European Central Bank, like the US Federal Reserve, left its rates unchanged. But unlike Fed Chair Jay Powell, ECB boss Christine Lagarde didn’t imply that lower inflation meant looser monetary policy. A slowing economy and abating price pressures will push her there in 2024.
Vivendi takes slow road to unleashing value 14 Dec 2023 The 10 bln euro French media group may list pay-TV arm Canal Plus and advertising group Havas. That might help controlling shareholder Vincent Bolloré cut Vivendi’s conglomerate discount. A quicker ploy would address the fact that the rump is still a disparate jumble of assets.
EU’s Russian asset grab would backfire 14 Dec 2023 Brussels is asking EU governments to funnel to Ukraine the returns on some 180 bln euros of frozen Russian assets. That would only marginally help Kyiv, even if Western support seems to be wavering. And it would open a legal and political can of worms.
China’s lead in Southeast Asia appears fragile 14 Dec 2023 Xi Jinping’s visit to Vietnam this week shows he is reinforcing alliances in the region as fast as he’s letting others slide. Yet while China's $722 bln trade relationship with the bloc dominates, distrust of the country is rising too. That’s a bad signal for future business.
Chinese equities are ready for long march upwards 14 Dec 2023 Share prices and valuations in the world’s second-largest economy are near 2016 lows. Foreigners have retreated but any recovery will depend on Beijing and domestic buyers. Patient investors willing to stomach geopolitical tensions and other risks could earn big rewards.
Hotel-deal hostility just piles on extra baggage 13 Dec 2023 Radisson-owner Choice is taking its $7 bln offer directly to Wyndham shareholders. The target’s stock price reflects some doubts about chances for success. Even with the added threat of a proxy fight, investors have good reason to want more cash and less of the buyer’s equity.
Banks’ hidden losses are surprise survivor of 2023 13 Dec 2023 The same paper deficits that helped fell Silicon Valley Bank in March still burden lenders worldwide. Bank of America alone sits on $130 bln; US banks nurse a record sum. Investors are now better at telling what’s scary from what’s not, but fuzzy accounting remains unhelpful.
Capital Calls: Entain/gambling M&A 13 Dec 2023 Concise views on global finance: The CEO of the $5 bln UK-listed betting group has stepped down, making it more vulnerable to a takeover.
COP28 deal just about keeps net zero on the road 13 Dec 2023 Nations at the climate shindig agreed to start transitioning away from fossil fuels. The wording could have been tougher and clearer, and the world still faces harmful warming. But the Dubai meeting could have yielded a damaging standstill, rather than a baby step forward.
Hong Kong’s property pain may soon get real 13 Dec 2023 The city’s leader John Lee is talking tough on illegal structures, a hot topic in the world’s most unaffordable housing market. Tackling the issue will frustrate the rich and may hit government revenues but it would please Beijing and the public. The necessity to act is growing.
Wanda tycoon pays price for overexpansion 13 Dec 2023 Once Asia’s richest man, Wang Jianlin has been forced to give up control of his mall operator to avert a $4.1 bln funding crunch. To avoid further problems at China’s biggest landlord, Dalian Wanda now needs to prove its assets are attractive to both shoppers and investors.
Antitrust legendarily unpredictable despite Epic 12 Dec 2023 A jury ruled against Google in a case brought by the gaming firm while an emboldened FTC blocked Sanofi from snagging a new drug. Yet Pfizer is pushing ahead with a $43 bln deal. Rainmakers can be comforted that regulators’ front offices aren’t a totally impenetrable barrier.
Baseball star’s payday channels Goldman’s Gus Levy 12 Dec 2023 Shohei Ohtani is deferring 97% of his $700 mln deal with the Dodgers and will cash checks until 2043. The structure gives the team co-owned by Guggenheim’s CEO financial wiggle room. This aspect of Moneyball embraces a long-term greedy ethos that’s extreme even for Wall Street.
General Atlantic laces IPO shoes with hook nearby 12 Dec 2023 A tech stock recovery coupled with consumer IPO successes bode well for a listing of the growth equity investor. But valuations could recoil as fast as they rose. While General Atlantic knows the value of pouncing quickly, TPG’s path to an IPO shows waiting has merit, too.
Last word of 2023 goes to Jay Powell 12 Dec 2023 Investors are pricing in 1 percentage point of US rate cuts next year. The Federal Reserve doesn’t want that, so its chair needs to talk up inflation on Wednesday. If markets keep ignoring him, rallies in stocks and bonds will continue, but the central bank’s job will get harder.
Global energy fissures are a risk for the West 12 Dec 2023 Falling oil prices despite recent cuts imply a weak OPEC+. Yet the producer group may increasingly align with other emerging market states on areas like Russia and climate change. In this Exchange podcast commodities expert Helima Croft says that’s an issue for Europe and the US.
BoE is a more credible rate-cut sceptic than ECB 12 Dec 2023 Policymakers in London and Frankfurt are unlikely to touch borrowing costs this week. Their challenge is to persuade markets they are not about to start slashing them. Bank of England Governor Andrew Bailey has the easier task, but only because the UK is in worse economic shape.
AI firms lead quest for intelligent business model 12 Dec 2023 Automating a swathe of tasks could help startups capture $140 bln in revenue. But even sector darling OpenAI is deeply unprofitable. To justify the billions invested by backers like Microsoft and Amazon, artificial intelligence will have to deliver lasting productivity gains.
Drugstore $6 bln deal has sickly governance 12 Dec 2023 Australian discount chain Chemist Warehouse is going public via a reverse takeover by struggling rival Sigma. It’s a good move for both companies. But insiders will rule the board, and three of them will own half the new firm. Over time, such private company trappings need to go.