Paytm’s smackdown has a full and final feel 1 Feb 2024 The payments bank of India’s top fintech has been barred by the regulator from receiving deposits. The reputational damage may prompt other lenders to pull back from working with the loss-making $6 bln company. It makes Warren Buffett’s recent painful exit look well-timed.
Nomura offers tantalising glimpse at mediocrity 1 Feb 2024 Japan’s vibrant market helped the investment bank churn out quarterly earnings in line with its 2025 target. Boss Kentaro Okuda’s job now is not just to sustain the performance but to improve the ho-hum 6.2% return on equity that came with it. History is not on his side.
Maxed-out shoppers put fire under Fed’s status quo 31 Jan 2024 American consumers are powering the economy. But their spendthrift ways are a big concern for central bank Chair Jay Powell. Credit card balances have just recorded the biggest jump on record and now top $1 trln. Rates are steady for now. The next move will be much riskier.
Signature Bank’s savior finds bigger isn’t better 31 Jan 2024 Less than a year after buying the innards of a failed lender, New York Community Bancorp is slashing its dividend and conserving cash to match its enhanced heft. Giants like JPMorgan face less risk of indigestion. The moral: don’t get a small bank to do a big bank’s job.
Elon Musk is his own worst enemy: part 420 31 Jan 2024 A Delaware court nixed the Tesla CEO’s $56 bln pay package, finding rampant dysfunction behind it. The sum may have been justifiable, but the carnival barking that underpins the company’s valuation complicates matters. If investors keep enabling Musk, bad governance will persist.
Netflix rivals can survive streaming squid game 31 Jan 2024 Cost savings and price hikes are reshaping the largely unprofitable industry. Hulu, Max, Peacock and others also have more money to play for beyond the $80 bln being spent by US cord-cutting laggards. Ads, bundles, sports and beyond will help build some killer business models.
Iliad rebuff raises the bar for Vodafone in Italy 31 Jan 2024 The UK telco rejected its French rival’s 10 bln euro offer to merge operations in the tough southern European market, a fresh snub to Xavier Niel. CEO Margherita Della Valle needs to quickly plan another deal. Tie-ups with Telecom Italia, Swisscom or Wind all have complications.
Capital Calls: Paramount takeover bid 31 Jan 2024 Concise views on global finance: Media mogul Byron Allen, whose company owns The Weather Channel, is offering to buy the TV and film conglomerate for $30 bln. Even if he doesn’t become the next owner, his presence should help get a sale process moving and plump up the price tag.
Santander progress yet to show up where it counts 31 Jan 2024 The $65 bln lender has already hit its 2025 profitability targets, yet still trades below tangible book value. Investors may fear risks like European rate cuts, or they might not buy Santander’s strategy. Until they award a higher valuation, boss Ana Botín’s job is incomplete.
Economic slack gives Bailey cover to cut rates 31 Jan 2024 The market wants the Bank of England to lower borrowing costs soon. Governor Andrew Bailey is set to keep them steady on Thursday because inflation remains high. Yet sub-par economic performance in the next few years could pave the way for easier monetary policy from May.
Battery minerals pressure causes cracks Down Under 31 Jan 2024 Miner IGO is freezing a nickel project key to a near-$1 bln acquisition just 18 months ago. It’s also having trouble selling lithium. Falling commodity prices and slowing EV growth are proving problematic for many, including BHP. But bad dealmaking has compounded IGO’s pain.
Alphabet may envy Microsoft’s AI Midas touch 31 Jan 2024 Massive expectations of how artificial intelligence will reshape technology have boosted both companies’ valuations. But comparing their latest results suggests the $3 trln software firm run by Satya Nadella is moving quicker and more decisively to turn its bets into gold.
GM’s good news is that it’s still GM 30 Jan 2024 The automaker forecast resilient profit for 2024, easing fears that striking workers had struck a hard enough bargain to drag the bottom line. Slipping pricing power and EV risks cast clouds, but a steady gas-guzzler business now seems enviable.
Close the Volcker playbook and open Greenspan’s 30 Jan 2024 Fed Chair Jay Powell wisely embraced Paul Volcker’s inflation-fighting approach from the early 1980s and quickly raised borrowing costs. With price pressures abating, it’s time to change tactics. Leaning into Alan Greenspan’s tactical 1995 interest rate cuts makes more sense now.
Capital Calls: HSBC, Delivery Hero 30 Jan 2024 Concise views on global finance: The global bank will pay a 57 mln pound penalty for misreporting depositor protection data; the Frankfurt-listed meal delivery company has sold a 4.5% stake in rival Deliveroo, at a loss.
Diageo investors seem braced for a beerier future 30 Jan 2024 The $78 bln drinks giant’s sales of spirits fell in the second half of 2023, but Guinness held up. If investors thought Diageo could hit its sales targets, it would be worth more. One takeaway is that they think more of its future revenue could come from less highly valued beer.
Shipping giants can withstand Red Sea crisis 30 Jan 2024 Houthi attacks near the Suez Canal are slowing global trade. In this Exchange podcast, Zvi Schreiber, CEO of shipping platform Freightos, discusses how the sector was caught by surprise, but excess container ships and more air cargo capacity are helping limit the immediate pain.
Renault’s green IPO hitch is blessing in disguise 30 Jan 2024 The $11 bln French carmaker decided not to list electric-vehicle division Ampere, citing market headwinds. CEO de Meo had hoped to value it at up to 10 bln euros, but a public float never looked like a must-have. The move will allow him to focus on the unit’s ambitious targets.
Huawei revs up a new way to feed the beast 30 Jan 2024 China’s tech champion may sell half of its autos unit at a $35 bln valuation. It’d raise funds for more research into chips, AI, 6G and more. That’d be welcome after geopolitical tensions and US sanctions sapped sales. But its excursion into EVs could hit some potholes.
For trading bosses, it’s a good time to retire 29 Jan 2024 Goldman Sachs veteran Jim Esposito quit after realizing he was “going through the motions.” No wonder: banks’ markets divisions, like the one he oversaw, face falling income and growing red tape. Sailing into the sunset, or at least out of banking, will only get more enticing.
Big Tech and AI get too close for comfort 29 Jan 2024 Microsoft, Amazon, Nvidia and Alphabet alone contributed about a third of the $70 bln raised by data and artificial intelligence startups last year. Some of the investments could turn into revenue generators. Mounting regulatory and financial risks also might offset the benefits.
Amazon’s investors can chill with M&A freeze 29 Jan 2024 The e-commerce giant scrapped a $1.4 bln deal for Roomba maker iRobot after regulatory opposition that suggests future deals, no matter how small, will be seen as problematic. Given Amazon’s track record with past tie-ups like Whole Foods, though, some restraint could be welcome.
Ryanair clear skies contain Boeing-shaped cloud 29 Jan 2024 Despite a weaker-than-expected third quarter, the $23 bln carrier still predicts record full-year net profit. Assuming holiday bookings hold up, that looks doable. But Ryanair is exposed to the uncertainty surrounding key supplier Boeing in a way that its close rivals are not.
Philips sees dim light at end of tortuous tunnel 29 Jan 2024 The $19 bln Dutch medical-kit maker faces a lengthy ban on selling ventilators in the US. Despite the hit, CEO Roy Jakobs is confident he can meet his business goals. Yet a possible fine, as well as litigation arising from faulty machines, will keep weighing on investors’ minds.
Holcim split cements deglobalisation trend 29 Jan 2024 The $43 bln Swiss building materials giant is separating its fast-growing North American arm from its remaining operations in an attempt to unlock value. The striking thing is that investors appear to view Holcim’s global scale as a brake on value, rather than a driver of it.
Capital Calls: China bank privatisation 29 Jan 2024 Concise views on global finance: The troubled regional lender Bank of Jinzhou has received a rare takeover offer from a Chinese province, which could pave the way for similar deals.
Dismantling Evergrande exposes Hong Kong-China gap 29 Jan 2024 A court in the financial hub has ordered the world’s most indebted developer to liquidate after talks with offshore creditors collapsed. Yet how this will be enforced on the mainland, where most of Evergrande’s assets are, is unclear. The experience of HNA may offer some clues.
Revamp of the world order will have to wait 29 Jan 2024 Developing countries last week called for a rethink of global governance. While it’s possible to imagine an order more conducive to peace, justice and prosperity, the chances of creating it are slim. Better to shore up the existing multilateral system and wait for better times.
JPMorgan is a rare palace that warrants intrigue 26 Jan 2024 Most whispers about CEO succession amount to idle gossip, but Jamie Dimon’s management shake-ups could lead to a world-changing decision. His swagger has helped expand the $4 trln bank’s clout in the financial system and it’s increasingly doubtful his replacement will sustain it.
Tired trends make their way to Macy’s 26 Jan 2024 The department store chain dressed down a $5.8 bln takeover bid by two investment shops because of financing concerns. From Kohl’s to Saks, the designs are typically the same: split stores from property or online from brick-and-mortar. Neither option looks especially attractive.