Make in India can dial up Chinese characteristics 1 Mar 2024 India's $300 bln electronics dream is stuck on low-end work like assembling iPhones. To climb the manufacturing ladder, it can improve market access for its neighbour's firms in exchange for expertise. That will require officials to lower tariffs and open up to Chinese investment.
VCs don shades even as tech storm clouds gather 29 Feb 2024 Even as OpenAI faces a probe, entrepreneurs and their backers meeting in California have high hopes for the industry. It’s not clear why. Last year’s funding and dealmaking rout leaves founders short on cash, and attempts by big tech firms to fill the void may make matters worse.
Snowflake shows how easily AI valuations can melt 29 Feb 2024 Growth slows a little and a 65-year-old CEO retires. The result: a fifth of the data firm’s $75 bln market value vanishes. It’s a sign of how much perfection is priced into AI-related stocks. Snowflakes are never alike, but when it comes to investor exuberance, tech firms can be.
Post-crisis Adani is cranking up his IPO factory 29 Feb 2024 Indian tycoon Gautam Adani is on a comeback from a short-seller attack that stress-tested his $200 bln empire. In this Viewsroom podcast, Breakingviews columnists explain how the spotlight impacted his group and look at the next crop of listed companies it is set to produce.
Banks’ hot new trade could burn others, for once 29 Feb 2024 So-called synthetic risk transfers offer a Houdini-like way of loosening capital handcuffs. While best suited to the biggest lenders, it could also help smaller rivals burdened by shaky real-estate bets. The danger to banks is minimal; investors need to read the small print.
Capital Calls: Airline recovery, AMS Osram 29 Feb 2024 Concise views on global finance: A travel boom lifted 2023 operating profit at the $10 bln parent of British Airways and Iberia above its pre-pandemic level; shares in the sensor company, a supplier of Apple, fell 43% after the group cancelled a major micro-LED project.
LSEG’s big data dividend is still in the cloud 29 Feb 2024 Three years after absorbing information purveyor Refinitiv, CEO David Schwimmer has hit his growth and margin targets. Yet investors still value the $60 bln London Stock Exchange owner like a bourse operator. An upgrade depends on persuading Microsoft users to pay for LSEG data.
Hong Kong needs a purpose to steer its finances 29 Feb 2024 The Asian centre will log another budget deficit, and its fiscal reserve has nearly halved to $94 bln since 2018. Meanwhile structural issues, including a reliance on land sales, remain unresolved. The city is eroding its healthy buffers. It lacks a plan to make that worthwhile.
Baidu may be the world’s most unloved AI stock 29 Feb 2024 China's $36 bln search-engine operator lags leaders like Microsoft but is making progress on its answer to ChatGPT. Yet the stock plunged 8% despite decent results and it now trades below 10 times forward earnings. Blame a rout in Chinese equities and overly high expectations.
Disney gets second mouse role in Reliance show 29 Feb 2024 The duo are merging their Indian TV and streaming assets into a $8.5 bln joint venture. It's a welcome end to an unnecessary distraction for Disney boss Bob Iger. After forcing the US firm into missteps, Mukesh Ambani's Reliance is winning control of a powerful entity at a steal.
Healthcare’s $450 bln octopus becomes the kraken 28 Feb 2024 Trustbusters are probing UnitedHealth, which insures 53 mln patients and works with 10% of US doctors, while also managing pharmacy benefits and more. It’s hard to dispute the market power. Whether there’s abuse, and how to stop it without hurting consumers, is less obvious.
UK $4 bln insurance mash-up may yet motor 28 Feb 2024 Direct Line rejected a cash and share offer from its $8 bln Belgian rival Ageas. The target’s depressed share price suggests it has good reason to hold out for more. And synergies related to the two groups’ capital should give Ageas scope to hike its offer.
Apple picks a better road to AI dominance 28 Feb 2024 The $2.8 trln tech giant has ditched a decade-long quest to build a car. Though huge, the auto market is cutthroat. Besides, making cars would have mostly been a new way to capture customers’ data and brainspace. The iPhone maker has more effective ways to achieve that goal.
A $16 bln deal models buyouts’ modest comeback 28 Feb 2024 Private equity’s 2023 was a year to forget; 2024’s near-$100 bln of buyouts is a better start. The carve-out of Truist’s insurance unit shows banks willing to lend, finally, at a decent level. Crazy checks won’t return until rates fall again, but for LBO shops, it’s a start.
Klarna IPO now makes less sense than one later 28 Feb 2024 Decent growth and lower losses mean the Swedish buy now, pay later group can justify a $20 bln valuation. Given that’s three times the level of its last cash injection, there’s an argument for a speedy listing. Still, Klarna’s messy governance suggests a 2025 IPO is more logical.
St James’s Place mess may spark a Lloyds reunion 28 Feb 2024 The UK wealth manager’s shares fell 33% after a $539 mln charge to compensate angry clients. Given these payouts may not worsen, St James’s Place looks to be in play. Lloyds Banking Group, which once owned part of SJP and wants to expand in wealth, could be first in the queue.
Vodafone’s Italy exit puts speed before valuation 28 Feb 2024 The UK telco looks poised to sell its hard-pressed local business to Swisscom for 8 bln euros in cash. The price tag is lower than a previous Iliad offer. But it’s a cleaner exit, and advances boss Margherita Della Valle’s goal of prompt M&A to make her company less sprawling.
European bank property buffers rest on two big ifs 28 Feb 2024 Lenders like BNP and ING sit on $1.5 trln of commercial property loans, which look vulnerable to high interest rates. Longer leases give EU players more breathing space than US counterparts. Yet averting a crisis requires a mixture of falling inflation and a revival of offices.
Geely’s $7 bln Lotus deal breaks speed limit 28 Feb 2024 The Chinese automaker has listed the storied brand in the US via a SPAC at a racy valuation. That's hard to justify with electric-car sales growth slowing. A plan to take advantage of lower-cost manufacturing in Wuhan has also aged poorly as concerns mount over Chinese exports.
Shenzhen offers glimpse of China’s housing future 28 Feb 2024 The tech hub’s plan to put 60% of its 18 mln residents in subsidised homes answers President Xi Jinping’s call for a “new development model” prioritising affordability. The state is reclaiming a lead role in the property market of the world’s second-largest economy, at huge cost.
Exxon juggles stick of dynamite near Hess deal 27 Feb 2024 The oil giant and Chinese partner CNOOC say Chevron’s $53 bln acquisition of Hess gives them the right to buy the latter’s crown jewel stake in a Guyana oil field. While that threatens to blow up Chevron’s plan, an Exxon purchase also could saddle it with a risky time-bomb.
Capital Calls: Charter and Altice 27 Feb 2024 Concise views on global finance: Tying up Charter, the cable giant backed by the media mogul, with rival Altice USA would form the country’s largest broadband player. That isn’t worth bearing the burden of regulatory hurdles, Altice’s mountain of debt, or its over-rich valuation.
Stephen King ghost-writes trustbusting bestseller 27 Feb 2024 The US FTC is suing to block the $25 bln merger of grocers Kroger and Albertsons partly because of perceived harm to union labor. It resembles, oddly enough, a winning DOJ lawsuit over Penguin’s deal to buy Simon & Schuster. The case has a good shot at becoming a horror classic.
A plot twist threatens Jay Powell’s artful script 27 Feb 2024 Higher borrowing costs are helping achieve the Fed’s 2% inflation target without a recession, but US wages and consumer spending tell a different tale. The upward price pressure augurs elevated interest rates for longer. To ensure a happy ending may require revising the story.
Europe defence push requires clearing M&A barriers 27 Feb 2024 The region is hiking military spending to aid Ukraine and become less dependent on the US. Yet governments are squandering investment on incompatible weapons and systems. Creating more regional champions, like aerospace giant Airbus and missile maker MBDA, is a top priority.
Why central banks risk making more mistakes 27 Feb 2024 Western rate-setters were late in fighting inflation. In this Exchange podcast, TS Lombard economists Dario Perkins and Davide Oneglia argue that, as price growth abates, the US Federal Reserve and European Central Bank may be too slow in easing monetary policy.
Shein’s IPO backup plans can unravel 27 Feb 2024 The fast-fashion retailer is eyeing London, Singapore and Hong Kong as its US listing hits a snag, per Bloomberg. Those venues might allow the profitable firm's backers to cash out faster. But recent New York debuts show Plan A still outshines the rest.
Li Auto’s blockbuster drive deserves a sequel 27 Feb 2024 The $38 bln Chinese carmaker is celebrating its first year of profitability as its focus on hybrid models pays off. Now 2024 promises a twist in the tale as Li starts selling pure electric vehicles. The company is sacrificing a unique selling point, but it's a calculated risk.
Buffett puts $1 trln grid problem in a bad light 26 Feb 2024 The billionaire’s Berkshire Hathaway became one of the biggest US utilities on the basis that providing electricity would generate steady returns. He now says he made a “costly mistake.” Thirteen-digit capital demands from climate change are quickly dimming investment prospects.
Top JPMorgan banker spots value in Citi rotation 26 Feb 2024 Viswas Raghavan is leaving a senior post at the world’s largest investment bank to lead a broader but smaller business for its rival. If he partly narrows the gap between the two, investors should gain. The 57-year-old might even have a shot at succeeding Citi CEO Jane Fraser.