BREAKINGVIEWS

U.S. election dispute may demand months of hedging

25 September 2020

Investors are braced for an uncertain result in November's presidential vote. Bush v. Gore 20 years ago is a tame example. A confused, knife-edge battle in 1876 may be more relevant: The winner emerged only in March. Modern technology could even make things worse.

Everyone looks like a deal amateur in TikTok mess

25 September 2020

U.S. orders to divest assets are often straightforward. But dizzying contradictions from both dealmakers and the White House have given ByteDance a free pass around rules to sell TikTok. The resulting chaos obscures the stakes: handling data security and foreign takeover laws.

UK bookie bidding war may have two winners

25 September 2020

William Hill shares rose 38% after it said Caesars Entertainment and Apollo made rival approaches. Neither will make a decent return at its current market value of $4 bln. Better to opt for a carve-up, with the casino operator taking the U.S. unit and the buyout group the rest.

Apple fight is just one front in Europe’s tax war

25 September 2020

Antitrust tsar Margrethe Vestager will appeal a court ruling nullifying demands the tech giant pay Ireland $15 bln of back taxes. It’s time-consuming and possibly futile. With Covid-19 inflating government deficits, political pressure on low-tax states may be more fruitful.

Anti-Huawei drive pays few dividends for rivals

25 September 2020

Ericsson and Nokia should gain from the U.S.-led campaign against their Chinese competitor. But boycotts are so far limited to Europe’s 5G equipment market, which is slow-growing and worth less than $4 bln a year. Unless Huawei’s woes spread, any payoff will be little and late.

Evergrande’s too-big-to-fail bind comes to a head

25 September 2020

The indebted Chinese property developer beseeched officials to approve its reverse merger plan. Although the company claims the letter is fake, the questions in it regarding systemic risk are real for investors and Beijing. A $21 bln payment due soon will force a reckoning.

Some of China’s best reformers are indexes

25 September 2020

Officials changed key rules to get FTSE Russell’s global fixed income index to include local bonds, potentially pulling $140 bln into the market. They made similar liberalisations to woo MSCI. There’s still work to do, but foreign money retains clout in Beijing.

Free retail tech-stock bets pile on risk

24 September 2020

Recent volatility in U.S. names like Tesla and Apple was probably driven, in part, by call options. While SoftBank’s big purchases raised eyebrows, retail investors’ punts may be a bigger concern. It's one consequence of the no-cost trades pushing big banks out of retail trading.

American Airlines bailout plea looks cheeky

24 September 2020

The company wants more public money to avoid furloughing 19,000 workers. But it should have $13 bln of liquidity by the end of the quarter, including discounted loans competitors eschewed. Even if American can’t stay afloat, there’s Chapter 11. The time for handouts is over.

Buffett’s TV deal atones for his Oxy sins

24 September 2020

E.W. Scripps’ stock soared after the Omaha Sage’s Berkshire Hathaway helped finance its $2.7 bln takeover of a rival. It’s a stark contrast to the drubbing Occidental took after he enabled its Anadarko pounce. Though small, the Scripps-ION tie-up puts some shine back on Buffett.

Jefferies makes itself the envy of Wall Street

24 September 2020

The U.S. investment bank is hiking pay by 26% after a record quarter. Larger rivals like Goldman Sachs and JPMorgan will find that generosity hard to copy: Investors and regulators are unlikely to smile upon big bonuses, even if their traders think themselves just as deserving.

Rishi Sunak’s UK economic safety net has a tear

24 September 2020

The finance minister’s new job retention scheme will avoid unemployment surging when furloughs wind up yet costs less than the old arrangement. That’s helpful. But his plan does too little for low-skilled service workers whose roles may disappear forever, and who need training.

Sberbank’s rebrand puts style before substance

24 September 2020

Russia’s $67 bln lender is ditching “bank” from its name to sound more like a Big Tech group. Plans for $1 bln in 2020 non-financial digital revenue are a start, but it still has 100 mln banking clients. If the company wants its rejig to motor, it needs better transition targets.