Considered View

China’s small bank bailouts duck bankruptcy test

27 May 2019

Baoshang, linked to missing billionaire Xiao Jianhua, has been brought under state control. Despite vocal threats, Beijing remains reluctant to allow even disgraced local lenders to fail. Consolidation is the alternative, but healthy peers will prove unwilling partners.

Hitachi’s spinoff lacks buyout chemistry

27 May 2019

Bain and KKR are eyeing the Japanese giant’s $6 bln chemicals arm. Steady cash flow, modest debt – plus turnaround prospects – account for the attraction. But it’s pricey relative to rivals, and a splashy push into next-gen telecoms and electric cars could take years to pay off.

Car industry second-stringers lock arms to compete

26 May 2019

Renault and Fiat Chrysler are crafting an alliance that could let them cut costs, pool technology and better bargain with rivals. Even without merging, savings could be worth more than Renault’s 15 bln euro market value. Former Fiat boss Sergio Marchionne’s dream is coming true.

Water can flow around U.S. infrastructure blockage

24 May 2019

The $1 trln needed to fix the nation’s aging pipes and other H2O infrastructure isn’t coming any time soon – as a new delay to a U.S. funding plan makes clear. The industry still has room for improvement, though, starting with better use of technology, data and capital.

Hollywood superagents demand investor tolerance

24 May 2019

Endeavor, the owner of William Morris, IMG and UFC mixed martial arts, is going public with a complex structure. In a town built on relationships there are benefits to keeping those with the best contacts close. But governance and an industry in flux confuse the IPO script.

May’s replacement will face same Brexit dilemma

24 May 2019

The British prime minister’s resignation was inevitable. But the Conservative party’s next leader will have no chance of negotiating a better Brexit deal, and faces the same parliamentary opposition. That leaves a risky election as one of the few remaining options.

Parent’s bankruptcy loosens its grip on Casino

24 May 2019

The French grocery giant’s debt-riddled controlling shareholder, Rallye, sought protection from its creditors. For now, Casino will keep sacrificing growth to pay large dividends to owner Jean-Charles Naouri. But a debt restructuring might eventually free the 3.5 bln euro group.

Popular Modi puts Indian resistance to the test

24 May 2019

Prime Minister Narendra Modi has been re-elected despite concerns he strong-arms the central bank, judiciary, and media. Voters seem unfussed about checks and balances - a global trend. But if he pushes them too hard, India’s democratic institutions will struggle to hold up.

Isolated Huawei may be shoved into Beijing’s arms

24 May 2019

Important suppliers such as Arm and Intel are abandoning the Chinese telecom titan after the United States blacklisted it. That puts $50 bln in overseas revenue at risk. Huawei has cash to cope for now, but a breakup or state intrusion can’t be dismissed as potential endgames.

Chinese booze behemoth distills a sobering reality

24 May 2019

Kweichow Moutai’s state-owned parent may be planning to sell liquor directly through a separate unit. It could help usurp some $6 bln of value from shareholders, Breakingviews estimates. For new and growing MSCI index investors, it’s a stark reminder of China’s governance risks.