BREAKINGVIEWS

Trump judicial picks are lasting gift to business

18 September 2020

The death of Justice Ruth Bader Ginsburg hands Donald Trump his third U.S. Supreme Court pick. He’s already appointed 25% of active federal judges. The resulting anti-regulation bias could last a generation. That may be good for companies – less so their employees and customers.

Trump writes cliffhanger into TikTok reality show

18 September 2020

The White House will stop Americans from downloading the video app and WeChat, both Chinese-owned. The plot centers on national-security worries but the immediate drama is of the U.S. president's making. Shifting a TikTok deadline past election day adds to the political intrigue.

Euronext gain is LSE loss in flawed Italian sale

18 September 2020

The French group is in exclusive talks to buy Borsa Italiana despite submitting a lowball bid. Open meddling by Rome has skewed the London Stock Exchange’s attempts to run an auction. Still, avoiding a state veto and completing its $27 bln Refinitiv deal may justify the discount.

Caixabank gets state boost in $5 bln Spanish union

18 September 2020

The Valencia-based lender is buying government-controlled Bankia to create Spain’s largest domestic bank. With cost savings worth more than 3 billion euros, the 20% premium looks small. Taxpayers and regulators are helping CEO Gonzalo Gortázar take it off the public’s hands.

BP’s wind tilt is more steady breeze than gale

18 September 2020

The UK oil major’s “green week” yielded a target of 20 GW of renewable energy by 2025. Even with a mooted $5 bln a year in investment, BP would struggle to get there via higher cost offshore wind. That’s probably why CEO Bernard Looney’s blueprint allows for a steadier pace.

Moutai ladles out value from its punch bowl

18 September 2020

China’s liquor titan is issuing $2.2 bln of bonds to help buy a highway operator from a struggling local government. The ludicrous diversification erased $10 bln from its enormous market cap. It’s a sobering reminder of how the country’s listed companies can be called to serve.

ZTO digs deep trench in China’s logistics war

18 September 2020

Competition has crushed the courier’s margins and with reduced forecast earnings it trades on a valuation multiple higher than its investor and customer, Alibaba. Proceeds from a $1.6 bln Hong Kong secondary listing will help ZTO triumph in a price war and any consolidation.

China sounds keen to tame financial giants

18 September 2020

The central bank’s new rules to curb reckless sprawl and systemic risk are ready to roll. Designed to stop another Tomorrow-like debacle, they may force influential conglomerates such as CITIC and state-owned groups to restructure. The trick will be for Beijing to stay vigilant.

Old-school value stocks are a dying breed

17 September 2020

The number of listed U.S. firms has halved over 25 years thanks to mergers and buyouts fueled by cheap debt. Those remaining are borrowing more, worsening Covid's damage. Most newcomers to public markets lose money. Investors looking for solid earnings are running out of options.

Exercise apps exhaust market before race starts

17 September 2020

Online fitness app Zwift just raised $450 mln at a $1 bln valuation not long after Lululemon bought startup Mirror for $500 mln and Peloton’s value topped $23 bln. Lockdown exercise trends fuel the frenzy. But the real addressable market may be much skinnier than they claim.

Richard Branson is late arrival at SPAC party

17 September 2020

The billionaire Brit is touting his Virgin brand to raise $400 mln via a blank-cheque company. Jumping on the well-trodden bandwagon is hardly disruptive. After recent setbacks, the 70-year-old may struggle to persuade potential investors and targets he has still got his mojo.

Amazon luxury success requires network effect

17 September 2020

The $1.5 trln e-commerce behemoth has wooed fashion house Oscar de la Renta to its new high-end platform. Access to Amazon Prime’s over 150 mln high-spending members is a selling point. But big brands may all wait for peers to take the plunge. That could mean a slow start.

Green bonds could slide into irrelevance

17 September 2020

Securities used to finance environmentally friendly investments are thriving, with everyone from JPMorgan to Germany charging in. Yet the $800 bln market does not necessarily mean greener issuers. As investors get better at differentiating, green bonds could become redundant.