Americas

Capital Calls: China rates, Hiscox, Renewables

3 March 2021

Concise views on global finance in the Covid-19 era: China walks back tough rate talk; the UK insurer’s problems go beyond the pandemic; Iberian energy group EDP seizes on elevated renewables valuations.

Meme stocks game could stop with Gensler

2 March 2021

The nominee to lead the U.S. securities regulator talked about trading gamification, inadequately funded platforms, and payments for order flow. The GameStop share-price roller coaster deserves a close look. But the SEC has other, perhaps tastier, fish to fry, like SPACs.

Biden finds Mohammed bin Salman is too big to nail

2 March 2021

The American president has taken heat for inaction over Saudi Arabia’s crown prince, despite judging him responsible for journalist Jamal Khashoggi’s murder. But MbS’ influence has metastasized across global finance. The fallout from sanctioning him would be more than diplomatic.

Twitter’s future looks like its underwhelming past

2 March 2021

Boss Jack Dorsey is aping features from Snapchat and Clubhouse, and making acquisitions in an attempt to double sales by 2023. Twitter isn’t the only tech firm with that kind of strategy. But the social network lags rivals, and past attempts to borrow and buy have flopped.

Chancellor: A bear market in bonds is beckoning

2 March 2021

Bond bull runs tend to last for decades, making it nearly impossible to accurately predict a turning point. But recent fixed-income extremes, together with the complacent attitude of central bankers and investors, suggest history’s greatest bond boom has passed its sell-by date.

Sustainable debt may be too popular for own good

2 March 2021

Investors are piling into bonds sold by companies such as H&M or Tesco which punish issuers for missing environmental targets. Demand has been such that the funding is now dirt-cheap. That could distort the price of the securities, and their intended effect.

Chip shortages are here to stay, for some

2 March 2021

Pandemic-led demand swings and trade wars have left factories short of semiconductors. The chip industry’s too-successful capital discipline is also a factor. The $450 bln industry’s coming splurge on new capacity will benefit smartphone manufacturers more than automakers.

The Exchange: The post-pandemic global economy

2 March 2021

Policymakers will face tricky choices about when to withdraw massive policy support as economic recovery kicks in. BNP Paribas’ group chief economist, William De Vijlder, joins Swaha Pattanaik to discuss their options, the focus on inclusive growth and the outlook for inflation.

Capital Calls: Exxon, Greensill, Research SPAC

2 March 2021

Concise views on global finance in the Covid-19 era: U.S. securities regulators take on the oil giant; Investors in even lower-risk funds get nervy about the supply chain finance provider; And a supplier of picks and shovels to the online trading boom gets a blank-check listing.

Wounded U.S. bank watchdog needs urgent care

1 March 2021

The OCC, which oversees giant lenders like JPMorgan, has gone astray. It went solo on community lending rules, banned banks from eschewing oil firms and let them settle over sloppy compliance with little explanation. A new leader can repair the damage, but time is of the essence.

Arrival of J&J vaccine is sign of glorious spring

1 March 2021

Last March, the world realized in panic that lockdowns were here to stay. This month should unwind that reaction. The U.S. authorization of J&J’s new vaccine and rapid production increases by Moderna and Pfizer are good news for Americans, but also for everyone else.

Walmart’s fintech gain hints at Goldman’s loss

1 March 2021

Omer Ismail is leaving the Wall Street bank for a job at the $368 bln retailer, just two months after becoming head of Goldman’s consumer bank. Walmart could become a force in finance. But it’s also a sign that Goldman’s retail bank is losing some shine.

Capital Calls: Sarkozy’s trial

1 March 2021

Concise views on global finance in the Covid-19 era: the former French prime minister’s conviction for trying to bribe a judge creates a new dilemma for the companies on whose board he sits, including hotel chain Accor.

Private equity growth fetish stores up future pain

1 March 2021

Last year’s $592 bln of deals were done at near-record valuations, according to Bain & Co. The consultancy reckons buyout barons are increasingly reliant on boosting sales rather than cutting costs. Since fast-growing targets are scarce, and pricey, it’s a recipe for low returns.

The house always wins with SPACs

26 February 2021

In poker, if you don’t know who the sucker is, it’s you. That’s also true of blank-check firms like the one that just did a deal with Lucid Motors. Sponsors, SPAC traders, merger co-investors and target-company owners all rake it in. Regular shareholders get the crumbs.

Review: The wild history of the commodities boys

26 February 2021

“The World for Sale” offers a virtuoso depiction of the globe’s top oil, food, and metals traders. Javier Blas and Jack Farchy tell of their startling risk appetites, spy novel antics, and geopolitical heft. Still, it’s good that their wings have been increasingly clipped.

Capital Calls: CPPIB, Barclays, McPlant, DoorDash

26 February 2021

Concise views on global finance in the Covid-19 era: Canada Pension Plan Investment Board's CEO is booted for jab-line jumping; the UK bank wins a legal, if not ethical, victory over financier Amanda Staveley; Beyond Meat partners with McDonald’s and Yum; and DoorDash is too hot.

Central banks will have to fight reflation tantrum

26 February 2021

Improving economic prospects have boosted bond yields. Fed boss Jerome Powell and his global peers will welcome the cause but not the effect. If their rhetoric can’t halt the sharp rise in borrowing costs, they will be forced to ramp up asset purchases to safeguard the recovery.

AT&T clumsily cuts the cord on DirecTV

26 February 2021

The U.S. telecom titan is spinning off its pay-TV business in a $16 bln deal, six years after buying it for $67 bln. TPG will share control while kicking in just $1.8 bln for a 30% stake that includes a 10% cash coupon. It’s a pricey way to ease out of a disastrous acquisition.

Airbnb’s post-IPO showing is a pre-SPAC throwback

25 February 2021

The home-sharing app’s quarterly revenue fell 22%, yet still beat rivals. Because it went through its growing pains in private, Airbnb’s first results as a listed company show an already solid business. Many startups taking the blank-check route to market won’t have that luxury.