German carmakers step on Chinese electric pedal 29 May 2020 VW is taking big stakes in two Chinese EV firms, while Daimler may invest in battery-maker Farasis Energy’s $480 mln IPO. Demand remains tepid, oil is too cheap, and the targets look richly priced. But these deals lock in supply, and position both to compete with Tesla in China.
Corona Capital: Saving/not spending, Pandemic Pig 29 May 2020 Concise views on the pandemic’s corporate and financial fallout: what to make of falling spending and the growing taste for meat alternatives.
China can live with a less special Hong Kong 28 May 2020 The entrepôt's unique autonomy brought prosperity without Beijing having to cede control of the economy and people. Hong Kong’s importance has dwindled, however, and may even be holding China back. A U.S. move to strip its special status only shows how disposable that status is.
Chinese online tutor gets lesson in multiplication 29 May 2020 GSX Techedu deflected one sloppy short-seller attack and a second sensational one. A third from Muddy Waters calling the $7 bln company a fraud hit as Luckin buckled and Congress moved on U.S.-listed Chinese stocks. Growing scepticism will require targets to have strong defences.
TikTok’s best move is a clean break from ByteDance 28 May 2020 The video app’s Chinese parent is shifting power away from the People’s Republic. That’s unlikely to win over American lawmakers suspicious TikTok will collect consumer data and send it back to Beijing. ByteDance’s most realistic political option is to sell its rising star.
Vacant arenas fortify TV’s financial grip on sport 28 May 2020 When games restart, distancing rules will mean emptier soccer and baseball stadiums. Sports which rely less on live crowds, like golf or Formula 1, may benefit. More home viewers should further boost the value of media rights, already worth $51 bln, and offset lost ticket sales.
Big Tech faces a post-virus global tax onslaught 28 May 2020 The OECD’s efforts to fashion a fairer global tax system are at risk of stalling. France and Britain already levy charges on the revenue of Facebook, Amazon and others. With public debt soaring and the pandemic boosting Big Tech’s sales, a messy patchwork of levies could ensue.
Viewsroom: Hong Kong crunch 28 May 2020 U.S. Secretary of State Mike Pompeo declared the Asian financial hub no longer autonomous from China, days after Beijing unveiled plans to ban sedition and subversion there. Breakingviews columnists in the city untangle what it means amid the trade war, pandemic and protests.
Corona Capital: GE cash burn, Macy’s lifeline 28 May 2020 Concise views on the pandemic’s corporate and financial fallout: General Electric’s cash flow will be more negative than expected as Covid-19 damages its aviation and power businesses; and U.S. department-store chain Macy’s borrows more, buying time but not much else.
Hong Kong financiers face Man Group’s terror 28 May 2020 During China’s 2015 crash, police detained the China chief of the British hedge fund and others; some state media blamed foreigners for sabotaging markets. Beijing’s proposed new security law will extend this attitude to Hong Kong. Bankers should worry as much as protesters.
Kotak cash call shows India Inc’s fear and greed 28 May 2020 A well-subscribed $1 bln share placement is sufficient to defend the richly valued lender against credit-quality doomsday. Barring that, it’s a massive war chest for acquisitions. Boss Uday Kotak, Asia’s richest banker, is prepared for both deep disruption and deep discounts.
Hong Kong gets thrown under “make China pay” bus 27 May 2020 America’s top diplomat Mike Pompeo says the city is no longer autonomous. That decision initially hurts the financial hub more than it does Beijing. But an escalation in unrest would set the scene for worse economic pain for China, with a U.S. election raising the stakes.
Hadas: Covid gives monetary extremists false hope 27 May 2020 Those who fear rising prices think anti-pandemic stimulus will surely unleash uncontrolled inflation. Deflation-worriers are just as certain that the global demand shock means their old enemy is lurking. Both disasters are possible, but policy and habit point to price stability.
Corona Capital: Hockey, HBO, Minority businesses 27 May 2020 Concise views on the pandemic’s corporate and financial fallout: A plan to get pucks back on the ice offers a sporting template. Meanwhile, HBO’s streaming service may have missed its moment, and a survey shows minority-owned businesses have mixed feelings about life after Covid.
Renault-Nissan repair job needs governance fix 27 May 2020 The French carmaker and its Japanese partner are merging production in a bid to revive their grim alliance. Yet the union’s uneven power split is a brake on integration. Luckily for incoming Renault CEO Luca de Meo there’s a way to mend relations, without losing control.
U.S. Senate could shift China risk into overdrive 26 May 2020 A bipartisan bill would impose sanctions on Beijing officials and local banks for new Hong Kong curbs. Tensions between the two superpowers are already high. The legislation would bump that up several notches. And the economic fallout would be worse than that of the trade war.
Apply political-capital discount to Abe’s cash 27 May 2020 Japan’s prime minister is prepping $930 bln of fresh stimulus. Funds are critical as the economy staggers, but the crisis also offers a golden chance to ram through overdue changes for Japan Inc. Alas, Abe’s sinking popularity hobbles his ability to do much more than spend.
Bad borrowing habits come home to roost in India 27 May 2020 A London court ordered Anil Ambani, the brother of Asia’s richest man, to pay $700 mln to Chinese banks led by ICBC over a personal guarantee on a loan. The case is indicative of the unorthodox funding practices used by the country’s tycoons. It should help clean up their acts.
Vegan boom is heading for a meat-fuelled bust 26 May 2020 Sales of animal product-free food soared in May, bumping up shares in the likes of Beyond Meat. Viral outbreaks at slaughterhouses suggest vegan supply chains are more durable. But as beef giant Tyson cuts prices and a slump looms, appetite for pricier foods could wane.
Corona Capital: Texas bank merger 26 May 2020 Concise views on the pandemic’s corporate and financial fallout: Texas Capital and Independent Bank ditched their almost $3 bln deal as Covid-19 played havoc with oil-and-gas loans. It is, at least, a mutual decision.