Carmakers’ green future gets revved up by Covid-19 18 May 2020 The virus has added pollution fears to climate-change concerns. That should be a boon for electric vehicles when production restarts. But cheap oil makes gas guzzlers look even more economical. State incentives like trading in clunkers for EV discounts would help tip the balance.
SoftBank’s clouds come with some silver linings 18 May 2020 A record $12.7 bln annual loss surpassed its warnings. But activist Elliott’s push is yielding results, funds are being spent less giddily and asset sales are on. The board is getting a revamp too, as Alibaba’s Jack Ma exits. The taming of boss Masayoshi Son is gaining traction.
Corona Capital: Travel companies, Oil 18 May 2020 Concise views on the pandemic’s corporate and financial fallout: Travel companies have sunnier days; oil traders have triumph of hope over experience.
Sustainable investing’s virus halo is premature 18 May 2020 Environmental, social and governance-focused funds outperformed peers in the first quarter, new BlackRock research suggests. Steady inflows are encouraging given the fear investors would ditch ESG in a crisis. But one quarter alone is not enough to judge the sector.
India’s economic pick-me-up earns half marks 18 May 2020 The five-part, $277 bln plan includes jobs for fleeing migrants and relaxed rules on debt defaults. A privatisation push is one of many longer-term vows. Upfront spending is sparing, however, and bailouts absent. Growth will take a bigger hit before it has a chance to roar back.
China’s chip giant serves nationalism and reform 18 May 2020 The $13 bln SMIC received a $2 bln boost from state funds ahead of a debut on Shanghai’s new STAR board. The firepower reinforces Beijing’s push for tech self-sufficiency. SMIC’s Cayman Islands structure will also test new listing rules that overseas-listed peers could use.
U.S.-China trade escalation singles out hostages 15 May 2020 Further U.S. restrictions on Huawei, along with TSMC’s decision to build a $12 billion American chip plant, heighten tensions between D.C. and Beijing. Multinationals like Qualcomm and Apple became giants by building scale to serve a global market. They are now vulnerable, too.
Breakdown: Fed is right to nix negative rates 15 May 2020 Futures markets are pricing in a small chance of policy interest rates going below zero even though Jay Powell, chair of the U.S. central bank, rebuffed the idea this week. Europe and Japan are already in that territory. Breakingviews explains why D.C. can afford to say no.
Corona Capital: Car racing, Royal Mail 15 May 2020 Concise views on the pandemic’s corporate and financial fallout: NASCAR is gearing up for a comeback; Royal Mail CEO delivers good news by departing.
Banks’ credit-line sweeteners are due a rethink 15 May 2020 Corporate lenders often woo clients with backup cash facilities. That came back to bite the likes of Bank of America and Deutsche Bank, as March drawdowns depleted their capital ratios. It changes the equation for lenders, and for firms which now face higher financing costs.
Delivery app dares Shanghai-to-New York IPO route 15 May 2020 Dada Nexus, backed by JD and Walmart, aims to raise $500 mln on the Nasdaq even as U.S. political backlash against Chinese companies intensifies. Luckin’s scandal raises fresh doubts, as do stock performances of recent debuts. And yet rival bourses are struggling to capitalise.
TSMC’s U.S. reshoring initiative looks wafer-thin 15 May 2020 The Taiwanese chipmaker unveiled plans for a $12 bln factory in Arizona. It will produce a tiny fraction of what Asian plants do with a small workforce and investment spread over nine years. It only goes to show just how hard it will be to move high-tech manufacturing to America.
Climate fight will survive pandemic’s mixed legacy 14 May 2020 Covid-19 distilled into weeks the havoc global warming will cause over years. Going green will help states avoid a permanent version of stranded airline, oil and other assets. The challenge is to balance short-term jobless worries with the need for a sustainable economic future.
Corona Capital: Air travel, Starbucks 14 May 2020 Concise views on the pandemic’s corporate and financial fallout: Airlines’ experienced hands offer warning; Starbucks begins dance with landlords.
Bad-debt puzzle has simple answer: consumer credit 14 May 2020 Banks like JPMorgan, Deutsche and UBS have set aside vastly different amounts to cover dud loans. Distinct accounting rules, geographies and economic forecasts matter. But the biggest determinant of lenders’ loan-loss allowances is exposure to credit cards and similar products.
Pandemic protection will be a governmental affair 14 May 2020 With insurance losses set to top a record $200 bln, enterprising risk managers and investors are trying to capitalise by creating insurance products to mitigate future crises. But unlike 9/11 and earthquakes, the pandemic’s cost is so big states must act as ultimate paymasters.
Las Vegas Sands exit indicts Japan’s gaming plan 14 May 2020 Sheldon Adelson's firm is scrapping a $10 bln project to open a casino in the country. Short licensing periods, tough government requirements, high costs and reluctant banks are deterring the best operators. It’s a bad omen for Tokyo’s gambling tourism ambitions.
Vedanta minorities can exact a better exit 14 May 2020 Tycoon Anil Agarwal wants to buy out a cash cow of his mining empire for $4.3 bln. True to form, the bid is opportunistically timed after a stock slump. Other shareholders have a route to improved terms but the group’s wider debt issues will limit how hard they push for more.
China’s JD flexes virus muscle memory 14 May 2020 Since forging its online business model during the 2003 SARS outbreak, the company has grown into a $70 bln force. With logistics providing a Covid-19 edge over Alibaba, JD’s quarterly sales are seen rising 13%. The momentum should help ease plans to raise $3 bln in Hong Kong.
Hadas: Welfare states will be big Covid-19 winners 13 May 2020 National systems of income support and social care are being expanded in the fight against the pandemic. Some of the special welfare measures are going to become permanent parts of governments’ repertoire. That will benefit marginalised groups, especially in the United States.