New Zealand airline rescue puts taxpayers in first 24 Mar 2020 The national carrier has received a $514 mln state lifeline that ensures its survival. A high interest rate should ensure any loan is repaid quickly, while shareholders share the pain through suspended dividends. It’s a model for other countries considering bailouts to follow.
World will be ready for some 2021 Olympic spirit 24 Mar 2020 It’s likely the Summer Games won’t go on as planned in Tokyo. Cancelling would be a defeat, but rescheduling for next year a symbol of resilience. By then, an economic recovery should hopefully be under way and global audiences will be drawn more than ever to the Olympic flame.
Corona Capital: Religious aid, Ad-spending slump 23 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. Vice President Mike Pence wants Americans to donate to religious institutions to bolster community aid. But churches have their own fiscal problems. Plus: TV ad revenue look set for a pounding.
Masayoshi Son’s bold streak works in reverse too 23 Mar 2020 The acquisitive SoftBank boss plans to sell up to $41 bln of assets to retire debt and buy back the company’s deeply discounted shares. Balance sheet concerns had reached fever pitch. There are good reasons to worry, but Son is showing he has big levers and is ready to pull them.
Hong Kong signals virus battle will be a long slog 23 Mar 2020 The city has been lauded as an example of how to contain Covid-19. A second wave of infections, though, has prompted new tough measures including a tourist ban. It’s a sober reminder for the world that getting back to a post-outbreak normal will be a complicated and bumpy ride.
India Insight: Facing the pandemic on a shoestring 23 Mar 2020 As it braces for an outbreak of Covid-19, India lacks the authoritarian system that helped China cope and the advanced healthcare of Italy. India’s experience will illustrate the added struggle that poor, unruly nations face from rising disease and a straightjacketed economy.
China’s rate caution is conscious uncoupling 23 Mar 2020 The central bank is holding lending benchmarks steady as global peers slash. Bad debts and capital flight risk make big fiscal and monetary moves more dangerous than in 2009. That pushes the burden for stimulus to the government. Either way, structural imbalances will get exacerbated.
Hong Kong is ripe for more tycoon-led buyouts 23 Mar 2020 The Fung clan wants to take Li & Fung private. Online retail, the trade war and Covid-19 have battered the supply-chain group, making a $1.4 bln valuation look generous. As such opportunistic deals gather pace, investors in the Asian hub may start to demand more of buyers.
Corona Capital: Dining bonds 20 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: Restaurant industry cooks up a unique form of funding to help alleviate revenue wipeout.
Corporate bailouts should be quick, big and wide 20 Mar 2020 From large airlines to small restaurants, companies are pleading for state support to cope with plunging revenue. Governments can help by swiftly offering a cheap loan to any business that wants it. It’s the best way to prevent a severe downturn from becoming a prolonged slump.
Tortuous Japanese hotel deal takes viral twist 20 Mar 2020 Unizo is backing a sweetened $1.9 bln bid from Lone Star that matches Blackstone’s price. Top owner Elliott is ready to accept, eight months into the bidding war. Fresh Covid-19 volatility may accelerate an endgame, but also calls into question the frontrunner’s takeover plan.
Trade war truce sabotaged by virus battle 20 Mar 2020 Removing tariffs could provide an estimated $170 bln boost to the ailing global economy, yet any rollbacks hardly seem imminent. The White House just slapped fresh duties on Airbus. Relations with China are also worsening. Such intransigence only makes a bad situation worse.
Next G7 headache is a disorderly currency market 19 Mar 2020 The dollar is surging amid a dash for cash. Exchange rate swings are verging on the sort of unruly moves that policymakers say they dislike. Public expressions of displeasure can be the first line of defence. If these don’t work, official sales of the U.S. currency may be needed.
Emerging markets dollar lifeboat leakier than 2008 19 Mar 2020 Capital is heading out of Indonesia, Turkey and other emerging economies faster than in the financial crisis. Like then, the Fed should set up dollar swap lines with some of their central banks, and the IMF should boost reserves. But even these fixes might not stem the torrent.
Chinese travel site charts course out of virus fog 19 Mar 2020 As most of the world hunkers down in place, $12 bln Trip reckons it may be through the worst of it. First-quarter sales are expected to halve, but boss Jane Sun also sees a rebound at home where the epidemic may be ebbing. It offers a glimmer of hope in a sea of economic gloom.
Cheap gas drives auto industry to distraction 19 Mar 2020 With crude oil futures near $26 a barrel, drivers might lose enthusiasm for electric vehicles if governments put support on hold and let pump prices free-fall. But the push away from hydrocarbons is about more than petrol costs. Carmakers are ill-advised to let investment slide.
Virus likely to be a tale of three phases 18 Mar 2020 History and science suggest a serious hit – to the economy and health – lasting months, and varying depending on testing and behavioral changes. Flare-ups and uncertainty will continue until a vaccine is widespread in a year or more. After that, Covid-19 may just be another flu.
China’s news war risks collateral economic harm 18 Mar 2020 Beijing is expelling American reporters from major newspapers in retaliation for U.S. actions. The move could repel foreign investors, already inclined to discount chirpy, censored local financial reporting. And it aggravates the fake news bubble enveloping President Xi.
JD certifies that old buyback habits die hard 18 Mar 2020 The Chinese e-commerce giant unveiled a $2 bln share repurchase plan amid a global crash. A possible second listing in Hong Kong may explain it, and JD is at least using cash on hand. Corporate obsession with such financial engineering probably will be pandemic-proof.
South Korea’s boy band IPO may be peak K-pop 18 Mar 2020 Big Hit Entertainment, the label behind global phenom BTS, is eyeing a public market debut. Revenue hit $474 mln last year, but its fortunes depend on one act in a hit-driven business. With the coronavirus now eating into concert sales, a premium valuation sounds out of tune.