UK governance overhaul faces messy application 18 Mar 2021 The government wants company directors to face bans and pay clawbacks if they cause losses or failure. The proposals’ fuzzy language may warp incentives, and lead to legal disputes. PM Boris Johnson’s desire to attract listings to Britain after Brexit may also blunt their teeth.
AT&T’s streaming is in a valuation dead zone 18 Mar 2021 Competitors including Disney, ViacomCBS, and Discovery have collectively added $250 bln to their market capitalizations in a year, thanks to streaming services. Despite HBO’s success, though, AT&T’s shareholders are worse off. Investors aren’t buying the mobile-content bundle.
Capital Calls: Airline IPO, Turkey’s central bank 18 Mar 2021 Concise views on global finance in the Covid-19 era: U.S. regional air carrier Sun Country Airlines’ IPO pop is justified by positive cash flow; Turkey shows how emerging-market policymakers face trickier choices than their rich-world peers.
Credit Suisse is better off without its funds unit 18 Mar 2021 CEO Thomas Gottstein split the Swiss group’s $477 bln asset management business from its private bank and installed a new head. Yet risk-management issues highlighted by the Greensill saga may deter clients. Industry pressures strengthen the case for selling to a rival like UBS.
National Grid’s $11 bln green switch looks smart 18 Mar 2021 The UK infrastructure operator is buying a big chunk of the local electricity distribution network, paid for by selling some of its U.S. arm and UK gas assets. CEO John Pettigrew is betting power assets will grow faster as the energy transition speeds up. It’s worth paying for.
BT safely clears two of three financial hurdles 18 Mar 2021 Britain’s telecom watchdog won’t cap premium broadband prices for at least 10 years, giving the former monopoly more confidence over its 12 bln pound fibre rollout. A 5G spectrum auction also went its way. That sets up the next challenge: fixing its 9 bln pound pension deficit.
Luckin may grow into its fraudulent numbers 18 Mar 2021 The bankrupt Chinese coffee chain has agreed a bondholder deal that implies both sides are upbeat about its future, a year after news of faked sales jolted investors out of a caffeine high. Breakingviews calculates Luckin may be percolating those figures for real by September.
Big Oil’s Nigeria win only partly hits graft fight 17 Mar 2021 A Milan court cleared Eni and Royal Dutch Shell of corruption in a $1.3 bln oilfield deal. Yet a three-year trial and big write-offs imply their victory is pyrrhic. With U.S. sanctions an ever-present threat, commodity bosses will still think twice about risking a graft charge.
Fashion’s supply ignorance is no longer bliss 17 Mar 2021 The U.S. is detaining products containing cotton produced in China’s Xinjiang region over forced-labour concerns. The burden of proof is on the importer, so groups like Inditex and Ralph Lauren need to know the fibre’s origins. Or some goods may fail to reach American shelves.
Three-way laser M&A loser will be winner 17 Mar 2021 Lumentum raised its offer for laser-maker Coherent to $6.9 bln, edging ahead of two rival bidders. All look to be overpaying – in Lumentum’s case by around $1 bln. Its shares have fallen as a result. Recovering some of that lost market value wouldn’t be a bad consolation prize.
Founder move confirms Pinduoduo’s coming of age 17 Mar 2021 Colin Huang is stepping back from the $197 bln e-commerce upstart and relinquishing special voting rights three years after taking it public. It’s a bold move by a Chinese tech tycoon as Pinduoduo nips at rivals’ heels. But it leaves a shortage of top talent as rising costs bite.
Capital Calls: New York, Allegro exit 17 Mar 2021 Concise views on global finance in the Covid-19 era: The Big Apple reigns in a new ranking of global cities, but the prize isn’t what it was; shareholders in Polish e-commerce group Allegro sell down early.
Vanguard rejigs China plan in wrong direction 17 Mar 2021 The U.S. money manager is giving up on an independent license to focus on a joint venture with Jack Ma’s embattled Ant. China’s $3 trillion industry is tough for foreigners to break into, and passive, low-fee funds are a tricky sell. Even so, now is the time to try harder.
China’s Zillow builds hope for hard-up developers 17 Mar 2021 Ke’s adjusted net profit tripled in 2020 despite Beijing’s hawkish tone on frothy prices. The $77 bln Tencent-backed home broker is worth more than its U.S. peer and Australia’s REA combined. Its success is tempting property giants to get stuck in but the model is hard to copy.
Family feud presses Korea Inc to cry uncle 17 Mar 2021 A power struggle between Kumho Petrochemical’s chairman and his nephew is headed for a shareholder showdown. The dissident’s Elliott-like playbook already has persuaded the $6 bln company to improve governance and hike dividends. Winning a board seat would send a strong message.
Guest view: SPAC secret sauce could turn sour 16 Mar 2021 When blank-check companies identify merger partners, they make a feature of presenting optimistic forecasts for their targets' business. Lawyers at Freshfields explain why that could be a recipe for later attacks by activist investors and what to do to prepare.
Big Tech’s data virtue-signalling has casualties 16 Mar 2021 Apple and Google are making it harder for marketers to track individual users. It’s a no-brainer: the changes will cement their dominance and please privacy-focused regulators. But mobile-game developers and the rest of the $330 bln online advertising sector will feel the pain.
Capital Calls: Netflix, ECB, Glass Lewis, Zalando 16 Mar 2021 Concise views on global finance in the Covid-19 era: The streaming service’s password-sharing crackdown twists the knife; the central bank worries about identifying bad loans; the proxy adviser’s sale underscores its place on Wall Street; the online fashion giant’s bold targets.
Volkswagen valuation merits shift to higher gear 16 Mar 2021 The German automaker’s shares rose on plans to double electric vehicle deliveries this year. Were they separate entities, the value of VW’s software arm and its battery car unit could exceed its 110 bln euro market cap. While spinoffs look unlikely, VW shares can climb higher.
UK finance watchdog finds rare area to act tough 16 Mar 2021 The Financial Conduct Authority launched its first criminal case against a bank for allegedly failing to spot suspicious transactions. The humiliation for NatWest may be as damaging as any eventual fine. Harsher enforcement is reassuring given post-Brexit deregulation elsewhere.