Guest view: Woke markets present growing dangers 18 Dec 2020 The politicisation, and even weaponisation, of ESG investing is a concern, argues Frank Sixt, finance director at CK Hutchison. Exclusionary strategies are too prone to populist influence and ratings are chaotic. Absent quick changes, capital allocation distortions will rise.
U.S. airlines need rules as well as rescues 17 Dec 2020 They could get another $17 billion if Congress approves a new relief bill. Since American Airlines and its peers merit taxpayer rescues, bailouts ought to come with tighter strings. That could mean limits on debt, or ensuring they have enough cash to remain aloft for longer.
Viewsroom: Bank dividends and Chinese rentals 17 Dec 2020 European regulators’ cautious lifting of a ban on bank dividends leaves investors in limbo, plus details of an unusually bold growth strategy from Credit Suisse. And the collapse of China’s WeWork-like apartment rental middlemen has left many young tenants homeless and in debt.
EU’s Google-Fitbit approval sets risky precedent 17 Dec 2020 Antitrust tsar Margrethe Vestager approved the $2.1 bln deal with conditions. The buyer’s pledges, like giving rival fitness trackers equal access to the Android operating system, are great in theory but hard to monitor. Vestager may only spot the loopholes once the harm is done.
Puppy SPAC may bite investors in the backside 17 Dec 2020 Barkbox, a pooch products purveyor, is going public with a blank-check company valuing it at $1.6 bln. It’s smart to pounce on the opportunity created by booms in pet goods, subscriptions and SPACs. But Chewy, the 800-lbs Great Dane in the room, guards the market like Cerberus.
Corona Capital: Private jet deal 17 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Blackstone bets that plutocrats will be back in the air before the rest of us.
Rio’s new CEO reflects its lack of wiggle room 17 Dec 2020 Finance director Jakob Stausholm is the surprise choice to lead the $126 bln miner. Rio’s self-imposed difficulties in Mongolia and Australia meant an outsider might have been preferable. But given Rio may feel the need to soon replace its chairman, continuity is also important.
KKR finds lucrative new exit: German taxpayers 17 Dec 2020 The buyout firm is selling 25% of defence supplier Hensoldt to the government, which wants to block foreign buyers. Such trades usually incur a discount, but at $550 mln KKR is getting a rich premium. Dealing with increasingly activist states brings opportunity as well as risks.
Spanner in Tencent’s M&A machine could be useful 17 Dec 2020 Dealmaking has helped make the $700 bln tech company dominant in online books, music-streaming and e-sports. The strategy no longer looks sustainable as China's trustbusters intensify their scrutiny. Fewer acquisitions by boss Pony Ma might be better in the long run anyway.
Moutai investors are entitled to be uncharitable 17 Dec 2020 Over 200 shareholders are filing a rare class action suit against China's $350 bln booze champion over donations to government entities. Their complaint exposed a legal loophole regarding philanthropy. If Moutai abused the rules and gets away with it, others will exploit it too.
Robinhood gamification charge sends early flare 16 Dec 2020 Massachusetts regulators filed a complaint against the trading firm saying it aggressively lures inexperienced investors. The site has impressive stats, but many amateurs are benefiting from inflated markets. Too often the government takes action after they have been burned.
Weed merger smells funky, but could offer high 16 Dec 2020 Canadian pot producer Aphria will combine with Tilray to form the world’s biggest cannabis company by sales. The deal looks to help Tilray shareholders more. Yet as companies position themselves for a post-legalization world, such tie-ups will be necessary for survival.
Heathrow expansion faces long Covid-19 quarantine 16 Dec 2020 Britain’s Supreme Court cleared the way for the London airport to build a third runway, boosting its capacity by two-thirds. The pandemic-induced collapse in air travel makes passenger forecasts obsolete. Even if demand recovers, airlines will struggle to cover the extra costs.
ECB fiat anoints unlikely bank dividend heroes 16 Dec 2020 The regulator capped payouts as a proportion of earnings and assets. Well-capitalised lenders with richer valuations, like Nordea and KBC, now offer tiny yields compared with minnows like Liberbank. The risk is that a slow recovery causes restrictions to last beyond September.
Repsol stake sale could speed up green shift 16 Dec 2020 The 13 bln euro Spanish oil group may offload 25% of its gas stations arm. Flogging a chunk of what is a relatively highly valued business could raise 2.5 billion euros. That would provide critical firepower to get Repsol’s renewable energy capacity closer to rivals like Total.
Drahi’s hedge fund spat ends in acceptable defeat 16 Dec 2020 The telecoms mogul raised his lowball offer to buy out shareholders in his group Altice to 6.4 bln euros. That has won support from activists including Elliott, avoiding a legal tussle. Still, a final valuation below some peers suggests the gambit has partially succeeded.
Corona Capital: Filming drama, Spanish bank 16 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Actor Tom Cruise’s outburst about social distancing may not have been scripted, but it’s on point; Spanish bank Sabadell lines up a new leader.
Rubber-glove selloff gets out of hand 16 Dec 2020 The pandemic quadrupled the value of Malaysia’s Top Glove, the world’s biggest maker of protective handwear, to $13 bln. But investors eying vaccine developments are now deeply discounting its shares. As the herd hastily dumps Covid trades, there will be value left behind.
LG missteps into chaebol-challenge spotlight 16 Dec 2020 A pushy investor is unhappy with a spinoff plan by the South Korean empire’s $12 bln holding company. The carve-up’s financial benefits are hard to identify. That brings unwanted attention to a pioneer in corporate restructuring just as the country angles for stricter measures.
Chopper deal, like SPACs, is for aspiring moguls 15 Dec 2020 Blade, which helicopters the wannabe 1% to the Hamptons, is being bought by a blank check firm and kettle of plutocrats for $825 mln. The price assumes sales grow 16 times in four years, brassy considering 2020’s slump. Blade dreams big like the vehicle it’s riding to go public.