Corona Capital: Cars, Kalashnikovs, Houses 6 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Japanese carmakers put their feet down thanks to China’s bounceback; Russia’s Kalashnikov gets a new owner; and rich-country housing markets look surprisingly cheery.
Richemont hedges online bets with Farfetch stake 6 Nov 2020 The Cartier owner is investing $550 mln in the deluxe fashion e-tailer, alongside Alibaba. That should help Richemont grab a larger share of China’s booming e-commerce market. But betting on a competitor of its own struggling online unit also looks like an admission of failure.
Bank investors blithely bet on benign EU lockdowns 6 Nov 2020 Shares in lenders like Deutsche Bank, Lloyds and BNP are higher than a month ago despite new restrictions in Germany, Britain and France. Short, mild quarantines may indeed leave them unscathed. Yet that’s a risky bet since past predictions of a “V-shaped” recovery were wrong.
Alibaba will feel the Ant sting 6 Nov 2020 The e-commerce giant’s close ties with the fintech company are now weighing on its $780 bln valuation. Ant’s yanked IPO and Beijing’s new credit rules come as growth at Alibaba’s core shopping business slows. Boss Daniel Zhang will have to start pulling harder on other levers.
Macquarie hits limits of diversification 6 Nov 2020 The $34 bln Aussie financial conglomerate suffered a 32% fall in half-year net profit as its investment bank generated a rare loss. Boss Shemara Wikramanayake likes to trumpet the array of revenue sources, but even done well, the business model provides only so much of a buffer.
Fox-Disney deal creates a new greater fool 5 Nov 2020 Sinclair has written down the value of sports networks it bought from Walt Disney by over $4 bln. The Magic Kingdom had acquired them in its overpriced carve-up of Rupert Murdoch’s media empire. That leaves a wily Fox, a lucky mouse, and a hapless Sinclair holding the bag.
Biogen gets $17 bln jolt of Alzheimer’s hope 5 Nov 2020 The U.S. biotech group's market value rocketed on Wednesday after regulators hinted they were persuaded its drug worked. A vote on Friday could send Biogen stock up more. Approval may also signal an easier regulatory touch for desperate diseases. That could help the whole sector.
RSA should finally tie knot via latest altar visit 5 Nov 2020 Five years after a union with Zurich Insurance fell through, the UK insurer has a 7.1 bln pound offer from Canadian and Danish suitors. RSA will grab an all-cash bid that comes with a 50% premium. The buyers’ need for fat synergies will discourage counter-proposals.
Green energy valuations could use stiffer tailwind 5 Nov 2020 Siemens Gamesa and Danish rival Vestas now have over 60 bln euros of orders for wind turbines between them. But valuations look toppy even if they hit margin targets. A possible Joe Biden U.S. presidency is also less likely to supercharge renewables with a Republican Senate.
Twitter is having its cake and eating it, too 5 Nov 2020 The social network’s label on inaccurate posts by U.S. President Donald Trump might have slowed their spread. Policing lends Twitter some credibility. But misinformation can rise as uncertainty lingers. A too soft approach enables Twitter to benefit from dangerous virality.
Corona Capital: GM earnings, Third-quarter readout 5 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: General Motors swerves around Covid-19 potholes; and U.S. companies look to have emerged from a difficult three months in better shape than expected.
European rivals give SocGen a lesson in efficiency 5 Nov 2020 Like the French bank, ING and UniCredit saw third-quarter net profit fall due to reduced revenue and more bad debt. Low interest rates will keep squeezing income. That puts SocGen, whose costs ate up 75% of its top line this year, at a disadvantage to its Dutch and Italian peers.
Crushed Ant is just the start of China techlash 5 Nov 2020 An abrupt regulatory halt to the company’s $37 bln IPO speaks to Beijing's waning tolerance for the clout wielded by online titans. Alibaba, Tencent and others have avoided the competition and privacy concerns dogging their Western counterparts. That could all be about to change.
Hostile Japanese deal has a lot to hammer out 5 Nov 2020 Furniture retailer Nitori is planning an unsolicited $2 bln takeover bid for DIY chain Shimachu, which has backed an offer from rival DCM. This sort of aggressive M&A is a welcome change in a clubby country. Destroying value in the process, however, might set back the movement.
U.S. election jam bolsters Big Tech as safe haven 4 Nov 2020 Technology stocks like Facebook and Alphabet rose more than non-tech peers after neither Donald Trump nor Joe Biden got a quick win. The sector has soared since Covid-19 hit. Likely Washington paralysis means tech giants should escape the most damaging antitrust backlash.
Close-shave U.S. election may leave many losers 4 Nov 2020 With no clear winner and the count likely to drag on, a divided government is getting more likely. Markets may be jittery temporarily. Those who stood to lose from a “blue wave,” like Wall Street and Silicon Valley, will be relieved. It bodes less well for struggling Americans.
Big democratic dividend paid out in 2020 election 4 Nov 2020 Setting aside the final decision, America at least deserves an A for participation. Voters turned out in record numbers, with perhaps two-thirds of those eligible casting ballots – the most in more than a generation. The world’s first modern democracy is far from moribund.
Bristol Myers deal gamble pays off twice over 3 Nov 2020 The pharma firm had to sell assets to close its $74 bln purchase of Celgene in 2019. It took a high-risk gamble – sell a blockbuster to Amgen and keep an unproven drug. A trial shows it got the better end of the bargain. Bristol increasingly looks like it bought Celgene cheap.
Chinese regulators add Ant to cursed mega-IPOs 3 Nov 2020 The fintech group suspended its record-breaking $37 bln share sale after watchdogs met founder Jack Ma. Other big offerings like Saudi Aramco and Facebook also hit temporary snags. Whatever happens next, the delay reflects badly on Shanghai as a venue for corporate fundraising.
Chinese tech giants take proxy war to New York 3 Nov 2020 Alibaba is jostling for a stake in U.S.-listed online fashion retailer Farfetch. That would put Jack Ma’s behemoth in contention with rivals JD and Tencent, who also have their fingers on the UK firm. Courting such investors will better equip Farfetch in its battle with Amazon.