Evergrande’s too-big-to-fail bind comes to a head 25 Sep 2020 The indebted Chinese property developer beseeched officials to approve its reverse merger plan. Although the company claims the letter is fake, the questions in it regarding systemic risk are real for investors and Beijing. A $21 bln payment due soon will force a reckoning.
Some of China’s best reformers are indexes 25 Sep 2020 Officials changed key rules to get FTSE Russell’s global fixed income index to include local bonds, potentially pulling $140 bln into the market. They made similar liberalisations to woo MSCI. There’s still work to do, but foreign money retains clout in Beijing.
Free retail tech-stock bets pile on risk 24 Sep 2020 Recent volatility in U.S. names like Tesla and Apple was probably driven, in part, by call options. While SoftBank’s big purchases raised eyebrows, retail investors’ punts may be a bigger concern. It's one consequence of the no-cost trades pushing big banks out of retail trading.
Buffett’s TV deal atones for his Oxy sins 24 Sep 2020 E.W. Scripps’ stock soared after the Omaha Sage’s Berkshire Hathaway helped finance its $2.7 bln takeover of a rival. It’s a stark contrast to the drubbing Occidental took after he enabled its Anadarko pounce. Though small, the Scripps-ION tie-up puts some shine back on Buffett.
Jefferies makes itself the envy of Wall Street 24 Sep 2020 The U.S. investment bank is hiking pay by 26% after a record quarter. Larger rivals like Goldman Sachs and JPMorgan will find that generosity hard to copy: Investors and regulators are unlikely to smile upon big bonuses, even if their traders think themselves just as deserving.
Sberbank’s rebrand puts style before substance 24 Sep 2020 Russia’s $67 bln lender is ditching “bank” from its name to sound more like a Big Tech group. Plans for $1 bln in 2020 non-financial digital revenue are a start, but it still has 100 mln banking clients. If the company wants its rejig to motor, it needs better transition targets.
Suez uses leaky defence against hostile bid 24 Sep 2020 The 9 bln euro utility put its water unit in a non-profit foundation. That frustrates bidder Veolia, which wants to sell the business to allay competition issues, but may not stop it. Even if the ploy works, adding complexity dents CEO Bertrand Camus’ pledge to be more efficient.
Corona Capital: Vaccines, Olive Garden, Oil 24 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: Vaccine concerns are bad for the economy; cravings for never-ending pasta bowls return; and oil practitioners tell sad truths.
Breakup could remove Benettons’ Italian roadblock 24 Sep 2020 Atlantia, the clan’s infrastructure group, is at loggerheads with Rome over the sale of its crisis-hit motorway unit. Spinning off the division could end the dispute by establishing a fair market price. It’s a risky manoeuvre, but the threat may bring the government to the table.
Siemens energy spinoff emits faint value pulse 24 Sep 2020 The 96 bln euro engineer’s energy carve-out is a curious mix of wind and hydrocarbons. Worth perhaps 17 bln euros, it will barely dent Siemens’ chunky conglomerate discount. For that, CEO-in-waiting Roland Busch needs to take a bigger knife to the remaining corporate sprawl.
Giant Ant frustrates Hong Kong dollar bears 24 Sep 2020 Appetite for the fintech titan’s mega-IPO has strengthened the currency and triggered intervention. Inflows to bid for and buy shares could exceed $100 bln. The city can handle the volume, but a long line of stock sales creates fresh headaches for doomsayers like hedgie Kyle Bass.
Hong Kong lender tests Elliott’s patience anew 24 Sep 2020 After a long review, $6 bln Bank of East Asia is ready to sell its life insurer. It also promises better cost controls and hints at more deals. Since the pushy hedge fund showed up in 2015, however, the stock price has halved. Perseverance may be less rewarding than in Argentina.
Palantir float marks peak investor apathy 23 Sep 2020 The cryptic data-analytics company is setting a guide valuation of $20 billion for its direct listing next week. Its novel governance means the three founders are in control indefinitely. Incoming shareholders should assume their views won’t count.
GoodRx IPO casts vote against U.S. health reform 23 Sep 2020 The company, which helps consumers find discounts on prescription meds, jumped 40% on its debut. True, the market is so hot that such a pop is now ho-hum. Still, GoodRx’s $18 bln valuation is a bet that a system riddled with middlemen is here to stay, however the election goes.
U.S. mortgage deals build on shaky foundations 23 Sep 2020 Public markets are luring two big mortgage firms as low rates and resilient house prices send loan demand to record levels. But 2020’s pandemic-skewed market is wacky, risky and unsustainable. Taking more share from banks could justify investor hype, though is hardly guaranteed.
Corona Capital: LVMH and Macron, Eyewear deals 23 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: LVMH has friends in high places; 1-800 Contacts has semi-disposable owners.
Russian tech giant Yandex leaps into superapp race 23 Sep 2020 As China and the U.S. battle over access for each other’s tech groups, the $23 bln search engine is snapping up online bank Tinkoff for $5.5 bln for a pricey 4 times book value. But it adds the fintech component to CEO Arkady Volozh’s ecosystem of ride-sharing and e-commerce.
UniCredit should hold out for a Tuscan freebie 23 Sep 2020 Rome wants to wedge ailing Monte Paschi into Italy’s No. 2 bank, whose CEO, Jean Pierre Mustier, has resisted political urges to merge. Holding out for a deal as good, or better, than rival Intesa got in a similar bank rescue makes sense. Consider the financial goodies on offer.
Elon Musk, investors share a rare dose of realism 22 Sep 2020 The Tesla boss’s plan to slash battery costs and ramp up sales put the stock into a 12% reverse. A three-year time frame jarred, and he oversold the event too. Musk’s pitches usually prompt an acceleration. It’s a welcome sign that CEO and shareholders are toning down some hype.
Xi puts clean energy to good use beyond climate 23 Sep 2020 China’s president says his country will be carbon-neutral by 2060. The pledge is credible because it’s in Beijing’s interests; Xi may also be trying to warm frigid European negotiators, and defang sceptics. It’s also plausible because China is exporting pollution to poor countries.