Big Oil’s green turn is justified by the numbers 7 Sep 2020 BP’s call to hike spending on renewables risks a repeat of past goofs. But hard data implies oil majors have been the ones eroding shareholder value in recent years. By comparison, the falling expense of wind and solar power and their lower cost of capital make them a safer bet.
Yum China adds spice to its tech credentials 7 Sep 2020 The operator of KFC and Pizza Hut has raised $2.2 bln in Hong Kong at a valuation above Alibaba. The secondary listing was permitted as digital orders dominate sales. But the hot badge has downside too: volatility in internet stocks risks a not-so-finger-lickin’ good debut.
SoftBank shows true colours with U.S. tech binge 7 Sep 2020 Masayoshi Son’s conglomerate has bought $30 bln of exposure to U.S. tech stocks with $4 bln of call options, media reports say. It’s yet another risky proposition that exposes the company’s weak governance. Months of steady progress suggest more buybacks might have been better.
Corona Capital: Banks and government, Ryanair cash 4 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: Britain’s finance minister Rishi Sunak could hurt taxpayers by forcing lenders to chase pandemic borrowers; and the Irish airline’s war chest will come in handy if rivals go under.
Spanish bank deal is model for battered EU lenders 4 Sep 2020 Caixabank and state-backed Bankia are discussing an all-share merger which would create the country’s biggest domestic bank. Cost savings potentially worth 4 bln euros would offset some pain from negative interest rates and bad debts. Other European countries should follow suit.
Pumped-up UK housing market faces slow puncture 4 Sep 2020 Property prices reached a record high in August, helped by pent-up demand. Rock-bottom interest rates, tax breaks and a rush to the countryside are propping up valuations. But with unemployment set to soar and banks culling the riskiest loans, buyers may be in shorter supply.
Budging a little can win Veolia its trash crown 4 Sep 2020 Suez’s biggest shareholder Engie wants a higher offer from its waste rival. Veolia’s debt concerns give it only limited leeway. Still, a hike to 17 euros a share would give Suez investors a premium over pre-pandemic levels and still leave the buyer with an acceptable return.
Ethiopian swoop would seal South Africa’s descent 4 Sep 2020 Pretoria’s bankrupt state airline may secure a parachute from Addis Ababa, a stunning reversal of fortunes from the 1990s. After apartheid, South African firms blazed trails across the continent. With corruption and dogma hobbling their home base, the tables are turning.
Review: MbS, Saudi Arabia’s sharpest prince 4 Sep 2020 From the Ritz rumble to unleashing a sovereign fund, "Blood and Oil" brings together the antics of the kingdom’s crown prince in a gripping page-turner. Mohammed bin Salman’s rise through grisly palace politics to unprecedented power elicits horror and, sometimes, admiration.
GoodRx turns U.S. healthcare tangle into hot IPO 3 Sep 2020 America's medical system is expensive, opaque and complex. That makes it a great place for a middleman like GoodRx. The drug discount finder is growing nearly 50% annually and has 33% operating margins. The big risk is a serious political push toward simpler, cheaper options.
Trump needs to make his business great again 3 Sep 2020 If the U.S. president fails in his re-election bid in two months' time, he can go back to developing golf courses, hotels and real estate. His properties were hurting even before the pandemic damage started. Maybe Trump could reinvigorate them. But he'd lack a winning pitch.
Fintech payment pioneers face war on two fronts 3 Sep 2020 Afterpay’s shares fell 10% after PayPal said it would offer a “buy now pay later” product. Unlike the Australian group, the U.S. money transfer giant is giving its version for free. Competition will aggravate the regulatory risk Afterpay and Swedish rival Klarna already face.
De Beers’ rocks are in an increasingly hard place 3 Sep 2020 Even before Covid-19, the Anglo American-owned diamond giant’s lunch was being eaten by Russia’s Alrosa and cheaper man-made stones. De Beers still has access to Botswana’s high-quality gems. But lockdowns are blunting the edge its quirky sales method has enabled.
Russian conglomerate finds discount hard to shake 3 Sep 2020 Sistema wants to put a value on resilient companies such as online retailer Ozon and wood pulp maker Segezha. That’s logical: the $2.7 bln group trades at a hefty discount to its investments. But its oligarch owner, poor governance and sanctions noise are lasting burdens.
Corona Capital: U.S. debt, Junk bonds, Vaccines 3 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. debt rises to levels not seen since World War Two; this year’s returns on high-yield debt turn positive despite the coronavirus; and Donald Trump’s hope of a vaccine by Nov. 1 is dangerously political.
Chinese lenders get undeserved help 3 Sep 2020 Big banks took a large hit last quarter; ICBC saw profit fall 25%. The central bank is letting interest rates rise to cool speculation, which should ease lenders’ pain - at the struggling private sector’s expense. Beijing’s rush to normalise policy could backfire.
Aussie finance scandal offers universal truths 3 Sep 2020 Storied wealth management giant AMP put itself on the block days after Chairman David Murray quit over the promotion of an executive accused of sexual harassment. The firm has been lurching from problem to problem for years. Fixing culture and regaining trust is hard to do.
Ad market recovery is all about Amazon 2 Sep 2020 Jeff Bezos’ firm was the top U.S. spender last year, splashing out some $7 bln in advertising. If it allocates the same share of revenue in 2020, it could more than offset slumps at other big advertisers. That may leave media firms even more reliant on the e-commerce colossus.
Corona Capital: Bumble IPO, SPACs 2 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: The Blackstone-backed dating site may be eyeing an $8 bln valuation if it goes public next year, more than twice its pre-virus price tag. Ex-MGM exec Harry Sloan adds online gaming to his blank-check company empire.
Quirky governance puts blemish on beauty tech IPO 2 Sep 2020 The Hut Group’s 4.5 bln pound London market debut is riding a pandemic-fuelled boost in online sales for own-brand products like Myprotein. But baking in a semi super-vote for founder Matthew Moulding, which effectively allows him to block takeovers, may dull future successes.