Hurricanes threaten to stir perfect economic storm 1 May 2024 Warmer oceans portend an unusually fierce 2024 season in the Atlantic, with two states already propping up their home insurance systems. The nightmare scenario is $200 bln of losses. Insolvencies would be a problem, but not as big as exorbitant premiums and lower property values.
Infrastructure may take toll on big asset managers 14 Feb 2024 Investors have sunk $1 trln in safe, stable assets; BlackRock just made a $13 bln bet on the sector. But success has been spotty and higher rates make investing harder. Plus the definition of infrastructure – which includes laundry and Scandinavian fish farms – is stretching.
Capital Calls: Disney 7 Feb 2024 Concise views on global finance: Boss Bob Iger nabbed Taylor Swift’s movie for his company’s streaming service, took a $1.5 bln stake in Epic Games and shipped more money to shareholders. But traditional TV is declining, and a new sports partnership makes for an awkward fit.
Capital Calls: UK homebuilders 10 Jan 2024 Concise views on global finance: Expectations of mortgage rate cuts helped Persimmon exceed sales targets, giving another lift to its resurgent stock price. The optimism, however, warrants a reality check.
Uncle Sam provides shaky base for Caterpillar 31 Oct 2023 The equipment maker beat third-quarter profit forecasts with help from Washington’s infrastructure bill. Yet half of the $550 bln package has been spent, and Caterpillar’s backlog is shrinking. Like other government-supported spending, federal aid can only help for so long.
Capital Calls: Ford, Amazon 26 Oct 2023 Concise views on global finance: The loss per car at the $45 bln automaker’s electric-vehicle unit has jumped 51% in a year. So-so earnings at the $1.2 trln e-commerce giant’s cloud division beat the even lower bar set by rival Alphabet.
Hostile $7 bln steel war will be forged in fire 14 Aug 2023 Cleveland-Cliffs’ run at 122-year-old metal producer US Steel comes amid a post-Covid slump in the commodity. Strategically and economically it makes sense. But the industry would go from four major producers to three. And the target is, at best, a reluctant participant.
Ukraine can rebuild without a Russian asset grab 30 Jun 2023 Using Moscow’s frozen assets to fund Kyiv’s $400 bln-plus recovery risks violating the rule of law. Suing Russian entities for the damages brought by the war is more promising. It allows Ukraine to build up claims that would be part of future peace talks.
Rebuilding Ukraine depends on luring private money 10 May 2023 International agencies and allied governments are taking care of the war-torn country’s immediate needs. An estimated $400 bln reconstruction bill, however, requires additional investors. Economic incentives and new laws would help attract them even before Russia’s invasion ends.
DR Horton plays ‘heads I win, tails I also win’ 20 Apr 2023 Rising cost of funding should be bad for homebuilders, but America’s largest posted stronger than expected earnings. Listings are down 25% from last year as homeowners want to hold on to their cheap mortgages. With scarce inventory, builders benefit from both low and high rates.
CRH’s firm foundations go beyond where it lists 2 Mar 2023 The $38 bln cement maker’s stock rose amid plans to move its primary listing to the U.S. The shift may indeed prompt a re-rating of CRH shares. But the main driver of the latter will be its even greater focus on an infrastructure subsidy-rich market, and on higher-margin work.
Capital Calls: Eli Lilly 1 Mar 2023 Concise views on global finance: The drugmaker is reducing the list price on its insulins by 70%. Problem is, few actually pay anything close to the sticker price. Insurers will probably prefer to use insulins from rivals, assuming they can keep negotiating big discounts.
Capital Calls: UBS fintech U-turn, UK housebuilder 5 Sep 2022 Concise views on global finance: CEO Ralph Hamers cancels the $1.4 bln acquisition of robo-adviser Wealthfront; Countryside Partnerships accepts a 1.3 bln pound offer from UK rival Vistry just three months after rejecting a higher bid.
St-Gobain activist hits right nails at wrong time 12 May 2022 Bluebell wants the 27 bln euro French construction group to rebuild by ditching its chairman and less profitable units. The upstart investor’s ideas have firm foundations. Its only problem is new CEO Benoit Bazin is already on the case, and the results are starting to show.
Capital Calls: ABB’s car chargers, Airport M&A 10 Feb 2022 Concise views on global finance: The Swiss engineering group’s listing plans come at an unfortunate moment; Britain’s John Menzies takes a risk with rejection of “opportunistic” approach from Kuwaiti air services group NAS.
Capital Calls: UK housebuilder tumble 13 Jan 2022 Concise views on global finance: Countryside Properties shares fell as much as 26% after it failed to capitalise on a UK housing boom.
Capital Calls: SEC, UK housing, Marijuana 10 Jan 2022 Concise views on global finance: The U.S. watchdog wants more private company transparency; The UK government’s decision to hit housebuilders with a four billion pound repair bill has lessons; and cannabis producer Tilray gives a glimpse of its life after its merger with Aphria.
China’s property crisis infects top-shelf market 15 Dec 2021 Shimao Group’s shares plunged after a deal between two affiliates appeared designed to raise cash quickly. On paper, the developer is in sound health; some of its crashing bonds enjoy investment-grade ratings. If those scores aren’t credible, more volatility is on the way.
Saint-Gobain’s U.S. deal will cement its Sika envy 6 Dec 2021 The $34 bln French construction firm tried and failed to buy its Swiss rival, which then went on a growth spurt. Saint-Gobain’s $2.3 bln offer for U.S. group GCP will help it decarbonise. The catch is that Sika made a similar move last month, and the returns on that look better.
Ariston IPO is enticing play on green energy wave 17 Nov 2021 The family-owned maker of heat pumps and water heaters is going public in Milan at a valuation of up to 4 bln euros. With demand for energy-efficient heating systems set to boom, it’s in a sweet spot. A discount to rivals A.O. Smith and NIBE Industrier should help inflate demand.