Beijing finally gives China shorts a helping hand 15 Jun 2021 Central government crackdowns and the collapse of U.S.-based fund Archegos have delivered selective relief to investors betting against Chinese companies listed in New York. Caution is warranted as outbound investment quotas ease. Patriotic reinforcements are on the way.
Fashion moves to the centre of activist crosshairs 14 Jun 2021 Covid-19 has exacerbated the $2.5 trln industry’s ESG-unfriendly flogging of cheap clothes. Recycling is no more than a partial fix for the problem. Inditex and H&M are insulated by their big family holdings, but Boohoo, Adidas and ASOS look vulnerable to investor attacks.
U.S. profit margins won’t get any better than this 10 Jun 2021 Companies are enjoying booming sales, keeping a lid on costs, and exerting pricing power. Goldman Sachs expects the net margin for the S&P 500 will be a stellar 11.5% in 2021. Analysts reckon it will go higher in 2022. Pressure from wages, and perhaps taxes, makes that a stretch.
Capital Calls: U.S. inflation, Big Tech’s ad gains 10 Jun 2021 Concise views on global finance: A 5% annual jump in U.S. consumer prices reflects warped comparisons; the prospects for U.S. advertising are getting hotter, and the largest Silicon Valley firms will be the beneficiaries.
Mondelez can be the bad bank of junk food 9 Jun 2021 The $89 bln Oreos maker is selling its stake in soda firm Keurig Dr Pepper while eyeing more wholesome food. Rivals like Nestlé are also under pressure to dump sweets, suggesting these shunned assets will get cheaper. The smart move might be to go against the healthy-eating tide.
Capital Calls: GEO meme, United Parcel Service 9 Jun 2021 Concise views on global finance: The meme stock good-vs.-evil fairy tale is wearing thin with the private prison operator; the logistics company is focusing on high-margin deliveries rather than volume, and investors aren't loving it.
Friends-turned-foes set China’s UPS on new route 9 Jun 2021 The $51 bln SF has long thrived alongside e-commerce giants. But boss Wang Wei is now under siege as the likes of JD expand their own logistics. Plans to raise new equity and spin off a subsidiary, among other things, should help it bulk up against deep-pocketed web rivals.
China’s Evergrande headache turns into a migraine 9 Jun 2021 Beijing wants lenders to stress-test their exposure to the developer, Bloomberg reports, which owes over $100 bln. In focus is troubled Shengjing Bank, but its tentacles stretch into larger institutions. With traders already anxious, a misstep by either side could upend markets.
Amazon’s living-wage trade-off is worth it 9 Jun 2021 The $1.6 trln firm’s pay of $15 an hour, double the U.S. minimum, has bolstered hiring in a competitive job market. That could hurt some small businesses. But it puts the company in an important position to pressure America’s largest employers – the government and Walmart.
Capital Calls: Warren Buffett’s taxes 8 Jun 2021 Concise views on global finance: A ProPublica report unveils the true tax rate of the Sage of Omaha, Jeff Bezos and other members of the uber-rich elite.
Electronic waste unearths green China unicorn 8 Jun 2021 Used-phone retailer Aihuishou wants to go public at a $5 bln valuation. Thanks to frugal and environmentally conscious shoppers, demand for second-hand goods is booming. The company has yet to turn a profit, but backer JD's deep pockets and rare ESG credentials should appeal.
It’ll take more than Dave to beat finance Goliaths 7 Jun 2021 The fintech named for the Israelite hero agreed to a $4 bln SPAC deal with Mark Cuban and other boldfaced names in the mix. The price isn’t bad. And Dave’s goal of taking on onerous overdraft fees is noble. But it’s a crowded space with many slingshots aimed at the mega-banks.
Capital Calls: Medline’s money machine 7 Jun 2021 Concise views on global finance: Blackstone and partners’ purchase of a majority stake in the $34 bln medical equipment maker could generate a big windfall for its founding family, without the clan members handing over the keys to their empire.
Capital Calls: Turkish gas, Generali, Garuda 4 Jun 2021 Concise views on global finance: President Erdogan’s “good news” on hydrocarbons smells off; the Italian insurer’s 1.5 bln euro bid for NN Group’s asset management unit may trigger a shootout; the Indonesian flag carrier’s long struggle to avoid bankruptcy is coming to a head.
Tesla disrupted by traditional mechanics 4 Jun 2021 May orders nearly halved in China, The Information reports, after safety concerns. This week’s triple recall in the United States makes a deeper dent in its reputation. Car upstarts have quality crises like everyone else, but they do more damage on the bleeding technology edge.
GoTo steers e-tail to smarter, fiercer last mile 4 Jun 2021 The enlarged Indonesian tech group will make gains in data analytics, helping it keep pace with $130 bln Sea. Getting goods closer to customers will trim order costs and boost on-demand services. It hints at complexities in the pair’s reliance on third-party logistics too.
GSK’s radical surgery is only a partial fix 3 Jun 2021 GlaxoSmithKline CEO Emma Walmsley is breaking up the $96 bln drugmaker. Spinning off the consumer unit may unlock value and give what’s left firepower for deals and drugs. Yet the split carries risks and will still leave the embattled pharma group facing a lengthy turnaround.
Capital Calls: Russia and US, Clothing IPOs, Food 3 Jun 2021 Concise views on global finance: The Kremlin tells its national state fund to get out of greenback-denominated assets; Rent the Runway thinks about going public; the FAO’s global food index hits its highest level in nearly a decade.
Japan exchange has a problem with its landlord 2 Jun 2021 The owner of Tokyo’s stock exchange premises regularly appoints directors from its top tenant. Bourse operator JPX has been in the vanguard of official efforts to improve boardroom governance and end such cosy ties. A hedge fund is right to push for better oversight closer to home.
Capital Calls: Greensill/Bluestone 1 Jun 2021 Concise views on global finance: The collapse of the supply-chain finance group may have left the governor of West Virginia personally on the hook for $700 million.