Becoming a bank would shrink but not squash Ant 11 Jan 2020 Regulators are set to treat Jack Ma’s financial group more like a regular Chinese lender. Though it has enough capital to support its online credit business, growth would be crushed. A bank-like valuation would imply it’s barely worth a tenth of its previous $300 bln price tag.
Intel woes provide timely lesson for Samsung 8 Jan 2021 The South Korean giant will end 2020 with a 26% rise in quarterly operating profit, thanks largely to its chip dominance. Its U.S. peer, by contrast, has fallen behind rivals and faces calls to break up. The prolonged leadership vacuum at Samsung risks a similar gradual decline.
Stage is set for a record year of M&A 6 Jan 2021 S&P Global, AstraZeneca and Salesforce helped push fourth-quarter deal volume over $1 trln. Flush balance sheets and ultra-cheap money add momentum. So do CEOs struggling to find growth on their own. Regulators could get tougher, but the 2015 peak of $4.2 trln is within reach.
Walgreens $6.5 bln deal is a mutual back-scratch 6 Jan 2021 AmerisourceBergen is buying the drug chain’s European distribution business, in what amounts to a relatively attractive way to expand internationally. Walgreens gets a slug of cash – and CEO Stefano Pessina gets one step closer to one day potentially taking the company private.
Corona Capital: U.S. college football 6 Jan 2021 Concise views on the pandemic’s corporate and financial fallout: U.S. college football programs are in a talent arms race for coaches, a bit like companies' quest for top-ranked CEOs, despite the pandemic's impact on revenue.
Tokopedia neatly channels Indonesia’s potential 5 Jan 2021 The online shopping site, valued at $7.5 bln, lags Singapore’s Sea in the country. But the smaller company stands out for its single focus on one of the world’s fastest rebounding and digitalising economies. No wonder everyone from Gojek to Peter Thiel sees it as a hot target.
Jack Ma’s absence feeds into China Inc fears 5 Jan 2021 The Ant and Alibaba founder has not been seen in public for two months. Amid Beijing’s crackdown on both the fintech and e-commerce empires, keeping a low profile seems prudent. A history of Chinese tycoons mysteriously disappearing, though, is enough to warrant some concern.
Urge to purge 2020 from memory should be resisted 4 Jan 2021 Nearly everything that could go wrong did. The pandemic threw plans – and predictions – out the window. As the world emerges and maybe slingshots into a Roaring Twenties rebound, old appetites will return. But the divisions Covid-19 exposed in our societies can't be forgotten.
Overpayment detected in $8 bln Teledyne deal 4 Jan 2021 The $14 bln U.S. industrial conglomerate is buying rival FLIR Systems. Cost savings cover less than half of the $1.6 bln premium. Both firms sell sensors, but focus on different wavelengths, so it’s possible combining could deliver faster growth. But that’s hard to deliver.
Deposits will become a growing liability for banks 30 Dec 2020 Converting savings into loans is the bedrock of banking. Yet near-zero interest rates and a pandemic-induced deposit surge are squeezing revenue. Some lenders will charge customers to look after their cash. Upstarts will decide regulated deposit-taking is not worth the hassle.
Stock rewards for all would be valued virus legacy 29 Dec 2020 Woolworths pared manager bonuses so that over 100,000 employees could get a little slice of equity in the Aussie supermarket chain. More companies should follow suit. What’s good for Silicon Valley and Wall Street is good for everyone, starting with frontline pandemic workers.
Vaccine jostling calls for U.S. rethink on pay 28 Dec 2020 Amazon, Uber and Cargill are among those lobbying for their workers to get priority access. They have a solid case for saying their staff are essential. But employing a workforce that’s critical to the national interest should come with responsibilities as well as privileges.
Ant and Beijing begin delicate, dangerous dance 28 Dec 2020 Having forced the fintech giant to suspend its IPO, officials laid out demands that will curb growth. The orders are vague and allow for manoeuvre, but a forced break-up is possible. While the government needs Ant to support private firms, that’s scant comfort for investors.
Pandemic pet boom keeps running for new top dogs 24 Dec 2020 Locked-down humans adopted more four-legged friends in 2020 and upped spending on pet supplies and medicine, causing the stock prices of firms like Chewy and Zoetis to rally. Old-school pet chains also benefited, but as nimble e-retailers take more sales, the pack may thin.
Xi Jinping dumps coal in Alibaba’s stocking 24 Dec 2020 Investors wiped $60 bln off the e-commerce giant’s market value on Christmas Eve after Beijing launched a formal probe into its suspected monopolistic behaviour. Officials signalled further scrutiny on fintech affiliate Ant too. The empire Jack Ma founded faces a long winter.
China’s WM Motor will overtake Tesla wannabes 24 Dec 2020 The electric-car maker is set to list on Shanghai’s Star Board. It’s late to market and underhyped compared to Elon Musk’s operation and local rivals like Nio or Xpeng. But having targeted the mass market, a gross profit will already be in sight when it lists.
Online education will weed out stragglers 24 Dec 2020 Covid-19 rang the bell for virtual-school investment. Outfits like Byju’s in India and China’s Yuanfudao are raising money while Citi reckons edtech spending may double to $360 bln by 2024. Fierce competition should spark consolidation in 2021, leaving only the best in class.
Premiumisation will reach its limits in year ahead 23 Dec 2020 Makers of beer, cosmetics, even laundry liquid, managed to grow by charging consumers more for fancier versions of everyday items. Some affordable luxuries will endure in hard times. But lower incomes will force groups like Unilever and Heineken to refocus on volume over price.
Beijing attacks from rear in online grocery war 23 Dec 2020 Officials summoned Alibaba, Pinduoduo and other e-commerce giants to a disciplinary meeting on their Groupon-like supermarket operations. The $14 bln market is vibrant, but state media say dumping and supplier gouging is rife. Beijing’s assault on tech companies is widening.
WhatsApp, Google can thrive as super-apps in India 23 Dec 2020 Entrepreneurs that designed the country’s unique affordable payments system are pushing to lower fees and unbundle the online market in shopping, food delivery and mobility. It’s a new kind of Robin Hood e-commerce that could extend the reach and curb the power of tech giants.