Investors can live without U.S. bank dividends 7 Apr 2020 Only a months-long severe crisis would make JPMorgan consider cutting quarterly payouts. It’s similar for many U.S. lenders, which are well padded and don’t pay big dividends. Yet that makes turning off the tap a fairly painless way to wean investors off an illogical fixation.
EQT finds LBO immunity formula for virus era 7 Apr 2020 Air Liquide is in talks to sell its disinfectant unit to the Swedish private equity firm for around 900 mln euros. Even with rising medical demand, the purchase looks brave given its rich valuation. Still, the risk of future epidemics could see the buyout group double its money.
Cox: How long can you last in this environment? 7 Apr 2020 That’s really the only question that CEOs need to answer when they start releasing quarterly earnings, penning shareholder letters and holding virtual annual meetings in the coming weeks. Cash is the king of metrics. Employee welfare comes next. Avoid predictions. And no whining.
Corona Capital: Lufthansa, JPMorgan, Foursquare 7 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Lufthansa parks hopes of a quick airline-industry recovery in the hanger; JPMorgan skirts close to committing an early earnings faux pas; and Foursquare checks into the M&A market.
Japan goes deeper into unknown with $1 trln binge 7 Apr 2020 Prime Minister Shinzo Abe is preparing a stimulus worth 20% of GDP as his government announces a state of emergency to combat the coronavirus. Already at the edges of unconventional monetary policy, Tokyo will now further test new frontiers for public debt in peacetime.
Dubai bailout would spark a complex quid-pro-quo 7 Apr 2020 With a hefty debt pile and an economy disproportionately hit by Covid-19, a repeat of the emirate’s 2009 rescue by neighbour Abu Dhabi is possible. Back then, Dubai renamed its tallest building in return for support. This time, help might have fewer strings attached.
European insurers face virus location lottery 7 Apr 2020 Regulators are divided on investor payouts. French watchdogs have forced firms to cull dividends to absorb pandemic losses, while German and UK ones have been less draconian. Investors in the likes of Allianz and Aviva may face greater regional differences even after the crisis.
Breakdown: Europe’s coronabond conundrum 7 Apr 2020 The pandemic is stretching state finances, particularly in heavily indebted countries like Italy. ECB bond-buying helps; so would clubbing together to provide cheap loans. But it’s not enough. It’s time for the single currency to consider joint bonds. Breakingviews explains why.
Holding: Bad Covid-19 lawsuits can infect the good 6 Apr 2020 Calling crisis profiteers to account in court may be both justified and informative, as the 2008 financial meltdown made clear. Yet cases like a waxing parlor’s demand to stay open during the pandemic are not only absurd, they undermine the legal system. Real victims pay a price.
Videoconferences zoom toward market-boom reckoning 6 Apr 2020 The coronavirus has been a boon for companies hosting virtual meetings. That’s bringing forward the kinds of longer-term user numbers that Slack and Zoom predicted when they went public – and boosting their stock prices. But it’s not clear there’s enough profit to go around.
Orbanomics may be Hungary’s best political shield 6 Apr 2020 Covid-19 has enabled Viktor Orban to rule by decree. Busy with the virus, the EU may fail to stop abuses. But the prime minister's power grab may be limited by Hungary's economic reliance on foreign investment, which gives the like of BMW more scope to register disapproval.
3M fight exposes free trade’s underlying condition 6 Apr 2020 Globalization created wealth and helped keep prices down but wasn’t built for a pandemic where each country puts itself first. Donald Trump’s crude attempt to keep 3M’s N95 masks for Americans is dangerous but not unprecedented. What emerges after the virus should be more robust.
Europe lockdown easings are hard act to follow 6 Apr 2020 Austria hopes to reopen some shops next week, with Germany following suit from mid-April. Britain and America, with inferior testing and higher virus transmission rates, are well behind. And compared with China’s timetable, the West’s guinea pigs might still be jumping the gun.
Jamie Dimon sets virus playbook benchmark 6 Apr 2020 Covid-19 has prompted JPMorgan’s boss to pen his most useful letter to shareholders in 14 years atop the $275 bln bank. He is talking his book, especially on regulation, but Dimon has laid out what customers, investors, employees, and even voters, have a right to expect.
Rolls-Royce secures extra viral flying time 6 Apr 2020 The aero engine maker axed its 2019 dividend and borrowed an extra 4 bln pounds. That buys it time to cope with grounded planes which are costing it 50 mln pounds a week. Its key market, long-haul flights, may be the last to recover. But Rolls should have enough cash in the tank.
Today’s virus vices store up tomorrow’s problems 6 Apr 2020 The pandemic is encouraging people to give in to baser temptations. Porn, booze, tobacco, weed and chocolate consumption is rising. It’s perhaps understandable: Even the WHO reckons stress needs to be managed. But excesses now will only add to a bleaker and costlier future.
Beijing tries to fake it ’til it makes it 6 Apr 2020 Local officials and state media are portraying a China back at work. Reassuring consumers is critical to supporting domestic demand as exports crash. But this rosy picture is blurred. Outsiders trying to model a recovery must be more discerning than ever reading the tea leaves.
Money-market funds feel stimulus ripple effect 3 Apr 2020 Some Fidelity funds turned away investors for fear that yields on the products could turn negative. It’s not the same as a dreaded breaking-the-buck moment, but is still a headache. Massive issuance of new Treasuries should help, but it’s another case of unintended consequences.
Thruppence: A guide to Covid-19 lockdown pursuits 3 Apr 2020 Roughly half the world’s population is now subject to social restrictions because of the coronavirus. That makes weekends a new kind of challenge. In an occasional series where Breakingviews columnists give more than their usual tuppence, here’s how some are spending their time.
Starboard takes no prisoners, offers no pity 3 Apr 2020 A pandemic hasn’t stopped the activist fund from going hard on companies like eBay and GCP. Other notoriously difficult investors – Elliott, Icahn – are showing restraint. Covid-19 shouldn’t be a shield for badly run businesses, but cutthroat tactics are best used sparingly.