BoE leaves bank traders’ virus paydays in limbo 1 Apr 2020 The Bank of England expects Barclays, HSBC and Standard Chartered to show restraint on future payouts. It’s ambiguous, but enough to worry bankers who profited handsomely from market moves in March. Unless the pandemic ends quickly, big bonuses will be hard to justify next year.
Meal couriers can gain by cutting the grocery line 1 Apr 2020 The likes of Uber Eats and Deliveroo may suffer from lockdown-induced restaurant closures. Meanwhile, grocery giants are struggling to deliver all the tinned goods and pasta that punters desire. That’s a recipe for cooperation, and perhaps profits for the cash-starved sector.
M&A protectionists get even stronger cover 1 Apr 2020 All foreign takeover bids will now be subject to review in Australia, shielding local companies from a recovering China and beyond. As anti-globalisation rises, other countries might retrench similarly. That could make it harder for the capital-hungry and encourage oligopolies.
Australia fuels global race to flatten jobs curve 1 Apr 2020 Prime Minister Scott Morrison proposes spending some $80 bln subsidising wages for six months. That would cover about 70% of median pay for most and equal 6.5% of GDP. Increasingly generous pandemic stimulus measures in one country ultimately could help workers in another.
U.S. bailout boasts dollars but not staff 31 Mar 2020 The Treasury has about two dozen senior leaders to funnel $2.2 trln in aid, while key positions are vacant. Goldman Sachs, which provided government recruits in the 2008 financial crisis, has about 410 partners overseeing $1.9 trln in assets. Bankers may fill the gap again.
It’s time for hedge funds to put up or shut up 31 Mar 2020 Some big-time money managers are now looking to raise cash to take advantage of volatility’s epic return. The asset class hasn’t impressed over the past decade. So this could be many firms’ last opportunity to show they’re worth their high fees. But they may have to act fast.
The Exchange: Verizon’s HR chief 31 Mar 2020 Christy Pambianchi oversees the well-being of more than 100,000 people. She explains how Verizon quickly rewrote the rule book to address the coronavirus outbreak from getting people set up at home to ensuring the safety of field employees providing critical infrastructure.
Hadas: The world needs to declare bankruptcy 31 Mar 2020 Debts have been out of alignment with the real economy for years. The coronavirus shutdown will magnify the imbalance. Finance has become an economic burden. A Chapter 11-style restructuring of the global balance sheet is the cure, but that’s too much for today’s politicians.
Global central bank stimulus presages gold surge 31 Mar 2020 Worldwide central banks have maxed out monetary stimulus. That makes all safe havens less safe except one. Gold’s growing supply scarcity and rising production costs make it solider than bitcoin, real estate or stocks. The 19th century asset is having a renaissance in the 21st.
Shadow lenders may get their day in the sun 31 Mar 2020 Private debt providers have more than doubled their assets since 2010 to over $800 bln. They also have over $270 bln in dry powder. Newer lenders may struggle as defaults mount. But this will create even more bargains for the winners. The Covid-19 crisis is their moment to shine.
Pre-virus era rule book will lead investors astray 31 Mar 2020 The market rout means Norway’s wealth fund and other money managers are less exposed to stocks than their ideal purely because shares fell so much relative to bonds. Rectifying the imbalance would unleash equity buying of $500 bln or more. But a return to old norms will be risky.
Corona Capital: Rich vs. poor, Carnival 31 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: The rich may save even more while the coronavirus rages while the poor will be further squeezed, and Carnival tries to bail out its sinking cruise business with a big sale of equity and debt.
Meituan Dianping delivers extra side of ESG 31 Mar 2020 The $58 bln Chinese takeaways-to-taxis company expects a rough first quarter after Covid-19 closed eateries and curbed travel. With the outlook hazy, Meituan instead directed investors to the aid it’s providing customers. The initiatives may be useful in a fight against Alibaba.
Hong Kong rues taking off its face mask 31 Mar 2020 A fresh wave of Covid-19 infections has forced the Asian hub into a crushing second phase of lockdown. It illustrates the challenges of getting back to business as usual, especially for more outward-facing economies. Breakingviews looks at life in a city beating a fresh retreat.
U.S. aid excludes startups, entrenches Big Tech 30 Mar 2020 Many Silicon Valley firms will miss out on $350 bln in new small business loans. In some cases, entities with the same venture capital investor are lumped together, pushing them above the 500-employee limit. Big players like Google can further entrench themselves.
Racial wealth gap weakens U.S. virus defenses 30 Mar 2020 Pandemics don’t discriminate over whom they infect, but the coronavirus will wreak its worst havoc on black Americans, who are overrepresented in the hardest-hit parts of society. The U.S. racial prosperity gap hasn’t narrowed in 50 years. Covid-19 is likely to drive it wider.
Private equity healthcare bets go from ill to ICU 30 Mar 2020 KKR and Blackstone gambled big on rising medical expenditures, buying emergency room staffing firms Envision and TeamHealth. Wars with insurers over aggressive billing practices left both companies weak. Cancelled procedures from Covid-19 will put both in critical condition.
Fed’s virus response delivers its everyman moment 30 Mar 2020 The U.S. central bank was criticized for its 2008 financial crisis response that aided Wall Street. The current health emergency is spurring the Fed to help Main Street through small business loans. The move helps counter its elitist image and bolsters its political clout.
Global dividend drought could rival 2009 30 Mar 2020 Companies like Ford, H&M and UniCredit have cancelled payouts. Government curbs and the need to conserve cash mean more will follow. Distributions had more than doubled since the last crisis-induced drop. Pension funds and other income investors will feel the lack of cash flow.
EU bank dividend pause could add $300 bln to loans 30 Mar 2020 Lenders like UniCredit and ING will follow regulators’ advice and halt payouts. That could add $30 bln to euro zone bank capital, supporting 10 times that sum in lending to virus-hit firms. Those who stick with their dividends, like UBS, will regret it if the crisis persists.