M&A will be lasting casualty of post-viral world 25 Mar 2020 Notions of national security will broaden as companies are expected to do their bit to keep stricken economies afloat. Buyers will face greater onus to show they won’t strip away assets and jobs. And as countries recover at different speeds, accusations of opportunism will fly.
Margin calls to deliver double body blow in crisis 25 Mar 2020 Fiscal and monetary bailouts targeted at sustaining ordinary workers may not help entrepreneurs who used their stock to lever up. WWE boss, and Donald Trump chum, Vince McMahon looks like the first casualty. But he’ll have plenty of company in the ring for this finance smackdown.
Virus will clear out overcrowded events industry 25 Mar 2020 Even in its early stages, Covid-19 closed gatherings from Coachella to conflabs on the virus itself. Stopgap online substitutes only underscore the value of face-to-face contact. That means the $30 bln industry should eventually recover, but with a slimmed-down list of operators.
Corona Capital: Bailout fees, Distressed junk 25 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: Wall Street brushes off its bailout pitchbooks. And high-yield debt suggests a deluge of defaults.
States have upper hand in health vs. economy row 24 Mar 2020 Donald Trump may end U.S. federal social-distancing restrictions earlier than medical experts advise with economic damage mounting. But lifting curbs is mostly up to governors and they'll shoulder health crises if they go too soon. Many businesses may prefer to play it safe, too.
Oil price war bolsters case for U.S. renewables 24 Mar 2020 The Saudi-Russia black-gold spat has drilled a hole in American energy suppliers’ finances and the country’s hopes for energy independence. Bailing out fossil-fuel companies is an option, but a more decisive switch to cleaner energy could make self-sufficiency an attainable goal.
U.S. bailout needs fewer diversions, more speed 24 Mar 2020 Lawmakers are wedging non-Covid-19 concerns into the stimulus bill. Some are worthy causes, like getting airlines to cut emissions. But the $2 trln-odd rescue package’s goal should be to get aid where it’s needed fast. As the 2010 Dodd-Frank Act showed, broader issues can wait.
Twitter’s revenue problem is bigger than Covid-19 24 Mar 2020 Users of the social network are flocking but advertisers are bailing as coronavirus content proliferates. But for revenue, it’s the ads that matter most. Twitter may hope to turn its new users into advertising dollars, but being widely read doesn’t guarantee being profitable.
Corona Capital: India on lockdown 24 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: India's prime minister, Narendra Modi, tells 1.3 billion people to stay at home as the country grapples with the early stages of an outbreak.
Chancellor: Coronavirus crash is inverted bubble 24 Mar 2020 Financial manias are often described in epidemiological terms, with “contagion” leading investors to become “infected” with speculative “fever”. In a sense, the response to Covid-19 may be a mirror image where fear replaces greed and errors of pessimism replace those of optimism.
Scrap bank dividends to help save the world 24 Mar 2020 Spain’s $39 bln Santander may pause 2020 payouts, freeing up capital to support lending amid the pandemic. A more radical move would be for banks to all cut 2019 dividends. Investors need cash less than virus-hit firms, and U.S. and European share prices already factor in a hit.
New Zealand airline rescue puts taxpayers in first 24 Mar 2020 The national carrier has received a $514 mln state lifeline that ensures its survival. A high interest rate should ensure any loan is repaid quickly, while shareholders share the pain through suspended dividends. It’s a model for other countries considering bailouts to follow.
World will be ready for some 2021 Olympic spirit 24 Mar 2020 It’s likely the Summer Games won’t go on as planned in Tokyo. Cancelling would be a defeat, but rescheduling for next year a symbol of resilience. By then, an economic recovery should hopefully be under way and global audiences will be drawn more than ever to the Olympic flame.
America could use a UK-style wage injection 23 Mar 2020 The $1.8 trln stimulus stuck in Congress has flaws, not least no stringent rules on retaining workers. It may also only last for 10 weeks. A British plan to help pay salaries would address such drawbacks in one shot and avoid more rounds of partisan squabbling by lawmakers.
Fed’s ultra-loose efforts will cast long shadow 23 Mar 2020 The U.S. lender of last resort is living up to its name. The latest extraordinary measures are needed but, like the response to the last crisis, may leave the system vulnerable to further debt buildup and asset bubbles. After the storm, policymakers will need a serious rethink.
Investors have bigger worries than GDP’s nosedive 23 Mar 2020 That U.S. economic output will plunge in the second quarter is clear. Whether it drops up to the 50% evoked by St. Louis Fed boss James Bullard is debatable. What matters more is how long virus shutdowns last and whether there are worse scenarios for investors to anticipate.
Guest view: End Iran sanctions on moral grounds 23 Mar 2020 The Islamic Republic was in desperate straits even before becoming the first state outside China to be badly hit by the coronavirus. U.S. sanctions are making its fight even harder. Taking the moral decision to roll them back would send a powerful signal, argues Chandran Nair.
Late German virus budget lacks neighbourly gesture 23 Mar 2020 Finance Minister Olaf Scholz unveiled a 756 bln euro plan to defend Europe’s biggest economy from Covid-19. That’s bigger as a proportion of GDP than those announced by European peers but he waited too long to act. His silence on joint euro zone bonds is also disappointing.
Corona Capital: Religious aid, Ad-spending slump 23 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. Vice President Mike Pence wants Americans to donate to religious institutions to bolster community aid. But churches have their own fiscal problems. Plus: TV ad revenue look set for a pounding.
Virus gives Africa a good debt default excuse 23 Mar 2020 The continent faces Covid-19 largely on its own as other countries strain to help their own citizens. A young population helps; weak health systems and stretched public finance don’t. Cash-strapped countries like Zambia and Ghana may stop paying what they owe bondholders.