Capital Calls: Chubb and Hartford, Swimming pools 22 Apr 2021 Concise views on global finance: The company led by Evan Greenberg twice raised its bid for its Connecticut rival, but so far to no avail; a blowout quarter for private-pool maker Pool Corp points to buoyant wealth and spending trends, but only for some.
Chancellor: Regulators will kill the SPAC frenzy 20 Apr 2021 Like “Bubble Companies” of 1720 England, today’s blank-cheque vehicles are “carrying on an undertaking of great advantage, but nobody to know what it is.” That speculative era ended when authorities stepped in. The SPAC bubble may be more rational but will meet a similar fate.
Capital Calls: Goldman Sachs, U.S. currency report 16 Apr 2021 Concise views on global finance: The Wall Street bank’s communications veteran, Jake Siewert, goes back to the future, sort of; Taiwan is dubbed a forex interventionist but avoids manipulator label.
Capital Calls: Cellebrite good times 8 Apr 2021 Concise views on global finance in the Covid-19 era: The Israeli cracker of mobile-phone encryption is going public via a SPAC at a $2.4 billion valuation.
Naspers remains strapped to Tencent roller coaster 8 Apr 2021 Selling a $14.6 bln stake in the Chinese internet giant restocks the South African group’s war chest. But its residual $220 bln shareholding towers over other investments. The best hope for investors is that Naspers finds a way to shrink its weighting on the Johannesburg bourse.
Chancellor: Hwang has company in Keynes and Graham 6 Apr 2021 Long before the failed Archegos manager was even born, Benjamin Graham, tutor to Warren Buffett, and J.M. Keynes were teaching the perils of speculating on stocks with oodles of debt. It’s worth remembering their stories as Credit Suisse, Nomura and others count their losses.
Viewsroom: Everything we know about Archegos 1 Apr 2021 The extraordinary unwinding of Bill Hwang’s family office was one of those rare stories that connected Breakingviews columnists from Hong Kong, New York, Zurich, London, Melbourne and Washington into one big, hard-working family. Here are some of the lessons they learned.
Deliveroo is unsavoury appetiser for UK IPO revamp 31 Mar 2021 The food delivery group’s shares dropped up to 30% on their stock market debut. Hefty losses, a punchy valuation and founder Will Shu’s super-voting stock proved a turnoff. The flop should prompt a rethink of the government’s rushed plans to lure more such companies to London.
Chancellor: Value investing’s day is coming soon 30 Mar 2021 Between 1926 and 2009, lower-rated stocks outperformed more expensive “growth” shares by over 4% a year. Shifts in recent years to passive investing and tech stocks changed that. But a new study shows they outperform when stock market bubbles burst – as this one inevitably will.
Robinhood IPO comes with forest of perils 30 Mar 2021 The U.S. retail brokerage has expanded its user base and profile fast. But its main revenue, payments from market makers, is under pressure from regulators and rivals. Other parts of the top line are under pressure too. It’s hard to square that with a $30 billion valuation.
IPO laggards pay price for predecessors’ chutzpah 30 Mar 2021 Miner GV Gold, defence firm Leonardo DRS and soccer team Club Brugge shelved their listings. Investors have been stung by the poor performance of a wave of richly valued tech floats earlier this year. With the pipeline still full, hopeful issuers will now have to offer bargains.
Hedge funds take third strike vs. U.S. watchdogs 29 Mar 2021 So far Archegos’ default hasn’t matched the systemic impact of other crises. But last year short-term funding stresses forced a U.S. government backstop. Then there was the GameStop roller coaster. The industry can only sustain so many misses before regulators say enough.
ESG wave crashes into Volkswagen’s narrow straits 26 Mar 2021 U.S. eco-investors have pushed ordinary shares in the $153 bln automaker way above equal preference stock after CEO Herbert Diess upgraded battery car plans. Investors’ need for voting rights plus VW’s small free-float may explain why. But the lack of clarity invites a snapback.
Carbon markets have a Goldilocks problem 24 Mar 2021 Europe’s lowball carbon prices used to be a joke. Since the EU acted to clear a permit glut, they’ve spiked above 40 euros a tonne to a level just right to drive CO2 cuts. The challenge is to stop a political backlash if financial interlopers ramp prices too far, too quickly.
Naspers can tackle one-third of Tencent problem 19 Mar 2021 Despite listing a Dutch subsidiary in 2019, the South African company still trades at a big discount to its $239 bln stake in the Chinese internet giant. Its inability and unwillingness to sell are enduring factors. An outsize weight on the Johannesburg bourse is easier to fix.
BNP Exane deal takes equities dream an inch closer 11 Mar 2021 The $78 bln French lender will buy the rest of the brokerage it doesn’t own. The deal offers savings and better research to sell to clients. But CEO Jean-Laurent Bonnafé’s hope of challenging dominant U.S. banks requires other rivals to exit the business, like Deutsche.
Capital Calls: Digital art 11 Mar 2021 Concise views on global finance in the Covid-19 era: A blockchain-protected work by Beeple sold for $69 million at Christie's.
Britain’s zeal for financial reform could backfire 8 Mar 2021 Finance minister Rishi Sunak has endorsed changing rules to promote stock market listings and fintech. Insurance may be next. The drive not only risks a return to the pre-2008 “light touch” approach to oversight. It also makes financial services deals with other countries harder.
London IPO shakeup is more about SPACs than tech 3 Mar 2021 Finance minister Rishi Sunak plans to overhaul stock market rules to attract more listings. The changes may prevent some UK startups from defecting. But they also allow London to join the craze for blank-cheque offerings. The costs of weaker regulation will become apparent later.
Sustainable debt may be too popular for own good 2 Mar 2021 Investors are piling into bonds sold by companies such as H&M or Tesco which punish issuers for missing environmental targets. Demand has been such that the funding is now dirt-cheap. That could distort the price of the securities, and their intended effect.