Robinhood’s Wall Street bets aren’t yet working 9 Feb 2023 As retail stock trading and crypto have withered, so have the online brokerage’s main sources of income. So it has slashed costs, and staff, and is aggressively launching new products. But for now, it’s rising interest rates – not happy customers – that are holding Robinhood up.
Three carry trades for a new monetary policy era 27 Jan 2023 Central banks’ moves mean that investors borrowing money in yen and placing it in U.S. assets – a once-popular “carry trade” – are no longer onto a sure-fire winner. They can do better by shorting the euro and investing in Mexico, Brazil or Hungary.
Capital Calls: Activism, Bond spat, Airline M&A 18 Jan 2023 Concise views on global finance: Aggressive shareholder campaigns picked up in 2022, but activism is becoming an overcrowded strategy. Meanwhile, M&A machine Melrose takes on a fight that might not be worth winning, and German airline Lufthansa eyes a stake in Italy’s ITA.
How to navigate a bewildering market landscape 17 Jan 2023 The pandemic boom lured in new and younger investors. Now interest rates are up, asset prices are down, and ESG investing faces a backlash. In this Exchange podcast, Morningstar CEO Kunal Kapoor talks about personalising investment, the value of data, and taking the long view.
Capital Calls: Lucky LBOs, Byron Trott 12 Dec 2022 Concise views on global finance: Coupa Software, a business that tracks expenses has a message for investors weighing its sale to Thoma Bravo: it is doing terribly. Byron Trott’s BDT is taking grill-maker Weber private again for $3.7 bln, a discount to last year’s IPO valuation.
Hong Kong IPOs go back to a less luminous future 12 Dec 2022 Bankers and officials see the end of China’s Covid-19 restrictions as crucial to reviving the hub’s once-booming IPO market. That understates the city’s challenges. After vying for the hottest listings, the way investors and companies traverse the gateway to China is changing.
EU makes partial retreat in clearing crusade 30 Nov 2022 Brussels may make banks clear some euro swaps on the continent, rather than stop them using venues like London altogether. The move avoids the disruption of a blanket ban, but would still push up costs. Clearing risks are best tackled through closer regulatory cooperation.
Capital Calls: Funky debt shock 29 Nov 2022 Concise views on global finance: Germany property group Aroundtown won’t be the last to flout bond market convention on hybrid debt.
FTX collapse consigns crypto to fringes of finance 24 Nov 2022 Sam Bankman-Fried’s failed crypto exchange is a huge blow to the ailing sector. In this Viewsroom podcast, Breakingviews columnists discuss how firewalls helped protect banks, how the saga will embolden regulators, and what the future looks like for digital currencies.
Stablecoins fall few cents short of respectability 23 Nov 2022 FTX’s collapse highlighted what happens when funds supposed to be in one place turn up in another, or nowhere at all. That will reignite the debate on how to regulate digital assets. Out in front are stablecoins, which have a way to go if they’re to live up to their name.
Coinbase’s problems more than contagion 21 Nov 2022 The crypto exchange’s boss Brian Armstrong wants to reassure investors that digital currencies are safe. That makes sense: Bitcoin and other coins are its lifeblood. But the industry collapse is only one problem. Coinbase took on debt before its business model had been proven.
FTX flop evokes history’s great financial swindles 18 Nov 2022 Investment bubbles are generally accompanied by fraud. The collapse of Sam Bankman-Fried’s cryptocurrency exchange has elements of past scandals, from Dutch tulip mania to Bernie Madoff. Unusually, the 30-year-old seems to have previewed his own downfall, says Edward Chancellor.
FTX affords a turning point in venture governance 17 Nov 2022 New CEO John Ray uncovered patchy balance sheets and signs of looting at the bust crypto exchange. What he calls “a complete failure of corporate controls” means users may not get repaid. Formidable backers like Temasek and Sequoia would be crazy to make the same mistakes again.
Crypto watchdogs have a giant offshore problem 17 Nov 2022 FTX’s collapse should trigger tougher oversight of digital-asset groups in the Unites States and elsewhere. Yet big players, like Binance and the $40 bln decentralised-finance system, may stay out of reach. Clearer rules could bring more business onshore, but not all of it.
Crypto readies itself for a post-FTX hose-down 15 Nov 2022 The collapse of Sam Bankman-Fried’s empire exposed the vulnerabilities of a vast, unregulated world of digital finance. Rivals like Circle CEO Jeremy Allaire hope to prove there’s a safer side of crypto worth saving. He presents his case in this episode of The Exchange podcast.
Sam Bankman-Fried did financial system a favour 14 Nov 2022 The curly-haired cryptocurrency kingpin pushed regulators and politicians to legitimise assets like bitcoin. A few more years and his now-bankrupt exchange FTX would have burrowed deeper into mainstream finance, amplifying the damage. His downfall sends the process into reverse.
NFTs may not get back up off the canvas 7 Nov 2022 Global non-fungible token sales have dropped over 90% since January. Enthusiasts remain hopeful that NFTs can branch into new, more durable applications that are less like trinkets. But with rate rises upending niche assets, don’t bet on it.
Abrdn’s battered model may yet start to shine 4 Nov 2022 The British group meshes staid fund management with technology platforms for savers and wealth managers. The latter are growing and benefitting from higher interest rates. CEO Stephen Bird’s turnaround has a long way to go, but an undemanding valuation leaves plenty of upside.
UK tech flops expose perils of IPO forecasts 2 Nov 2022 E-commerce group Made.com has all but collapsed little more than a year after issuing sunny targets in an 800 mln pound float. Stock market duds Deliveroo and Funding Circle had optimistic guidance. When initial public offerings restart, investors should ignore the projections.
Risky debt selloff has much further to run 28 Oct 2022 Investors are dumping corporate bonds as interest rates rise. Relatively safe investment grade securities have fallen harder than those issued by junk-rated borrowers, which hit $650 bln last year. That will reverse as high-yield debt starts pricing in defaults and a recession.