Financial Services

Battle for Russia’s Amazon crown is heating up

5 June 2020

The country’s biggest lender Sberbank may buy a 30% stake in online marketplace Ozon after untangling itself from rival Yandex. The deal could value it at more than $2 bln. There’s room for both players in a market enjoying a Covid-19 boost, but the usual political caveats apply.

JD stock sale helps illuminate China’s have-nots

5 June 2020

The $70 bln Beijing-based online retailer will be next with a second listing, in Hong Kong. Others are bound to follow, but not all 175 trading on New York exchanges can access this safety valve from a U.S. backlash. Some may need to go private and hibernate for a while.

HSBC Hong Kong tightrope walk comes with huge fall

4 June 2020

The $102 bln bank publicly backed a Chinese security law opposed by many of the city’s residents. HSBC has little choice but to toe Beijing’s line. But the risks to its Hong Kong business, and of being caught in the China-U.S. stand-off, will continue to weigh on its shares.

Reliance makes clever use of buy now, pay later

4 June 2020

Purchases by installment are hot in retail but the Indian conglomerate is bringing them back to capital markets. Investors buying into a $7 bln rights issue can settle up through November 2021. It sidesteps a Covid-19 cash crunch and boss Mukesh Ambani’s backstop covers up flaws.

Fintech superstars face brutal financial comedown

3 June 2020

Digital banks like Chime and Monzo have millions of customers but are tackling their first big crisis with scant revenue. Online lenders from Kabbage to Klarna face rising defaults, less new business, and funding concerns. Valuations, business models, even survival, look shaky.

Corona Capital: Bank fears, Payments M&A, Coal

2 June 2020

Concise views on the pandemic’s corporate and financial fallout: A new U.S. regulator wants cities to reopen to prevent bank robberies. Western Union may bid for struggling rival MoneyGram. And the pandemic is hastening the decline of U.S. coal.

NetEase fortifies itself against global disarray

2 June 2020

The $51 bln video-game producer is ready to raise $2.6 bln in Hong Kong. Quarantined customers have helped it defy a U.S. backlash against Chinese stocks. A secondary listing closer to home, following a tougher trail blazed by Alibaba, should add a useful layer of protection.

UK’s small-firm debt pile is ripe for forgiveness

1 June 2020

Companies have borrowed $23 billion in state sponsored “Bounce Back” loans. Many will probably default. Pursuing debtors will be politically awkward and dent growth. Better to link repayments to financial health or grant relief to companies that hire back furloughed workers.

Viewsroom: Hong Kong crunch

28 May 2020

U.S. Secretary of State Mike Pompeo declared the Asian financial hub no longer autonomous from China, days after Beijing unveiled plans to ban sedition and subversion there. Breakingviews columnists in the city untangle what it means amid the trade war, pandemic and protests.

Hong Kong financiers face Man Group’s terror

28 May 2020

During China’s 2015 crash, police detained the China chief of the British hedge fund and others; some state media blamed foreigners for sabotaging markets. Beijing’s proposed new security law will extend this attitude to Hong Kong. Bankers should worry as much as protesters.

Kotak cash call shows India Inc’s fear and greed

28 May 2020

A well-subscribed $1 bln share placement is sufficient to defend the richly valued lender against credit-quality doomsday. Barring that, it’s a massive war chest for acquisitions. Boss Uday Kotak, Asia’s richest banker, is prepared for both deep disruption and deep discounts.

Bankers’ share sale boom hints at fragile recovery

27 May 2020

Saint Gobain sold $2.7 bln of shares in Sika, one of several recent so-called block trades. Such deals are a quick way for banks to win business but, as Citi’s experience with the Swiss group shows, carry risks. Companies’ rush to exit suggests stock market gains may be fleeting.

Corona Capital: Texas bank merger

26 May 2020

Concise views on the pandemic’s corporate and financial fallout: Texas Capital and Independent Bank ditched their almost $3 bln deal as Covid-19 played havoc with oil-and-gas loans. It is, at least, a mutual decision.

Luckin spill will get China coffee war brewing

25 May 2020

The reeling chain once worth $12 bln is getting booted off the Nasdaq for fraud. Its brand might be toxic, but it has assets and ideas that Yum China, Tim Hortons and HeyTea could buy or adapt. Such deep-pocketed competitors may present a more formidable challenge to Starbucks.

Wall Street front opens wide in U.S.-China combat

21 May 2020

A political war of words, including over Covid-19, is intensifying and spurring more action. BlackRock’s Chinese investments are now targeted while attacks on U.S.-listed mainland companies threaten $1 trln in market value. It’ll be hard to avoid collateral damage in finance.

Regulators will owe banks a favour post-pandemic

21 May 2020

In contrast to 2008, lenders have so far helped cushion Covid-19’s economic blow, while central banks have propped up financial markets. The crisis highlights banks’ value as steady providers of credit. That will lead to some looser rules - and possibly a green light for M&A.

Index makeover sets fresh benchmark for Hong Kong

20 May 2020

The main Hang Seng tracker is welcoming companies with secondary listings and dual-class shares, opening the door to Alibaba, Xiaomi and more. That will help diversify baskets overstuffed with banks and such. It also underscores the local bourse’s plight to attract tech startups.

Sony embraces its inner conglomerate

20 May 2020

The Japanese giant is buying the rest of its financial arm for $3.7 bln as part of a broader shakeup. A new holding company structure clumsily tries to reposition Sony beyond its electronics roots. At least it’s managing the sprawl while thumbing its nose at activist Dan Loeb.

Corona Capital: Natural gas, Disney, Brazil

19 May 2020

Concise views on the pandemic’s corporate and financial fallout: Investors are too optimistic about natural gas; theme-park veterans take key roles at Disney; and Sao Paulo’s idea of bringing forward holidays to improve social distancing proves confusing.

Negative rates would trigger UK banking rollup

19 May 2020

British rate-setters including BoE Chief Economist Andy Haldane are contemplating taking policy rates below zero. Bank margins would suffer, but big ones like Barclays have more fee income to rely on. Stragglers like Virgin Money and Metro may have to put themselves up for sale.