Money‚ Markets & Macroeconomics

Just Eat Takeaway’s best U.S. call is late dropoff

21 Jan 2022

The food delivery group paid $7.3 bln for Grubhub last year, but investors now attach little value to its American business. CEO Jitse Groen could sell it or spin it off, but only by recognising a big loss. Waiting for the unit’s prospects to improve might be a better plan.

ByteDance’s lukewarm 2021 presages a bleak 2022

21 Jan 2022

TikTok’s owner grew annual sales 70% to $58 bln. That’s slower than the previous year and is mostly from its home market. An advertising slowdown will further bite, while China’s crackdowns in education and video games have foiled nascent bets. Finding new growth will be hard.

U.S. relisting for Luckin would be hard to swallow

21 Jan 2022

China’s would-be challenger to Starbucks may be plotting a market comeback after $300 mln in fake sales got it booted from Nasdaq. It has restructured and is moving towards profitability, but otherwise is covered with red flags. Even floating on a local bourse would be ambitious.

Capital Calls: Siemens Gamesa, Psych SPAC

21 Jan 2022

Concise views on global finance: The 11 billion euro wind turbine manufacturer serves up its third profit warning in nine months; Hope for drugs to treat depression is tempered after rivals suffer mishaps.

Imperfect UK energy fix would still kill two birds

19 Jan 2022

Finance minister Rishi Sunak faces pressure to help consumers with high power bills without busting the budget. The least-bad plan would spread energy costs over some years. By curbing price pressures, he will also limit inflation-linked bond payouts and public sector pay hikes.

Christine Lagarde will win rate rise timing tussle

19 Jan 2022

Money markets imply the European Central Bank will hike twice this year, even though its boss says policy tightening is unlikely in 2022. She will have to work hard to convince markets, but reason is on her side. Wage pressures are less evident in the euro zone than in America.

China plays lonely game of Covid whack-a-hamster

19 Jan 2022

As Hong Kong culls 2,000 of the rodents, Beijing is blaming overseas mail for spreading Omicron. Dogged devotion to Covid-zero and the resulting disruptions are becoming increasingly farcical, and costly, as the rest of the world learns to live with the virus.

Alibaba’s U.S. cloud probe has big silver lining

19 Jan 2022

Washington is examining whether the $350 bln Chinese e-commerce giant’s data-storage business poses a risk to national security. That could hobble the unit’s global ambitions. But shareholders, at least, have little to worry about yet: They already ascribe almost no value to it.

Sony brings a knife to global video-games gunfight

19 Jan 2022

Investors erased 10% of its market value after Microsoft's $69 bln swoop for Activision. The Japanese group may lose access to some content but that looks manageable for now. The bigger worry is that Sony is no match against its far-larger rival as gamers look beyond consoles.

Peninsula Hotel owner checks in for expensive stay

19 Jan 2022

Hong Kong’s Kadoorie family paid almost twice market rate to add 12% to its controlling stake in the 156 year-old chain with luxury hotels from Paris to Tokyo. With shares trading at a third of net asset value, it suggests some post-pandemic tourism plays have yet to be booked.

The Fed is lowballing the path of interest rates

18 Jan 2022

Pundits love to guess when Chair Jay Powell will tighten monetary policy. But that matters less than where rates end up. Most Fed officials think this so-called terminal rate is around 2.5%. Given higher inflation, that’s probably too low. Markets are starting to realise that.

South Korea’s IPO K-wave swells on China crackdown

18 Jan 2022

LG Energy Solution’s record $11 bln float is part of a recent boom in local listings. Geopolitics and regulatory uncertainties in China are pushing investors to look elsewhere. Seoul’s performance has been mixed, but it stands to benefit so long as valuations don’t overheat.

The Exchange: Xpeng boldly goes

18 Jan 2022

The Chinese electric-car maker has navigated everything from shrinking subsidies to Covid-19. Embracing new ways of working is critical, President Brian Gu tells Katrina Hamlin. Future forays into Europe, the metaverse and flying cars will test the Tesla rival’s resilience again.

Capital Calls: UK bid gets hedge funds off hook

17 Jan 2022

Concise views on global finance: Private equity group Triton sweetens its offer for pharma group Clinigen to 1.3 bln pounds, raising the chances of hedge funds accepting the deal.

New Credit Suisse chair has grim streak to break

17 Jan 2022

António Horta-Osório has resigned from the Swiss bank after flouting Covid-19 rules. It’s less than a year since he arrived to steady the lender following CEO Tidjane Thiam’s ousting. Incoming Chair Axel Lehmann, formerly of UBS, has to hope his reputation is more durable.

Stressed Beijing will buck Fed’s tightening trend

17 Jan 2022

China's reported output grew 8.1% in 2021, well above target, but activity slowed sharply at the end of the year. Monetary easing has been restrained by debt concerns, but the central bank surprised markets with a rate cut on Monday. Low inflation and a strong yuan give room for more.

Battery IPO leaves LG Chem low on power

17 Jan 2022

The South Korean group's $11 bln spinoff was partly designed to unlock value. But the parent now trades at a discount to its 82% stake in its newly unleashed subsidiary. Its unloved petrochemicals-to-materials rump is failing to electrify investors. That looks harsh.

Unilever piles pressure on GSK spinoff plan

17 Jan 2022

GlaxoSmithKline rebuffed the sauce-to-soap group’s 50 bln pound bid for its consumer unit. Unilever’s plan faces challenges. But a listing is unlikely to earn a higher valuation for the Advil maker. To placate investors, GSK boss Emma Walmsley needs other buyers like J&J and P&G.

Biden’s bank cop choice will draw heat

14 Jan 2022

The U.S. president named Sarah Bloom Raskin to lead supervision at the Federal Reserve. She has slammed watchdogs as laggards on climate risks. The Fed has downplayed tying bank capital reserves to global warming. But if Raskin gets through the Senate, that could become a goal.

Covid-19 victory lap leaves Beijing exhausted

14 Jan 2022

China gloated over its pandemic control and took advantage of economic stability to launch risky crackdowns on tech and property. Now mini-outbreaks are prompting fresh lockdowns as an export boom looks set to slow. In 2022, malaise could prove harder to manage than disease.