UAE makes $35 bln bet on Egyptian virtuous circle 26 Feb 2024 The Gulf state is amping up support for Cairo by investing in a huge coastal tourist scheme. Prompt cash may make the recipient’s IMF loan deal more likely, and the UAE gets most of the project’s upside. But the plan reflects the scale of regional concern about an imploded Egypt.
How a syndicated loan can funnel cash to Ukraine 26 Feb 2024 Western allies could extend credit backed by Kyiv’s claim for war damages against Russia, and then use $300 bln of frozen assets to pay off the loan if Moscow refuses to pay reparations. The widely recognised principle of ‘set-off’ can help overcome legal and practical hurdles.
Strategic clarity fuels US oil giants’ M&A spree 23 Feb 2024 Exxon Mobil and Chevron are buying up rival drillers on expectations that demand for crude will still be robust in 2050. European rivals like Shell are less bullish about oil, but reluctant to pile headlong into green energy. That helps explain the transatlantic valuation gap.
Higher rates insidiously creep into the boardroom 22 Feb 2024 Stock prices have been on a tear, in anticipation of the Fed reversing its policy. The exuberance ignores longer-term consequences of growing interest expenses. To pay them, many companies will have to cut back elsewhere. Share buybacks, capex and M&A look especially vulnerable.
Central banks’ waiting game plays with fire 21 Feb 2024 Western policymakers fret that if they cut rates too soon inflation may rebound. But keeping monetary policy tight has costs. Staying put as price growth abates means rate-setters squeeze consumers and companies, raising the odds of blowups in areas like commercial real estate.
The rocky road to an ‘eBay for carbon credits’ 20 Feb 2024 Markets that trade the right to emit greenhouse gases have a ropey history. Still, in this Exchange podcast Harvard University Fellow Ely Sandler argues that companies and countries may increasingly pay carbon taxes via emission permits – and unlock cash for the green transition.
Capital Calls: S&P/Visible Alpha 20 Feb 2024 Concise views on global finance: The financial analytics firm’s $500 mln bid for alternative data provider underscores the importance of bringing proprietary data to funds that trade on momentum. But as Lyft’s rally after a typo showed, automation has its limits.
Europe risks falling into Levant’s powder keg 20 Feb 2024 War in Gaza is worsening already dire economic conditions in Egypt, Lebanon and Jordan. Western aid is unlikely to solve their deep problems. Despite efforts to outsource its migration issues, the European Union may find some displaced by a protracted conflict reach its borders.
Joe Biden 2.0 offers chance at less global tension 19 Feb 2024 In a second term, the US president might preside over less fractious geopolitics and trade friction. He also could make a fresh push to fight climate change. American allies shouldn’t get their hopes up, though; such an agenda would face obstacles at home and abroad.
Coinbase adds more wobbly legs to stool 16 Feb 2024 Coinbase posted its first annual profit since 2021, sending its shares up 12%. But the $46 bln digital currency exchange is moving from volatile trading fees to even shakier revenue streams, such as interest on deposits and legally ambiguous staking.
Navalny’s death will make Putin weaker 16 Feb 2024 Russian opposition leader Alexei Navalny has died in jail. In the country, he will become a symbol of what President Putin fears most in democracy and political freedom. In the rest of the world, his passing will undermine the voices arguing for a softer policy toward Moscow.
Europe defence requires more than a $75 bln boost 16 Feb 2024 Non-US NATO members will spend 2% of GDP on their militaries in 2024. Yet the extra $75 bln a year it entails remains below what Europe will need. Ukraine, technological advances and US wavering mean their true requirement is more like 3% of their output.
UK growth alarm is best focused on the long term 15 Feb 2024 The shrinkage in Britain’s economy at the end of 2023 belies an improving climate. With falling inflation, low unemployment and a stirring housing market, rates may soon fall. Yet pre-election fiscal giveaways may impede a fix to the real issue: ongoing poor productivity growth.
Japan loses a big title, and perhaps its way 15 Feb 2024 A surprise technical recession means the country is no longer the world’s third-largest economy. Even more unnerving is a slew of weak data that make it harder for the central bank to end an era of ultra-low interest rates. Companies’ wage negotiations will be a deciding factor.
Indonesia votes for status quo, ups the ante 15 Feb 2024 Prabowo Subianto is the next president, polls show. He won after pledging to continue the policies of outgoing Joko Widodo. But the $1.4 trln economy, Southeast Asia's biggest, faces a slowing China and crashing nickel prices. He needs to pick a credible finance minister fast.
Infrastructure may take toll on big asset managers 14 Feb 2024 Investors have sunk $1 trln in safe, stable assets; BlackRock just made a $13 bln bet on the sector. But success has been spotty and higher rates make investing harder. Plus the definition of infrastructure – which includes laundry and Scandinavian fish farms – is stretching.
US markets grapple with mysterious contradictions 13 Feb 2024 The S&P 500 Index hit new heights, led by tech stocks. At the same time, derivatives traders expect the Federal Reserve to slash rates. The latter will not happen without a recession. One of the camps is destined to be wrong. Equity investors should root for slower rate cuts.
Europe’s wilting bourses get fresh cause to unite 12 Feb 2024 The likely de-listings of Italy’s Saras and Tod’s add to a wider exodus from euro zone stock exchanges. Part of the problem is a lack of new European companies to replace them. But Europe could also help itself if its equity market rules and trading were less fragmented.
Oil investors are adrift in Red Sea rip currents 9 Feb 2024 Crude prices at around $80 a barrel are lower than in early October despite conflict in Gaza, attacks on shipping vessels off Yemen, and US-Iran tensions. That reflects expectations of weak demand and ample supply, underpinned by lax sanctions. All three could soon change.
NY bank’s slide exposes regulatory booby trap 7 Feb 2024 A credit-rating downgrade adds to the misery of investors in $3 bln New York Community Bancorp, whose shares have more than halved in a month. A plan to rebuild its balance sheet will take many months. Watchdogs, who can’t afford for fear to take root, face a different timeline.