Politics

Omicron may give inflation a chance to bed in

29 Nov 2021

The new coronavirus variant could ease short-term price pressures if it triggers wider lockdowns that curb consumption. But if it prolongs supply-chain problems the reverse will be true in the longer term. Especially if cautious central bankers delay tightening monetary policy.

Telecom Italia will keep bankers busy in 2022

29 Nov 2021

KKR’s $12 bln proposal has put the telco in play. The process is likely to involve multiple bidders and key actors including French shareholder Vivendi and the Italian government. As with Telecom Italia’s 1999 leveraged takeover, it’s a boon for bankers, lawyers and consultants.

China’s bet on Covid-zero worsens odds for Macau

29 Nov 2021

Beijing’s draconian restrictions are a growing problem for Wynn, Sands, and other casino operators in the gambling hub. Resorts sit half-empty with gaming at 30% of pre-pandemic highs. They can live without foreign tourists, but local visitors are their lifeblood.

New Covid-19 variant raises risk of recovery limbo

26 Nov 2021

Britain and others have revived travel bans on South Africa amid a new viral mutation. Countries with low vaccination rates are most vulnerable. But if the virus evades vaccines, new lockdowns may be necessary at a time when governments and central banks have depleted firepower.

UK energy shakeout will hit price comparison sites

26 Nov 2021

Britain is pumping $2.3 bln into collapsed gas and electricity provider Bulb, the latest in a string of bankruptcies. The clear-out should mean a healthier array of UK energy suppliers. But having fewer operators will hurt the firms that make their money from customers switching.

Cox: Telecom Italia and the curse of the euro era

25 Nov 2021

The 1999 buyout of Italy’s phone monopoly baptised Europe’s new single currency. The years since have been terrible for the company and its many trophy-seeking owners, who have lost some $23 bln. Here’s why the latest offer from private equity firm KKR offers hope for redemption.

Capital Calls: Remy Cointreau, African petrol

25 Nov 2021

Concise views on global finance: With profits soaring, the cognac maker will face mounting pressure for M&A; commodity trader Vitol buys out minority shareholders in London-listed fuel distributor Vivo.

New German coalition has old problem with spending

24 Nov 2021

The three parties that will form the next government want to invest more in green and digital projects while respecting strict debt limits. Cutting budget subsidies and using off-balance-sheet vehicles may help. But the plans fall far too short of big-spending peers like America.

Foreigners will get the best buzz off German weed

24 Nov 2021

Berlin is preparing to light up its recreational cannabis market. With potential sales taxes and savings of 5 bln euros a year, the move could give the economy added puff. But German players may at first have to play second fiddle to Canadians that dominate the medicinal market.

Jamie Dimon sets his bank up to be China punchline

24 Nov 2021

JPMorgan’s boss was looking for chuckles when he said he’d wager that his employer would outlast the country’s Communist Party. Beijing is unlikely to appreciate the humour. As UBS and others can attest, the business blowback from perceived slights is often no laughing matter.

Fed will have to put inclusive jobs on back burner

23 Nov 2021

Chair Jerome Powell wanted a labor market recovery to filter through to women and minorities before hiking interest rates. But tighter monetary policy is the surest way to contain inflation, which is at a 31-year high. Price stability will trump the job prospects of these groups.

Voters are last brake on Turkey’s lunatic express

19 Nov 2021

Bullied by President Tayyip Erdogan, the central bank slashed borrowing costs to 15%. Fearing runaway inflation, the lira plunged to record lows. With few other checks on a leader at war with interest rates, 2023 elections may be Turks’ best hope of restoring monetary sanity.

Capital Calls: Biden’s deficit, Austria lockdown

19 Nov 2021

Concise views on global finance: A nonpartisan analysis finds a $160 billion hole in the U.S. president’s social programs; while new Covid restrictions spark selloff in European airlines and hospitality.

Biden shoots antitrust blank at oil giants

18 Nov 2021

The U.S. president wants regulators to examine anticompetitive behavior by oil and gas groups. Similar past efforts have fizzled because energy firms mostly take prices in a global market. But affordable gasoline is a political must even if it conflicts with Biden's bigger goals.

JD looks sturdier than Alibaba in Beijing’s storm

18 Nov 2021

Quarterly earnings at the Chinese e-commerce giants fell as regulatory and other woes take their toll. But the smaller e-retailer is gaining market share while revenue at Alibaba’s core online shopping unit barely grew. The diverging fortunes will bolster JD’s valuation premium.

Viewsroom: European bank M&A, De-Dutching Shell

18 Nov 2021

Big lenders in the euro zone are doing deals, but not the kind investment bankers dream about. BNP Paribas is in U.S. retreat, BBVA bulks up in Turkey and KBC goes Bulgarian. Liam Proud explains. George Hay explains why the Anglo-Dutch oil major is dropping the Dutch bit.

Europe’s vaccine bazooka is more like sniper rifle

18 Nov 2021

Germany may join Austria in imposing curbs on the unvaccinated to tackle soaring Covid-19 infections. Restricting freedoms is harsh but worked in France and the United States, which both saw inoculation rates pick up. It also avoids the economic pain of blanket lockdowns.

Glasgow’s carbon market overhaul is only half done

18 Nov 2021

The U.N.’s COP26 summit agreed tougher accounting standards for emissions credits, a market ex-BoE Governor Mark Carney hopes can swell to $100 bln a year. It’s a step forward, but loopholes remain. Companies that don’t like greenwashing have a strong incentive to help police it.

Australia deserves to pay climate risk premium

18 Nov 2021

Canberra adopted a net-zero emissions target mainly to keep the country from being punished by investors. Its newly released assumptions on electric vehicles, mining and more confirm a lack of seriousness in the plan. Sustained pressure from fund managers could make a difference.

Biden at war with himself on supply-chain battles

16 Nov 2021

The U.S. president wants to ease bottlenecks but punitive tariffs on Chinese-made port equipment, a vaccine employer mandate, and expiring contracts with a dock workers union stand in the way. Solving the problems require changing Biden's policies. Neither will be fixed soon.