Taiwan digs trenches in battle for chip talent 17 Aug 2022 Officials may force Foxconn to unwind an $800 mln deal with a Chinese chipmaker. This follows a crackdown on mainland companies poaching engineers, as Taipei tries to keep its tech expertise to itself. It could make a surprisingly powerful defence against hostile Beijing.
Voluntary delistings show China gets U.S. message 15 Aug 2022 Five state-owned firms worth $318 bln are leaving New York, citing thin trade and other funding sources. The People’s Republic and Washington have yet to fix an audit row that would purge all mainland companies from U.S. boards. Beijing is wisely preparing for the worst.
Reality will tame next Italy PM’s spending plans 11 Aug 2022 Giorgia Meloni is on track to lead Rome’s next government. Her rightist political alliance favours big tax cuts, fiddling with 200 bln euros of European recovery funds and state intervention in Italy Inc. High public debt and EU vigilance will puncture its wildest trial balloons.
U.S.-China relationship bleeds by a thousand cuts 8 Aug 2022 Beijing has suspended bilateral cooperation on drugs, climate, military and crime over Washington’s support for Taiwan. In the near term little changes; actual collaboration was minimal. The diplomatic freeze will nevertheless further poison a $600 bln trade relationship.
Capital Calls: UK antitrust watchdog/M&A 3 Aug 2022 Concise views on global finance: The Competition and Markets Authority’s change of heart over NortonLifeLock’s 6.2 bln pound takeover of UK group Avast was an opportunity for bold investors.
UK’s Bain ban sets oddly high moral bar 3 Aug 2022 Britain has barred the consultancy from public contracts due to misconduct in South Africa. The nod to ethics is overdue but tricky. Rivals McKinsey and KPMG, hit by related scandals, escaped UK censure. A similar stand against global skulduggery would red-card much of the City.
China’s economic plight ups Pelosi visit risks 2 Aug 2022 Despite Beijing’s warnings, U.S. House of Representatives Speaker Nancy Pelosi landed in Taiwan on Tuesday. Slowing growth and supply chain constraints make it hard for China to retaliate against American or Taiwanese firms. Oddly, that makes a military showdown more likely.
Capital Calls: Uber’s cash starts to flow 2 Aug 2022 Concise views on global finance: The $56 billion car-hailing service is growing rapidly and has started generating positive cash flow. It’s still overvalued, though.
Capital Calls: Heineken’s post-Covid bounce 1 Aug 2022 Concise views on global finance: Beer drinkers are quaffing more than before the pandemic, despite higher prices. But the Dutch brewer’s decision to scrap its 2023 operating profit margin target suggests it can’t entirely escape rising costs.
Capital Calls: Chevron rewards investors 29 Jul 2022 Concise views on global finance: The oil firm’s disciplined spending means it has been able to dramatically ramp up its buyback plan.
Russia is giving German industry a slow puncture 27 Jul 2022 Industrial users of gas are in the firing line as Moscow halts supply. Companies like BASF face a hit from higher input costs and energy rationing, rather than a Uniper-style bailout. The problem for Berlin is that sustained high prices could make production head elsewhere.
Europe’s $6 bln space M&A is governance Death Star 25 Jul 2022 France’s Eutelsat and Britain’s OneWeb may merge to pool the cost of new broadband satellites. It de-risks things for UK shareholders, including the state, but Eutelsat investors hate it. Reconciling the interests of two governments and financial backers looks a thankless task.
Global food crisis demands urgent Western response 25 Jul 2022 Russia’s invasion of Ukraine has pushed up food and energy costs around the globe. The most urgent problems are in poorer countries, write William Rhodes and Stuart Mackintosh. Rich nations offered insufficient help for Covid-19. International bodies can do better this time.
Berlin spreads pain in 15 bln euro Uniper bailout 22 Jul 2022 That’s how much equity and debt the government may pump into the gas importer driven to near-bankruptcy by reduced Russian supplies. Diluted shareholders, Finnish owner Fortum, and German taxpayers will share the burden. So will consumers who will pay higher prices for gas.
Russian grain deal gives food crisis a partial fix 22 Jul 2022 Moscow has agreed to lift a blockade on 20 mln tonnes of Ukrainian grain. That should reduce the scale of a Middle East food crisis, and ease prices which remain high versus 2021. Still, Russia could always renege on the new deal.
Russia’s macro health hides chronic deficiencies 22 Jul 2022 Oil and gas exports and lower imports mean the rouble is strong, and GDP hasn’t yet collapsed. But longer term, Moscow needs to aid inflation-hit consumers, and help sanctions-hit firms fill the gap left by departing Western rivals. Graft and a brain drain will make that hard.
Capital Calls: LVMH succession, Swedish Match 22 Jul 2022 Concise views on global finance: Bernard Arnault insures the luxury group against future family feuds; the oral tobacco company’s results will embolden deal resisters.
Ukraine needs hard cash more than debt relief 21 Jul 2022 The war-torn country needs $9 bln a month to cover its costs. Its central bank is running out of reserves. A bond payment freeze will help, but only at the margin. Western allies need to launch a coordinated aid effort to keep the country afloat.
Italy puts itself in a lonely, risky limbo 20 Jul 2022 Prime Minister Mario Draghi lost backing from key coalition parties in a confidence vote, likely prompting elections. The lack of a reform-minded government will hurt growth just as Italy faces a gas crisis. It also imperils its access to ECB bond buying and European Covid funds.
Capital Calls: Royal Mail, Europe’s chip champion 20 Jul 2022 Concise views on global finance: Britain’s postal provider is eyeing a potentially messy separation, but a nationalisation would make more sense; shares of ASML, which provides cutting-edge machines for chipmaking, look more appealing despite inflation and geopolitical worries.