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.
Belarus’ gas muscle-flexing is self-sabotage 16 Nov 2021 President Lukashenko may regret his threats to disrupt flows of Russian gas to Europe. The pipeline crossing his territory is already of waning importance. By potentially hastening the opening of Russia’s Nord Stream 2 line to Germany, he’s bringing forward its retirement.
Breakdown: COP’s bare minimum is still a ratchet 15 Nov 2021 Glasgow’s UN global climate shindig needed to outline a clear path to halve emissions by 2030 and secure way more cash for developing states. It managed neither. Still, the final agreement, and a joint U.S.-China pact, make it harder for companies to delay on climate change.
Chancellor: China’s economic miracle is ending 11 Nov 2021 President Xi Jinping wants to deflate the housing bubble and deleverage the economy while maintaining high growth rates. But every country that, like China, adopted the so-called Asian development model eventually faced a crisis. There is no easy way for China to avoid one.
Bigger China property risk would be Xi blinking 11 Nov 2021 Worries about real estate contagion are growing, including at the U.S. Fed. Direct foreign exposure to the sector is limited, but it could drag down trade and investment portfolios. If Beijing relaxes its hard line, however, there’s a danger it will aggravate global inflation.
U.S.-China climate pledge adds psychological lift 11 Nov 2021 The world’s two biggest polluters surprised COP26 with a joint statement, albeit one with few new greenhouse-gas cuts. At least it tries to separate global warming from other diplomatic problems, and it should help others set their sights higher. Something is better than nothing.