Italy’s bank rescue has side order of moral hazard 10 Aug 2021 UniCredit may buy most of sickly Monte dei Paschi, with government help. It’s unclear if that means taking on its junior debt, which would be a windfall for creditors at the expense of Italian taxpayers and EU rules. Yet bond markets are starting to hope for something juicy.
Samsung boss parole sets high bar for dealmaking 10 Aug 2021 Jay Y. Lee’s early release from prison ramps up pressure on him to use the tech powerhouse’s $82 bln cash pile to make splashy investments to close a gap with rivals in chipmaking, autos and more. Samsung’s heft will force creative thinking. It’s a tricky combination to manage.
UN climate warning is a gauntlet for green finance 9 Aug 2021 Carbon emissions from human activity are “unequivocally” to blame for global warming, a new report says. Financial markets are belatedly coming up with solutions, like a Prudential-inspired plan to close coal plants. All their creativity is needed to tackle the planet’s crisis.
Aramco’s tricky balancing act gets easier 9 Aug 2021 The Saudi oil giant’s ultimate boss, Crown Prince Mohammed bin Salman, wants it to help fund the kingdom’s pivot away from crude. A strong first half makes it easier to do that and pay dividends. Unlike last year, Aramco can also meet its various demands without debt spiking.
Capital Calls: U.S. jobs, BBQ IPOs, Wm Morrison 6 Aug 2021 Concise views on global finance: The Delta variant puts a leisure job boom at risk; two grill makers’ floats show the IPO market isn’t frozen; Fortress strikes in the bidding war for a UK supermarket.
Chinese media’s social mania maddens markets 6 Aug 2021 State newspapers are having a field day slapping down consumer brands like liquor giant Moutai and Tencent. If an editorial hints a sector isn’t harmonised with Xi Jinping Thought, traders bail. Yet not all comments represent policy. In fact, some create buying opportunities.
Cox: Saudi may have a super-green future after all 5 Aug 2021 At a recent G20 summit, the kingdom didn’t just align with U.S. and European climate crusaders. Its delegates even tried to break an impasse with India on coal. It’s a sign of how confident Saudi has become in its ability to manage, and profit from, the energy transition.
China’s Delta outbreak casts pall over growth 5 Aug 2021 A dozen provinces have imposed travel curbs, mass testing and other strict measures to try to contain the highly contagious strain. Yet 60% of the population is probably vaccinated. Beijing’s zero tolerance for new cases has limited economic impact so far, but that could change.
Chancellor: Bringing down the Red Curtain 4 Aug 2021 Recent shocks from Beijing are reminders that while investors in the West are protected by the rule of law, China’s markets are characterised by the “rule by law”. Investors shouldn’t forget Beijing has the final say on how capital is allocated and who gets paid and who doesn’t.
Ferrari’s new boss faces early electric test 2 Aug 2021 The EU wants to ban new fossil fuel-powered cars from 2035. That’s likely to force incoming CEO Benedetto Vigna to accelerate the $42 bln sports-car maker’s plans to shift to battery power. How to do that without denting its luxury margins will require some deft driving.
Review: Turning Beijing’s playbook against it 30 Jul 2021 China wants to become a global hegemon, Rush Doshi, the White House’s lead China wonk, argues in “The Long Game”. To halt its advance, he suggests copying Beijing’s strategy, and discouraging U.S. corporate engagement with China by tweaking taxes. He has few allies and less time.
Evergrande’s downward spiral runs off the page 30 Jul 2021 Beijing managed the market impact when it allowed quasi-state entity HNA to slide into bankruptcy. It will face more complex problems if privately-run Evergrande folds. The longer authorities wait to signal support, the more pages it will need to add to its corporate disaster playbook.
China makes market tea leaves very hard to read 28 Jul 2021 It took a while, but an unrelenting stream of crackdowns finally spooked investors. The country’s blue-chip stocks have slid near bear-market territory from a February peak. Although some sectors have been spared, only the truly daring will venture into riskier areas now.
Billion-dollar whales fill 1MDB’s wide net 28 Jul 2021 Malaysia has clawed back funds almost equal to the amount the U.S. says was misappropriated from the sovereign fund. After chasing down Goldman Sachs, it has plenty of targets left to cover $5 bln of unfunded dues. Infamous 1MDB’s shortfall could soon become a surplus.
IMF skims over non-viral risks to global economy 27 Jul 2021 The emergence of new highly infectious Covid-19 variants could wipe about $4.5 trln off global GDP by 2025, the international lender warned. Its economic update pays less attention to policy missteps, market ructions, or more bankruptcies. Yet these also pose a threat to growth.
The Exchange: Spanish PM Pedro Sánchez 27 Jul 2021 In his attempt to revive the economy, Pedro Sánchez wants investors to give Spain more love. Local and global politics make that a challenging proposition. John Foley met with the prime minister as he set out for Wall Street, Silicon Valley and Hollywood but not Washington, D.C.
Greener anti-flood investments will be win-win 26 Jul 2021 Germany’s worst natural disaster in decades and deluges in China have sparked calls to build more dams and reservoirs. There are better ways to protect people, land and buildings from both too much and too little water. These alternatives will also appeal to investors.
Capital Calls: Twitter, Domino’s Pizza 22 Jul 2021 Concise views on global finance: Jack Dorsey’s social network reported a 74% bump in revenue despite a slowdown in adding new users; meanwhile, Domino’s Pizza shows one thing that hasn’t abated in 2021 is customers’ love of takeout pies.
UK’s Northern Ireland antics imperil other goals 21 Jul 2021 Less than two years after agreeing a bespoke deal for the province, Boris Johnson wants to change it. A lack of trust with the European Union complicates a compromise. A new Brexit standoff will also threaten the prime minister’s other ambitions, such as a global climate deal.
EU dirty money watchdog sounds less toothless 21 Jul 2021 Brussels wants to set up a single agency to prevent future Danske Bank-style scandals. The new body will take time to set up and could be watered down by politicians. But direct oversight of the EU’s riskiest financial entities and scope to levy big fines are a step forward.