UK sends mixed message with London IPO veto 26 May 2021 Chancellor Rishi Sunak is seeking powers to block stock market offerings that threaten national security. Even if used rarely, the move is at odds with his drive to lure firms to list in London after Brexit. It’s another sign of the government’s ideological inconsistency.
Huawei gets pushed toward collision with Alibaba 26 May 2021 Founder Ren Zhengfei wants his embattled hardware company to shift focus to cloud computing and software. That will pit him against the $570 bln e-commerce giant, which is also moving into IT services. Huawei's scale and resources make it a formidable threat.
U.S. tech will slip the new global tax net 25 May 2021 The G7 may soon agree a 15% minimum corporate levy. That’s too low to stop profit being shifted to havens, which may dream up new sweeteners. And until Amazon and others pay taxes where they make sales, countries like France, Britain, and India will lose out as tech profit grows.
German landlord tie-up risks political subsidence 25 May 2021 Property giant Vonovia is offering 18 bln euros for rival Deutsche Wohnen. CEO Rolf Buch gets 160,000 apartments at book value, but the financial rewards look modest. His company may now also become a bigger target for Berlin politicians opposed to rent hikes.
Belarus plays airspace poker with a weak hand 25 May 2021 Irate western powers have banned flights over the Russian ally’s territory after it forced a Ryanair jet to land. Engaging in “air piracy” is easier for countries that can afford to lose overflight fees or are too big to fly around. Neither is obviously the case for Belarus.
The Exchange: South Africa’s prospects 25 May 2021 Johannesburg Stock Exchange CEO Leila Fourie tells Swaha Pattanaik how South Africa’s economy has coped with Covid-19. In an interview recorded for the International Economic Forum of the Americas, she also flags sectors that will rebound fastest and discusses ESG investing.
China’s commodities boom poses policy conundrum 25 May 2021 The government is trying to forcibly cap a fierce rally of key industrial ingredients like steel and coal. President Xi Jinping’s push to reduce overcapacity and cut emissions has companies slashing output, while property and exports keep driving demand. Something has to give.
Capital Calls: Bitcoin, Procore 20 May 2021 Concise views on global finance: Getting paid in cryptocurrencies loses allure in U.S. President Joe Biden's tax plan; the $11 bln building software firm is a bargain compared to peers.
Northern Ireland row threatens its Brexit dividend 21 May 2021 British leaders have cast doubt on border arrangements they agreed following the country’s split from the European Union. It’s a blow for the province’s plan to lure foreign firms by offering access to both Europe and Britain. Its post-Brexit boom may be over before it started.
Capital Calls: Apollo, Microsoft 20 May 2021 Concise views on global finance: The second of the asset manager’s three founders moves on; the software firm is pulling the plug on Internet Explorer.
EU chip M&A is politically sound, financially iffy 20 May 2021 Shares in $5 bln Nordic Semiconductor surged 10% on a report that Franco-Italian rival STMicroelectronics may bid for it. A deal would be a logical bet on the trend of having chips in everyday gizmos, and satisfy politicians’ urge to keep key tech in Europe. But returns look low.
UK-Aussie trade talks expose post-Brexit tangles 20 May 2021 Prime Minister Boris Johnson wants to lower tariffs for goods from Down Under. A deal would bring only a little more growth, cost UK farm jobs, and set a benchmark for negotiations with others. It’s getting harder for Johnson to ignore the tradeoffs after leaving the EU.
Hong Kong bank deal offers helpful exit ramp 20 May 2021 Chong Hing’s majority owner is offering to buy the rest at a $2.6 bln valuation, or 0.9 times book. That’s less than half the multiple the Guangzhou-backed fund paid in 2013. Greater Bay Area prospects may be promising but the 51% premium can fund better ways to invest in them.
Rusal’s upside from clean break only goes so far 19 May 2021 The $6 bln aluminium maker’s plan to demerge carbon-heavy assets could unlock value if ESG-focused investors value the other parts more highly. But the greener entity will still have 28% of polluter Norilsk Nickel and the risk of U.S. sanctions snapback. That might cap any gains.
KKR makes pricey punt on infrastructure frenzy 19 May 2021 The U.S. group is buying UK-based rail and roads investor John Laing for 2 bln pounds. A 35% premium to net asset value looks steep. But KKR can triple its target’s war chest to exploit a post-Covid spending boom, and holding on to the asset allows for more modest returns.
Capital Calls: JPMorgan, FirstGroup, Break fees 18 May 2021 Concise insights on global finance: Jamie Dimon is shuffling his deputies; the UK bus-to-rail group’s sale of its U.S. businesses to EQT has hit an investor revolt; deals involving AT&T and Canadian National Railway highlight the fees due for walking away.
Israel’s military effort has an economic shield 17 May 2021 Hostilities are entering a second week. Despite the struggle to form a new government, a strong vaccine record and a solid current account surplus mean the economy is in relatively decent shape. The conflict would have to drag on for a few months and escalate for that to change.
Alibaba tightropes to please investors, Beijing 13 May 2021 A $2.8 bln antitrust fine resulted in a quarterly net loss, but the Chinese e-commerce giant expects annual sales to jump 30% to $144 bln. That should soothe jittery shareholders. Regulators, though, are increasingly at odds with Alibaba’s competitive edge – its vast data trove.
Viewsroom: China’s baby bust, European SPAC boom 13 May 2021 China’s census data showed the population grew just 0.53% every year in the decade to 2020, with fertility rates dropping to Japanese levels. That’s bad news for growth. And European rainmakers like Claudio Costamagna and Ian Osborne offer market-friendlier blank-check deals.
U.S. courts give Chinese firms a fighting chance 13 May 2021 Casualties in the Washington-Beijing crossfire have a potential ally: American judges. One just gave Luokung Technology a temporary reprieve from a U.S. investment ban due to inadequate evidence. Xiaomi won a similar exemption. The rule of law should give investors some comfort.