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.
Tesla will give up pole position in China 12 May 2021 A series of blunders has made Elon Musk’s marque a target for state media. Its huge share of the electric-vehicle market and lack of local partner also leave it exposed as Beijing backs domestic carmakers. The $600 bln brand can still prosper, but not as leader of the pack.
Guest view: Colombia’s struggle against poverty 11 May 2021 President Duque’s shift of tax burdens to the poor and middle class backfired. Despite their withdrawal and the finance minister’s exit, protests will continue until the country starts reversing Latin America’s worst income inequality, Smith College’s Veronica Kessler writes.
Capital Calls: Uber, Roblox 11 May 2021 Concise views on global finance: Free rides for Covid jabs won’t help the ride-hailing app’s labor battle with Washington; the online games platform’s year-on-year growth decelerated sharply in April.
Meituan learns limits of poetic licence 11 May 2021 The Chinese food-delivery giant lost 7%, or $16 bln, of its market value after an ancient verse posted by boss Wang Xing was construed as criticism of Beijing. Even if this is just a literary misunderstanding, regulators will be forcing the business model to be less creative.
UK takes slow road to Scotland breakaway risk 10 May 2021 Pro-secession parties increased their majority in Scottish elections, while Boris Johnson’s Conservatives cemented their position in England. Yet even if a new referendum takes place, the outcome is far from certain. The breakup threat will take time to show up in asset prices.
Biden’s vaccine shift has risky side effects 6 May 2021 The U.S. president backed waiving intellectual property rights for Covid-19 jabs to help crisis-torn countries. Yet a shortage of ingredients and manufacturing challenges mean the move may not boost supply much. And it may hurt investment in remedies during the next pandemic.
Capital Calls: KKR 6 May 2021 Concise views on global finance: The private equity firm is investing in Charter Next Generation in an employee-friendly deal.
Corporate tax reform may help Ireland in the end 4 May 2021 The Emerald Isle’s allure as a low-levy destination will fade if a global minimum tax rate is agreed. Dublin wants to maintain its appeal by spending over 4% of GDP to fix problems like poor public transport. Such investment will lay the foundations for a more balanced economy.
Capital Calls: Pfizer, ConocoPhillips 4 May 2021 Concise views on global finance: About $6 bln of additional earnings from Covid vaccines at the U.S. drug giant should mean more capital returned to investors; the independent oil group is offloading stock in Canada-based Cenovus it collected as part of a deal four years ago.