M&A’s big innovation in 2014: the "Chinese flip" 13 Jan 2014 Companies like Shuanghui and Bright Food funded overseas acquisitions with aggressive leverage. The next step is to refinance by listing subsidiaries on the stock market. Enthusiastic demand for Chinese consumer stocks makes flipping recent purchases all the more attractive.
Britain will be first rich country to raise rates 9 Jan 2014 The UK has a large trade deficit, falling unemployment and a frothy housing market. As the economy picks up, inflation could return. Bank of England Governor Mark Carney wants to keep rates low for a long time. Facts will force him to change his mind.
Bondholders may be forced to fix liquidity crisis 6 Jan 2014 Investor appetite for owning, buying and selling debt is growing while Wall Street’s shrinks. Tapering and rate hikes will make corporate credit volatile and vulnerable. Investors need to support nascent e-trading platforms – or accept routinely being stuck with unwanted bonds.
Asia is ripe for a brewers M&A brawl 6 Jan 2014 It’s a seller’s market in the last frontier for beer. The coming year may see new owners for Philippine brewer San Miguel, and South Korea’s Oriental Brewery. Carlsberg and Beijing Yanjing could make great partners too, if China’s rulers let market forces flow more freely.
Commodities set to distinguish themselves 3 Jan 2014 From gold to grain, raw materials will in 2014 trade less in line not just with equities, but each other. That’ll continue a trend started in the summer. Thank a calm euro zone and the prospect of a Fed taper. Commodity costs set by fundamentals, not fear, would be good for many.
U.S. utilities face German-style solar burn 3 Jan 2014 Solar power accounts for just 1 pct of U.S. electricity production, against 10 pct in Germany. But generators stateside are already feeling the heat and pushing for levies on solar panels. They’re keen to avoid the scorched profit seen at traditional Teutonic utilities like E.ON.
This summer’s blockbuster film could be Chinese 3 Jan 2014 Stonking box office returns at home mean China’s cinema operators are branching into film studios. Add in acquisitions of overseas theatre chains, and a Chinese-produced blockbuster on U.S. screens is coming soon – if China’s government can lay off the propaganda.
Time for Siemens’ turnaround CEO to deliver 3 Jan 2014 Joe Kaeser is now piloting Europe’s biggest engineer. He has easy profit targets ahead, and some obvious levers to pull: disbanding a sprawling unit, ditching trains and avoiding big M&A. But a stock rally means these moves are largely priced in. So any setbacks could hurt.
The chilling echoes of 1914, a century on 3 Jan 2014 A rerun of descent into global war is really rather unlikely. But some of the danger of 100 years ago is present today. Late 19th century increases in tariffs helped to create competing blocs. A similar multi-polar economic world is now emerging.
Selfish behavior will propel sharing economy 2 Jan 2014 New matchmaking business models are thriving in large part by forging into gray areas of tax and regulation. The likes of Uber, Airbnb and Lending Club face growing scrutiny from authorities. Just as Amazon did, though, self-interest should inspire some canny maneuvers.
Past predictions should ensure one future result 2 Jan 2014 Alas, not all Breakingviews prognostications for 2013 panned out. Some were spot-on, others missed the mark. But the guiding philosophy for this annual attempt at agenda-setting financial foresight is to spark lively discussions. In that sense, the 2014 edition can deliver again.
Small tech best placed to take on Big Brother 2 Jan 2014 The lesson from 2013: there are grievous flaws in security systems once thought virtually impenetrable. Companies and their data need better protection. With many big players compromised, small tech groups may step up and make a lucrative stand against surveillance.
Who packs the biggest power to surprise in 2014? 31 Dec 2013 Difficult jobs abound in the global economy, but so do low expectations. Getting it right could mint the legacies of downtrodden politicos like Dilma Rousseff and John Boehner. Equally, a few CEOs may defy the odds, such as the bosses at Deutsche or Microsoft. Herewith our list.
Markets face a year as tough as 1994 31 Dec 2013 The year ahead is likely to be a difficult one for global investors. Though the yields have risen, safe-haven bonds are overpriced. So are equities, which ran up this year in anticipation that 2014 would bring better economic data. Emerging markets are also likely to struggle.
Scotland will reject independence 31 Dec 2013 The north British state will decide in September whether to secede from the United Kingdom. A thriving, home-ruled Scotland sounds great, but the economics look ropey. Moreover, secessionists have already surrendered monetary tools that could have made independence compelling.
Time for Larry and Sergey to invest in journalism? 30 Dec 2013 Amazon billionaire Jeff Bezos is buying the Washington Post and eBay founder Pierre Omidyar is funding a new reporting venture. But take a look at the numbers, and few have made their money at the expense of the fourth estate quite as obviously as the Google guys.
Dollar to give other currencies beating many want 30 Dec 2013 Currency market volatility will be pronounced in 2014. As the U.S. Fed cuts its asset purchases, the dollar looks set to climb from its current debased depths. The yen and the euro are keen to be beaten, emerging markets aren’t. The pound’s rise will rival the dollar’s.
Beijing will block a big overseas deal in 2014 30 Dec 2013 China’s antitrust regulator is increasingly scrutinising tie-ups even when both companies are foreign. The body’s remit to promote competition and protect domestic industry gives it broad clout. The desire to show its economic might could see China deny a big merger outright.
Oil’s new age of plenty challenges old assumptions 27 Dec 2013 Cheap shale, cheaper renewables, and increasing efficiency are creating a glut of non-OPEC crude, and bringing forward the peak of fossil fuel demand. Even if energy prices don’t fall sharply, there will be more volatility in oil prices, energy investments and geopolitics.
Brinksmanship to worsen with U.S. midterm election 27 Dec 2013 Congressional contests will make extremism more appealing to lawmakers than compromise. That means more gridlock, in which President Obama’s healthcare reform gets more attention than economic policy. Worse, the GOP minority’s only real leverage is the threat of default.