Capital Calls: Blackstone, German chips, Guy Hands 27 Jan 2022 Concise views on global finance: The $140 bln group braces for falling asset values and rising interest rates; Berlin sends the wrong signal by ignoring a 4.4 bln euro offer for wafer maker Siltronic; Britain seeks to reverse the financier’s lucrative 1996 housing deal.
China reluctantly gives property market a break 20 Jan 2022 Beijing will let stressed real estate developers tap escrowed pre-payments, building on surprise cuts to interest rates and fresh support for M&A. It’s an imperfect, partial solution to a worsening problem, but the tough official deleveraging stance is softening by necessity.
Covid-19 victory lap leaves Beijing exhausted 14 Jan 2022 China gloated over its pandemic control and took advantage of economic stability to launch risky crackdowns on tech and property. Now mini-outbreaks are prompting fresh lockdowns as an export boom looks set to slow. In 2022, malaise could prove harder to manage than disease.
Capital Calls: UK housebuilder tumble 13 Jan 2022 Concise views on global finance: Countryside Properties shares fell as much as 26% after it failed to capitalise on a UK housing boom.
Capital Calls: SEC, UK housing, Marijuana 10 Jan 2022 Concise views on global finance: The U.S. watchdog wants more private company transparency; The UK government’s decision to hit housebuilders with a four billion pound repair bill has lessons; and cannabis producer Tilray gives a glimpse of its life after its merger with Aphria.
China’s next debt crisis will be municipal 10 Jan 2022 Local government investment vehicles owe $8 trillion, over half national GDP, and are big dollar bond issuers. Collapsing property sales and Omicron stress are squeezing them. Beijing may let some default; others might try to dump assets in a weak market. It could get ugly.
Shop spree will stuff landlords in bargain bin 6 Jan 2022 Ikea and Amazon are among the many retailers opening new locations. In theory, it’s a good sign for mall owners like Unibail-Rodamco-Westfield, which trade at steep discounts to their assets. Cheap rents and other freebies, however, mean they’re effectively giving away the store.
Selfridges’ buyer has hedge against retail risks 24 Dec 2021 Thailand’s Central Group and Austria’s Signa are paying a pricey $5 bln to acquire the department store group. With the future of retail uncertain post-pandemic, they’re taking a risk. Yet the scale of that punt is reduced by the fact this is also a prime real estate deal.
Elliott picks low-hanging fruit with builder punt 15 Dec 2021 After a bruising battle at utility SSE, the activist is targeting British housebuilder Taylor Wimpey. Its demands are modest and its criticisms a little overdone. Still, the $8 bln company’s lacklustre shares mean other investors should back Elliott’s call for an external CEO.
China’s property crisis infects top-shelf market 15 Dec 2021 Shimao Group’s shares plunged after a deal between two affiliates appeared designed to raise cash quickly. On paper, the developer is in sound health; some of its crashing bonds enjoy investment-grade ratings. If those scores aren’t credible, more volatility is on the way.
Xi’s new year’s resolutions are hard balancing act 13 Dec 2021 China's president wants to tap the brakes on tech and other crackdowns in 2022. He's also softening his energy-transition stance while pushing for more infrastructure. Yet he plans no U-turns on property or how regions raise funds. Officials will be walking a tightrope to comply.
China property debt crisis puts founders on spot 7 Dec 2021 Investors are pushing troubled developer Kaisa to avoid default and follow rival Agile’s lead by selling bonds that convert into equity. That, and other options on the table, present founder-executives with a hard choice: cede prized majority control, or risk insolvency.
China property market faces more nationalisation 6 Dec 2021 Evergrande, the country’s most indebted developer, has admitted it might formally default. With $10 bln in property bonds maturing in January alone, officials are under pressure to keep the sector from collapsing. The most expedient solution is to put more housing in state hands.
It’s a dangerous time to buy China’s property dip 3 Dec 2021 Small Chinese developer Fantasia shocked markets when it defaulted on a $206 mln bond out of the blue, despite $4 bln in cash on its balance sheet. Now creditors are pushing it toward bankruptcy. Investors eying distressed property bonds should think twice; Fantasia has company.
Capital Calls: Volkswagen, Turkey 1 Dec 2021 Concise views on global finance: The German carmaker may take mining stakes to secure electric-vehicle raw materials, echoing Henry Ford, the U.S. production-line pioneer; the Turkish central bank is resorting to old tricks to prop up the lira but it’s an unsustainable strategy.
China property bond rejig is destined to fail 30 Nov 2021 Developer Kaisa wants holders of $400 mln in notes to extend for 18 months. They’d get no real sweetener and would be pushed behind $3.6 bln of other maturing debt. Boss Kwok Ying-shing went through a $2 bln restructuring in 2015. Now he seems on course for a $12 bln repeat.
German $2 bln buyout flags bank investor myopia 23 Nov 2021 Advent and Centerbridge agreed to buy Aareal Bank, a real-estate lender that also owns an IT business. They could churn out a good return with a breakup or just by investing in the business rather than paying dividends. Payout-hungry shareholders in other banks should take note.
Temasek buffs sovereign fund standing in M&A fight 16 Nov 2021 The money manager is on both sides of a $2.9 bln tussle for Singapore Press’ real estate assets. That may seem a conflict in the city-state’s spiciest bidding battle in years. But it hammers home how Temasek’s mundane arm's-length investor role makes it the envy of global rivals.
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.
Capital Calls: Google, Twitter, Swedish grocer 10 Nov 2021 Concise views on global finance: The search giant’s defeat in appealing a $2.8 bln EU fine is tolerable if American judges don’t follow; the social media network hopes to charge hardcore U.S. users a monthly fee; ICA Gruppen’s top shareholder takes the $12 bln retailer private.