Ericsson Iraq snafu dents already-shaky M&A logic 2 Mar 2022 The telecom kit maker’s shares fell 12% after U.S. authorities said it broke a deferred prosecution agreement over possible payments to Islamic State. A large fine would make the $6.2 bln acquisition of Vonage more risky. That puts pressure on CEO Börje Ekholm to find a way out.
Russia exodus tests fund managers’ liquidity limit 2 Mar 2022 Western funds worth over $4 bln have suspended redemptions after Moscow froze equity trading, while MSCI may kick the country out of its emerging market benchmarks. The crisis once again exposes the flimsiness of asset managers’ promise that customers can sell when they want.
India’s Russian romance will be hard to stifle 2 Mar 2022 New Delhi is under pressure to join others aligning behind Ukraine. Beyond protecting its defence-equipment supplies, however, the ties to Moscow help check China’s influence. And the energy transition even makes a case for the oil-hungry nation to deepen the relationship.
Ukraine war is tectonic shift for global finance 1 Mar 2022 Investor turned anti-corruption campaigner Bill Browder joins Dasha Afanasieva on The Exchange podcast to explain why tougher sanctions from the West, including freezing oligarch assets, threaten Russian President Vladimir Putin’s grip, and cripple the country’s economy.
How Europe can kick its Russian gas habit 1 Mar 2022 Conflict in Ukraine shows the folly of the continent depending on gas from Moscow. Speeding up renewable energy would help. To get to zero in a decade, however, Europe will also need other sources of gas, more nuclear power, multi-nation coordination and even consumer rationing.
Oil lubricates Beijing’s Russian tightrope 1 Mar 2022 China relies on crude from the now pariah state for nearly a fifth of total imports. Though the pair can sidestep Western sanctions on Moscow and settle most transactions in yuan, being too helpful could backfire on Beijing. Its banks will be caught in the crossfire either way.
Ukraine puts power of U.S. tech firms on new level 28 Feb 2022 Facebook is fighting Russian hackers while SpaceX is providing internet access. Such communications services are critical in a war. It’s easy for the CEOs concerned to take one side with little risk to revenue from the other. Next time, the incentives could be more complicated.
Russian economic collapse will be hard to avoid 28 Feb 2022 The central bank more than doubled its main policy rate to 20% to support the plunging rouble. It won’t be enough. But further hikes or capital controls would compound pain in an economy where Western sanctions are spurring a run on banks. Moscow has few viable policy options.
Capital Calls: Buffett, Sanctions, Defence, Canada 28 Feb 2022 Concise views on global finance: The Oracle of Omaha has seen value in his company’s own stock; Switzerland breaks with traditional neutrality over Ukraine; military-equipment stocks are surging; and Ottawa may let the Rogers-Shaw telecom merger follow a discouraging U.S. path.
Investors in Russia face mark-to-no-market problem 28 Feb 2022 The rouble tanked and Moscow’s bourse froze after the West intensified sanctions against President Vladimir Putin. Money managers and foreign companies face the prospect of writing off Russian assets. Uncertainty about who bears those costs will ricochet around global markets.
Germany is turning fiscal exceptions into the rule 28 Feb 2022 Chancellor Olaf Scholz will hike defence spending to 2% of GDP and invest 100 bln euros in the military. A historic foreign-policy shift is just the latest instance of Berlin finding ways around its budget rules. Scrapping them would be simpler given a looming energy transition.
BP’s bruising Russian exit almost worth the pain 28 Feb 2022 The UK oil giant is getting out of its 20% stake in $39 bln Rosneft. Russia’s pariah status maximises the hit to its income statement. But the crisis has forced BP to take a step that could eventually allow investors to take a more generous view of its green transition.
Use dollar’s clout, even if that means losing it 27 Feb 2022 Efforts by America and its allies to isolate Russia from the international financial system may hasten other countries’ efforts to bypass the greenback and eventually erode its global dominance. But there’s little point in having power that can’t be wielded in dire circumstances.
Sanctions shock-and-awe reverberates beyond Russia 27 Feb 2022 Western allies will limit Moscow’s ability to use its currency reserves and kick some of the country’s banks out of the SWIFT payment system. While details are vague for now, it looks like a targeted attempt to undermine Russia’s financial system. Other countries, notably China, will take notice.
Western banks face Russian triple whammy 25 Feb 2022 EU and U.S. bank stocks tumbled after Vladimir Putin invaded Ukraine. The conflict may blunt the benefits of higher interest rates and inflict losses on cross-border loans. In a worst-case scenario, Raiffeisen, UniCredit and SocGen could have to write off their Russian units.
Russia’s wheat clout can hit world where it hurts 25 Feb 2022 The grain’s price hit a record high after the invasion of Ukraine, source of 8% of world exports. A long conflict in a country called the “breadbasket of Europe” would mean global shortfalls. President Vladimir Putin would cause even more disruptions if he curbed Russian exports.
Viewsroom: Russia and Ukraine, Credit Suisse woes 24 Feb 2022 As President Vladimir Putin launches the biggest attack on a European state since World War Two and the West prepares its response, Dasha Afanasieva and Gina Chon discuss what comes next. And Liam Proud explains how an embarrassing data leak is the Swiss bank’s latest headache.
Ukraine war gives impetus to climate backsliders 24 Feb 2022 Politicians are supposed to be fast-tracking decarbonisation. Russia’s invasion may speed the long-term shift to renewable energy. But it could also empower fossil fuel fans to ease energy security fears via new supply. Investors, lured by high crude prices, may go along with it.
Bond market sends flawed signals on U.S. economy 24 Feb 2022 A dash to safe havens means Treasuries are in big demand. But the yield curve is sending the same messages it was before Russia invaded Ukraine: that Fed rate hikes may trigger recession and that policy rates won’t rise much above 2%. Both presumptions could be wrong.
West has some cover to ramp up Russian sanctions 24 Feb 2022 Sberbank and VTB halved after troops invaded Ukraine, suggesting Moscow’s banks and oligarchs may end up pariahs, like the Nord Stream 2 pipeline. A Russian tit-for-tat might hit European gas supplies. The one comfort is that end of winter makes it less of an immediate problem.