Year: 2021

Capital Calls: Exxon, Greensill, Research SPAC

2 Mar 2021

Concise views on global finance in the Covid-19 era: U.S. securities regulators take on the oil giant; Investors in even lower-risk funds get nervy about the supply chain finance provider; And a supplier of picks and shovels to the online trading boom gets a blank-check listing.

Danone’s governance fudge sours activist defence

2 Mar 2021

Under pressure from shareholders, the $47 bln French food and dairy group said that Emmanuel Faber will give up his CEO role, but stay on as chairman. Faber’s continued influence may deter potential successors. The board’s decision to back his strategy also makes change harder.

Nio risks running low on power on Europe road trip

2 Mar 2021

The $78 bln electric-car maker’s net loss halved in 2020 as revenue doubled and costs fell. It has plenty of cash, too. But sales growth has slowed. And founder William Li’s plan to drive into Europe will be expensive, and hard for a Chinese luxury brand, sapping recent progress.

UK engineer bets that buyers will pay dual premium

2 Mar 2021

Renishaw’s two octogenarian creators want to use their 53% stake to sell to an entity that keeps its “heritage and culture”. That might deter private equity, while the engineer’s 5 bln pound-plus valuation is beyond domestic trade buyers. That could mean a pretty short shortlist.

Coupang’s next delivery: better disclosures

2 Mar 2021

South Korea's e-commerce darling is seeking a $50 bln valuation. It boasts heady growth and hefty losses. Metrics such as fulfillment costs, reported by peers like Amazon, are missing from its prospectus, though. Scant detail on new bets also makes the IPO math hard to justify.

Swelling Sea mostly flows in sound new direction

2 Mar 2021

Worth quintuple what it was a year ago, the $127 bln tech outfit is buying an Indonesian lender and won a digital bank licence in Singapore. Expanding in finance brings new risks but sensibly deploys capital to diversify. Venturing into Mexico, though, is a nouveau-riche misstep.

Wounded U.S. bank watchdog needs urgent care

1 Mar 2021

The OCC, which oversees giant lenders like JPMorgan, has gone astray. It went solo on community lending rules, banned banks from eschewing oil firms and let them settle over sloppy compliance with little explanation. A new leader can repair the damage, but time is of the essence.

Finance pioneer Greensill hit by old-school risks

1 Mar 2021

Credit Suisse suspended $10 bln of funds linked to the SoftBank-backed group. It grew quickly by helping companies raise money from invoices but is under pressure from overexposure to hard-to-value loans for magnate Sanjeev Gupta. Funding may now be scarcer and more expensive.

Arrival of J&J vaccine is sign of glorious spring

1 Mar 2021

Last March, the world realized in panic that lockdowns were here to stay. This month should unwind that reaction. The U.S. authorization of J&J’s new vaccine and rapid production increases by Moderna and Pfizer are good news for Americans, but also for everyone else.

Walmart’s fintech gain hints at Goldman’s loss

1 Mar 2021

Omer Ismail is leaving the Wall Street bank for a job at the $368 bln retailer, just two months after becoming head of Goldman’s consumer bank. Walmart could become a force in finance. But it’s also a sign that Goldman’s retail bank is losing some shine.

Capital Calls: Sarkozy’s trial

1 Mar 2021

Concise views on global finance in the Covid-19 era: the former French prime minister’s conviction for trying to bribe a judge creates a new dilemma for the companies on whose board he sits, including hotel chain Accor.

Private equity growth fetish stores up future pain

1 Mar 2021

Last year’s $592 bln of deals were done at near-record valuations, according to Bain & Co. The consultancy reckons buyout barons are increasingly reliant on boosting sales rather than cutting costs. Since fast-growing targets are scarce, and pricey, it’s a recipe for low returns.

Danone has plenty more cash cows to milk in China

1 Mar 2021

Chief Executive Emmanuel Faber has unveiled his latest plan to placate activist investors. He wants to sell its $2 bln stake in China Mengniu Dairy. It means pulling out of a growing firm. But peddling Danone’s own brands to thirsty Chinese consumers will keep the cream flowing.

Goldman’s 1MDB pain looks light next to AmBank’s

1 Mar 2021

The Malaysian lender is paying what equates to 30% of its market value for its part in the sovereign fund scandal, more than four times the Wall Street firm’s ratio. Domestic politics is at play, but AmBank’s fine is ominous for global banks yet to draw a line under the affair.

Unizo mess could make Japan M&A less hospitable

1 Mar 2021

Less than a year since the hotelier’s $2 bln takeover battle, it is under pressure from the massive debt used to repay buyout backer Lone Star. An aggressive deal structure exacerbated pandemic risks. The danger is that Japan Inc’s more open-minded approach to deals closes again.

The house always wins with SPACs

26 Feb 2021

In poker, if you don’t know who the sucker is, it’s you. That’s also true of blank-check firms like the one that just did a deal with Lucid Motors. Sponsors, SPAC traders, merger co-investors and target-company owners all rake it in. Regular shareholders get the crumbs.

Review: The wild history of the commodities boys

26 Feb 2021

“The World for Sale” offers a virtuoso depiction of the globe’s top oil, food, and metals traders. Javier Blas and Jack Farchy tell of their startling risk appetites, spy novel antics, and geopolitical heft. Still, it’s good that their wings have been increasingly clipped.

Capital Calls: CPPIB, Barclays, McPlant, DoorDash

26 Feb 2021

Concise views on global finance in the Covid-19 era: Canada Pension Plan Investment Board's CEO is booted for jab-line jumping; the UK bank wins a legal, if not ethical, victory over financier Amanda Staveley; Beyond Meat partners with McDonald’s and Yum; and DoorDash is too hot.

Central banks will have to fight reflation tantrum

26 Feb 2021

Improving economic prospects have boosted bond yields. Fed boss Jerome Powell and his global peers will welcome the cause but not the effect. If their rhetoric can’t halt the sharp rise in borrowing costs, they will be forced to ramp up asset purchases to safeguard the recovery.

EU chip factory fantasy puts cart before horse

26 Feb 2021

Commissioner Thierry Breton wants an advanced semiconductor plant to cut reliance on Asia. The problem is that Europe’s chip designers and carmakers are ill-equipped to use such a cutting-edge site. Getting them on side, and investing more in research, is the place to start.

Evergrande contagion tests Beijing’s generosity

26 Feb 2021

China’s $10 bln retailer Suning.com threw a financial lifeline to the troubled property developer. Its founder is now selling a controlling stake as the embattled group faces $5 bln of debt due this year. A government bailout, which may be imminent, would send the wrong message.

AT&T clumsily cuts the cord on DirecTV

26 Feb 2021

The U.S. telecom titan is spinning off its pay-TV business in a $16 bln deal, six years after buying it for $67 bln. TPG will share control while kicking in just $1.8 bln for a 30% stake that includes a 10% cash coupon. It’s a pricey way to ease out of a disastrous acquisition.

Airbnb’s post-IPO showing is a pre-SPAC throwback

25 Feb 2021

The home-sharing app’s quarterly revenue fell 22%, yet still beat rivals. Because it went through its growing pains in private, Airbnb’s first results as a listed company show an already solid business. Many startups taking the blank-check route to market won’t have that luxury.

Coinbase’s listing is a cryptic way into crypto

25 Feb 2021

The exchange for bitcoin may ink a $100 bln valuation in an upcoming listing. Growth and profit are encouraging. But its model relies on transactions, and past crashes are a problem. More disclosure would be reassuring. The prospectus leaves room to assume the worst.

Viewsroom: Electric cars share some market fever

25 Feb 2021

Toyota, Ford and GM are all trading at their highest level in years as investors start to pick some winners among traditional automakers. Fear of missing the next Tesla, though, means shareholders are keeping the heady valuations for upstarts like latest SPAC target Lucid Motors.

Guest view: 2021 is tipping point to hit net zero

25 Feb 2021

Economic crises often see innovation budgets cut. With energy efficiency trends worsening governments must hold the line, urge IRENA’s Francesco La Camera and the IEA’s Fatih Birol. A big chunk of decarbonisation will come from technologies that are still at the prototype phase.

European cardboard box M&A would be tight squeeze

25 Feb 2021

Paper maker Mondi may bid for envelope rival DS Smith, according to Bloomberg. Wrapping in debt and a premium, the box specialist could be worth 9 bln pounds. The e-commerce boom justifies Mondi pivoting from declining office paper, but only if it can unpack big synergies.

“Good” rises in bond yields can turn bad

25 Feb 2021

U.S. borrowing costs are climbing. That’s less of a problem for stock markets when the cause is rosier growth prospects. Jay Powell says he isn’t about to tighten monetary policy, the usual party pooper for equity rallies. But inflation concerns would quickly sour the mood.

Klarna listing would be a mixed blessing

25 Feb 2021

The Swedish fintech’s next funding round could value it at $30 bln, and it’s mulling a direct listing. Allowing early investors to cash out carries obvious appeal. The downside is there would be a daily commentary on Klarna’s regulatory risks and shortcomings relative to rivals.

Pandemic speeds AB InBev’s necessary revamp

25 Feb 2021

More drinking at home and higher raw materials costs will pressure the $100 bln brewer’s margins in 2021. After years of zero-based budgets, it needs looser purse strings to revive sales. But with $83 bln of debt, its valuation discount to less profitable rivals will persist.