Month: February 2023

YouTube CEO exit is an unlucky break

16 Feb 2023

Veteran Susan Wojcicki is leaving the helm of the video service at a critical time for parent Alphabet. Advertising is under duress from rivals and regulators want to unwind past acquisitions. Executives come and go, but the last thing Google needs is turmoil from within.

America’s white-collar shakeout is almost here

16 Feb 2023

The rising number of U.S. layoffs is at odds with the low number of benefit claims. One explanation: Job cuts have been focused on tech and finance workers with severance packages and healthy savings. The question is whether those cushions can outlast the labor-market slowdown.

Disney clash with activist Peltz will have sequel

16 Feb 2023

While the $200 billion media company’s new cost-cut program persuaded cage-rattler Nelson Peltz to call off his bid for a board seat, there’s much more to do. If his previous campaigns at P&G and DuPont are a guide, what looks like a harmonious ending may only be an intermission.

Cost surge leaves grocers crying in the aisles

16 Feb 2023

Producers like Unilever and Nestlé are raising prices by as much as 10% to offset more expensive inputs. That is hurting supermarkets like Kroger and Tesco, which face falling margins and consumer anger. Investors can benefit by backing the suppliers and ditching the shopkeepers.

StanChart’s takeover defences are getting stronger

16 Feb 2023

For years the emerging markets lender’s shareholders would probably have welcomed a cash bid. But CEO Bill Winters is getting closer to a 10% return on tangible equity. Prospective suitors like First Abu Dhabi Bank would have to pay an extra chunky premium to clinch a deal.

Vedanta will test limits of Adani contagion risk

16 Feb 2023

Investors are wary of possible funding shortfalls at Anil Agarwal’s convoluted commodities empire. He’s trying to reassure on refinancing plans for $8 bln of net debt as his peer’s problems infect Vedanta bonds. The mess will push weak edges of India Inc towards private lenders.

Capital Calls: Schneider’s sustainable CEO

16 Feb 2023

Concise views on global finance: Jean-Pascal Tricoire’s departure as chief executive of the French industrial software group after nearly two decades at the helm defies the trend of short-lived or underperforming corporate bosses.

The big bet against Japan’s new central bank boss

16 Feb 2023

The world’s third largest economy picked Kazuo Ueda to be governor of the Bank of Japan. In this Viewsroom podcast, Breakingviews columnists discuss the challenges facing this outsider as international investors continue to bet against the BOJ keeping rates low.

Central banks’ inflation fall guy lives Down Under

16 Feb 2023

Philip Lowe’s Reserve Bank of Australia has raised rates less than the U.S. Fed. But soaring mortgage costs, and silly gaffes, have put him on the spot. With more hikes likely and a report due on the RBA’s future, forcing him out would be an easy, if unfair, political win.

Comcast poised to spark streaming consolidation

15 Feb 2023

Hulu’s minority owner is a logical buyer for the rest after controlling partner Disney indicated it’s open to selling. The cable operator’s roots are in video distribution, and too many Netflix-wannabes abound. Boss Brian Roberts could kick off an overdue industry reckoning.

Brainard exit replots Fed’s interest-rate dots

15 Feb 2023

Vice Chair Lael Brainard is leaving the U.S. central bank for a White House job. Among the Fed governors, she was the most vocal in cautioning against rapid rate hikes. With prices still soaring and unemployment low, Brainard’s exit opens the door to higher borrowing costs.

Buyout barons reach deep into their bags of tricks

15 Feb 2023

Creativity abounds with leveraged loan markets frozen. KKR leaned into KnowBe4 instead of a full takeover. BDT went back to the Weber well. Thoma Bravo bought ForgeRock without debt. These kinds of thorny tactics should keep working just well enough until the thaw.

Barclays CEO faces a long road to higher valuation

15 Feb 2023

The UK lender pays a share-price penalty because investors dislike its volatile investment bank. Shrinking it is off the table, so boss C. S. Venkat’s best bet is to boost steadier bits like transaction banking and securities lending. Over time, that may earn a higher multiple.

Glencore’s coal fudge risks satisfying no one

15 Feb 2023

The dirty fuel is booming, and made up half of the $80 bln commodity giant’s 2022 EBITDA. Green investors may want CEO Gary Nagle to phase it out faster, while financially motivated ones would favour more mining. He’s doing neither, and paying the price with a middling valuation.

Telecom Italia breakup can please all its masters

15 Feb 2023

The sickly telco needs to cut its 25.4 bln euro debt pile. Selling its fixed-line grid to KKR offers a fix, provided the government gets a stake in the strategic asset. For major investor Vivendi, the upside would be a chance to sell Telecom Italia’s revamped service business.

Capital Calls: Ford and CATL

15 Feb 2023

Concise views on global finance: A new battery plant shows U.S. electric-car makers may struggle to cut China out of supply chains.

Australia is shuffling towards mortgage crisis

15 Feb 2023

Commonwealth Bank is trading at a heady 2.4 times book as higher rates boosted its interest income by 20%. Peers are up too. But households have yet to fully feel the pain of higher payments and home prices are plunging. Risk buffers aren’t nearly as sturdy as investors think.

BYD’s world-beating EVs brace for a rougher ride

15 Feb 2023

The Chinese electric-car star outsold Tesla last year, and net profit zoomed up more than 1,000%. Economies of scale rule in a young industry. But even the leaders will struggle to keep up the pace as overcapacity and accelerating competition slam the world’s largest auto market.

Fintech giant’s bad wedding leads to happy divorce

14 Feb 2023

Under pressure from activist investors, FIS is spinning off Worldpay less than four years after a $43 billion takeover. Cutting losses and focusing on steadier banking clients should lead to a higher valuation, while the payments processor will be free to pursue better deals.

Maybe U.S. inflation is transitory after all

14 Feb 2023

Prices rose 0.5% in January, a higher month-on-month rate than central bankers would like. Yet temporary events like a nationwide egg shortage were major contributors, and those price hikes are already reversing course. In the fight against high inflation, patience is a virtue.

How central banks got the inflation crisis wrong

14 Feb 2023

Western policymakers have hiked interest rates by more than 10 percentage points since 2021. Yet prices remain high. In this Exchange podcast, Paul Donovan, chief economist at UBS Global Wealth Management, explains how rate-setters failed and what they should do next.

Malone’s Vodafone bet may take years to pay off

14 Feb 2023

Liberty Global bought 4.9% of the telco conglomerate, joining industry rivals Abu Dhabi’s e& and Xavier Niel. Chairman John Malone knows the $31 bln company well and may hope to influence any breakup. A 2015 investment in UK broadcaster ITV shows he’s willing to sit and wait.

Capital Calls: Rothschilds in charge

14 Feb 2023

Concise views on global finance: The storied banking dynasty wants to buy out minority investors on the cheap, and they’ll probably get away with it.

Syngenta jumbo IPO will sow seeds of doubt

14 Feb 2023

A Shanghai listing this year may value the pesticides and seeds maker at a chunky $66 bln. The group’s role in feeding a growing global population will please investors. But its reliance on toxic weedkillers that are losing favour in Europe poses a long-term threat.

Economic war with China would be MAD

14 Feb 2023

The prospect of mutually assured destruction averted nuclear conflict during the Cold War. Hopefully, fear of the economic equivalent will stop a showdown with China. But after the shooting down of a Chinese balloon, tensions are rising and errors are possible, says Hugo Dixon.

China’s offshore-stock fears trade in paranoia

14 Feb 2023

As travel resumes and the yuan softens, mainland authorities may step up curbs on citizens buying foreign shares via Hong Kong. Yet such services are unlikely conduits for mass capital flight. And denying domestic investors overseas hedging options is a double-edged sword.

Bank of Japan’s new governor starts on back foot

14 Feb 2023

Academic Kazuo Ueda will replace Haruhiko Kuroda atop the central bank after the first choice demurred. He’s respected but lacks factional support and faces an unpopular prime minister pushing an expensive agenda. His appointment augurs a rocky transition at a delicate time.

Chevron’s CEO short-termism has benefits

13 Feb 2023

The $330 billion oil giant may extend head Mike Wirth’s contract beyond guardrails. He’s focused on fossil fuels, suggesting Chevron doesn’t plan to pivot. But deals are on the horizon, including maybe with a European firm. His discipline could make him the last one standing.

Microsoft can answer antitrust “Call of Duty”

13 Feb 2023

UK regulators say selling the video game would ease their concerns over the software giant’s $69 bln purchase of Activision Blizzard. A disposal would be chunky, and boss Satya Nadella won’t want to leave it behind. But even without the franchise, the acquisition still stacks up.

KKR can limit the pain of Elliott’s telco blitz

13 Feb 2023

The activist is disrupting the buyout group’s bid for German phone masts firm Vantage Towers. With a 5.6% stake, Paul Singer’s fund is expected to block the delisting until it gets a big payout. But unlike previous Elliott campaigns, KKR has various ways to insulate itself.