EMEA

Net zero arbitrage is large, but no one-way bet

14 Jun 2024

There’s a big gap between the rich world’s ambitions to reduce carbon emissions and the ability of governments to achieve that goal. Investors can try to exploit that disconnect. However, economic, technological and geopolitical constraints can quickly change in unexpected ways.

Carlos Slim’s BT stake may just be a prelude

13 Jun 2024

The Mexican billionaire has taken 3% of the $17 bln UK telco. Nationalism, and Slim’s failed 2012 tilt at Dutch peer KPN, imply he won’t launch a full bid. But BT investors Patrick Drahi and Deutsche Telekom may sell their shares if he gets even keener on the group’s turnaround.

Euro zone banks’ periphery premium is here to stay

13 Jun 2024

Lenders in Ireland, Italy, Greece and Spain on average trade with a 30% higher price-to-tangible-book value than French, German and Dutch ones. It reflects a reversal of fortunes between the old periphery and core – but also different business models, meaning the gap may persist.

Europe’s election eruption threatens paralysis

13 Jun 2024

Centrist and green parties saw big losses in a vote to elect the European Union’s parliament, sparking a shock snap election in France. In this Viewsroom podcast, Breakingviews columnists explain how ensuing instability could slow the continent’s response to urgent global issues.

French investors face full year of financial funk

13 Jun 2024

If Marine Le Pen’s far-right RN party wins next month’s election and sticks to its pledges, France’s 5% budget deficit will balloon. President Emmanuel Macron could call a new election, but not for 12 months. Amid paralysis or worse, the state’s fiscal position may get messier.

EU tariffs solidify China’s EV hierarchy

13 Jun 2024

Investors brushed off less-than-feared levies on Chinese electric cars, with BYD stock up 3% from two days ago and SAIC down just 2%. For the former, a vertically integrated model and lesser reliance on subsidies mean it can now pull ahead of compatriots at home and abroad.

China can divide-and-trade a less welcoming Europe

13 Jun 2024

EU tariffs on cars are a setback for Beijing. Yet President Xi Jinping will test the bloc’s ability to form a coherent policy against the world’s second largest economy. Hungary is benefiting from rising Chinese investments and trade and will become a key battleground.

Chinese EV makers will drive around EU tariffs

12 Jun 2024

The bloc is imposing levies ranging from 17% to 38% on electric cars imported from the People’s Republic. Some, like BYD, can swallow the cost, while others will find workarounds. Europe’s policymakers will have to go back to the drawing board if they want to have a real impact.

Spain’s $24 bln investment giant has too many hats

12 Jun 2024

Criteria Caixa takes dividends from its big equity portfolio and sends cash to the country’s top charitable foundation. Increasingly, though, Chair Isidro Fainé is fixated on protecting national champions like Telefónica. Pleasing Madrid means sacrificing returns for the charity.

Golden Goose IPO to test its Super-Star status

11 Jun 2024

The maker of pricey sneakers liked by Taylor Swift will list in Milan. But sales are slowing and keeping a 34% profit margin while investing in growth is hard. As a luxury boom flags, a relatively discounted IPO value of 2 bln euros including debt is appropriately conservative.

Super Mario could give weak EU a shot in the arm

10 Jun 2024

After the European Parliament elections, the EU will choose its leaders. Mario Draghi, who helped save the euro, brings unique experience. If the 27 member states wanted to rise to global challenges, they would pick him to chair their discussions as European Council president.

Macron lobs petrol on fiery French economic waters

10 Jun 2024

After suffering a beating in European elections, France’s president has called a snap parliamentary poll. Debt investors are already antsy about the country’s yawning deficit. A new electoral battle with Marine Le Pen’s far-right National Rally party will hardly help matters.

Autonomy’s legal endgame leaves few real winners

7 Jun 2024

A US court has cleared Mike Lynch of fraud connected to a $12 bln sale of the group he founded to Hewlett-Packard in 2011. It only heightens the sense that HP’s due diligence was lamentable. But the snail-pace of justice also cost Lynch over a decade of his career.

Spanish bank M&A lies in lap of interest-rate gods

7 Jun 2024

BBVA’s 12 bln euro hostile pursuit of Sabadell currently implies a slim premium to the target’s pre-bid price. If the latter’s investors think the ECB will keep rates high, returns will stay strong and they should reject BBVA. But lots of rate cuts may upend Sabadell’s defence.

European defence requires bolder investors

7 Jun 2024

Small military industry firms struggle to access financing. Lack of interest from banks and big funds has prompted two-thirds of them to refrain from seeking equity funding. The EU’s attempt to finance groups producing gear used both in war and peace can only be a first step.

Japan has ways to avoid a sovereign debt crunch

7 Jun 2024

As interest rates rise, investors are fretting about the sustainability of government debt in the developed world. Japan’s gross debt of more than 250% of GDP and heavy debt-servicing burden makes it look vulnerable to a loss of confidence. But appearances are deceptive.

ECB can start worrying about growth, not inflation

6 Jun 2024

The European Central Bank cut interest rates for the first time since September 2019, but predicted inflation will stay above its 2% target until 2026. That could tempt Frankfurt hardliners to delay further monetary easing. Doing so would endanger the bloc’s fragile recovery.

Five reasons financial disasters are hard to avoid

6 Jun 2024

A decade and a half after the last big crisis, dangers still lurk. Regulation has shifted financial risks to different areas, while old vulnerabilities remain unfixed. Meanwhile, a growing number of voters benefit from bailouts. It’s a recipe for more turbulence in future.

Oaktree can still score a skilful goal with Inter

6 Jun 2024

The US fund ended up owning the loss-making Italian club after the previous owner missed a payment. Fetching valuations similar to what Elliott secured for rival AC Milan looks tricky. Yet American interest in soccer and on-field success point to a sale price exceeding $1 bln.

UK building plans will fail to get off the ground

6 Jun 2024

Rivals in the July 4 election promise 300,000 new houses a year to ease shortages and lower prices. A lack of builders makes that unlikely. More than 346,000 construction jobs have disappeared since 2019. Without immigration or training, Britain will remain cramped and expensive.