EMEA

Diageo’s Latin American pain risks spreading

10 Nov 2023

Shares in the spirit company fell 16% on a profit warning. Cash-strapped customers are buying cheaper tequila and whisky and switching to beer. But with interest rates at their current high levels, depressed demand could soon hit Diageo’s larger markets and rivals as well.

IPO laggards’ race to the bottom misses the target

10 Nov 2023

Italy is siding with the UK in changing listing rules to stop firms moving to foreign venues. Greater voting power for founders may appeal to tech or family-owned companies. Yet Rome’s high debt and slow growth mean that, like in Brexit-battered Britain, the exodus may continue.

Capital Calls: SoftBank

10 Nov 2023

Concise views on global finance: The Japanese conglomerate’s finance chief reckons its Vision Funds have ‘hit a bottom’. The firm’s broader surprise $6.2 bln quarterly loss, though, prompted shareholders to wipe 9% off the stock.

Farfetch turns from Richemont blessing to curse

9 Nov 2023

The $65 bln Cartier-owner hoped to fix a problem by flogging part of digital arm YNAP to the US-listed marketplace in a stock deal that involves extending $450 mln in credit. But Farfetch’s stock has dived and its finances are stretched. Its woes risk infecting the bling giant.

Wind woe opens door for alternative green ideas

9 Nov 2023

Shares of Orsted and Siemens Energy are being battered by their inability to boost profits. In this Viewsroom podcast, Breakingviews columnists explain how trouble in offshore wind may encourage investors to back other clean energy segments like battery storage, cables and solar.

Adyen shows being an open book pays off

9 Nov 2023

Shares in the Dutch payment firm jumped 35% despite less ambitious revenue growth and profit margin targets. That seems inconsistent. But investors cheered Adyen’s promise of more frequent updates and its clearer business roadmap. It proves the benefits of being transparent.

Capital Calls: Arm, Insurers’ climate score

9 Nov 2023

Concise views on global finance: The $56 bln chip group said it can’t be sure when certain customer deals will translate into revenue, undermining its quest for a steadier top line; insurers are still too addicted to dirty energy, a new study shows.

Profitable Klarna poses IPO valuation conundrum

9 Nov 2023

The pay-later group is making money. Ahead of a possible float, that makes it easier for CEO Sebastian Siemiatkowski to claim he has a viable business. Yet to get an uplift on his last $7 bln price tag, he’ll have to persuade investors to value Klarna like a fintech, not a bank.

Capital Calls: Bayer breakup

8 Nov 2023

Concise views on global finance: The 40 bln euro German seeds-to-drugs maker is considering splitting off its consumer or crop science divisions, but may still be left with a more unwieldy structure than its pharma peers.

Payments mess sends warning on UK IPO revival plan

8 Nov 2023

CAB Payments’ stock fell 80% since its July listing, amid concerns over its business model. It suggests stock markets are already struggling to push back on risky issuers. A new light-touch listing regime may make such accidents more common, and London less appealing for floats.

Portugal’s crisis threatens growth resurgence

8 Nov 2023

Prime Minister António Costa’s resignation casts a shadow on some of Lisbon’s crucial new energy projects. The relatively vibrant economy was already heading for a slowdown. A swift end to the political upheaval would reassure foreign investors and Lisbon’s EU partners.

Telefónica $2 bln German swoop is cheap but risky

7 Nov 2023

The Spanish telco is offering to buy out its Teutonic arm’s minority investors. On the surface, it’s a good time to pounce given the unit’s recent slump. But the immediate financial benefits are sketchy, and the debt-laden parent may have to wait years for a German turnaround.

Capital Calls: Regulating crypto

7 Nov 2023

Concise views on global finance: The US Securities and Exchange Commission is struggling to hire digital token experts, partly because prospective recruits aren’t willing to acquiesce to the agency’s requirement that they sell their holdings in bitcoin and beyond.

Drug shortages demand quick and costly action

7 Nov 2023

Chemotherapy and penicillin ran short over the past year amid supply-chain disruptions and regulatory pressure. In this Exchange podcast, Dr. Steffen Denzinger, president of the European Fine Chemicals Group, argues that safeguarding medicines may require patients to pay more.

UBS faces a long wait for M&A share-price boost

7 Nov 2023

Boss Sergio Ermotti is cutting costs and shedding unwanted Credit Suisse assets. He’s even won $22 bln of new money from wealthy clients. The question is when investors will reward him with a richer valuation. Lingering legal and integration risks suggest it might take time.

Capital Calls: Starbucks’ wages

6 Nov 2023

Concise views on global finance: Only US baristas with five years of experience will get above-average raises in 2024. Despite more than 9,000 organized workers, Starbucks is dodging the labor pressures faced by shipping firms and automakers this year.

Ryanair’s valuation can climb to a higher altitude

6 Nov 2023

Soaring demand means the 18 bln euro airline’s earnings are above even pre-pandemic levels. Investors’ recession fears have prevented Ryanair’s share price from reflecting the good cheer. Still, history suggests budget vacations are among the last things that consumers cut.

Canary Wharf may yet avoid once-a-decade upheaval

6 Nov 2023

The main landlord of London’s key office district has tended to have a new owner every 10 years. The 300 mln pounds of equity injected by incumbents Brookfield and Qatar suggests they may buck the trend. That gives Canary Wharf scope to address its issues in a stable manner.

Telecom Italia rival plan has too many pitfalls

3 Nov 2023

An ex-executive and a fund say the telco could raise 16 bln euros by offloading a Brazilian unit and other assets to slash its debt pile. That would spare it from selling its prized network to KKR. Yet bagging such valuations while executing a multi-step project looks tricky.

Rich countries are stumbling into a debt trap

3 Nov 2023

Large deficits and higher interest rates are pushing up the cost of servicing hefty piles of sovereign borrowing. Elusive growth, stubborn spending and hawkish central banks make it hard for governments to regain control. Little wonder bond investors are heading for the exit.