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Capital Calls: AI goes back to school

17 Apr 2023

Concise views on global finance: Chegg’s sagging shares perked up on news that the education software developer is working with ChatGPT maker OpenAI to create a safer automated tutor. For companies at risk of obsolescence, working with chatbots is a better bet than beating them.

Central bank pilots risk leaving cockpit too soon

14 Apr 2023

Western policymakers at the IMF Spring Meetings hinted that their mission to slay inflation without a recession is nearly accomplished. Investors agree, and hope for rate cuts. That’s overdone. A soft landing is in sight, but so too is the danger of complacency.

A flawed but useful economic model for a bleak age

14 Apr 2023

Ideas become fashionable when they meet the needs of the era. John Cochrane’s fiscal theory, which states that governments ultimately determine the level of inflation, fits the bill. Despite its shortcomings, the model may be helpful, says Edward Chancellor.

Capital Calls: UnitedHealth, ETFs, Animal drugs

14 Apr 2023

Concise views global finance: Health insurer UnitedHealth continues to flex its muscles; Canada traps investors inside exchange-traded funds; private equity firm EQT buys into medicine for pets.

Commercial property pain is only just beginning

13 Apr 2023

Valuations of offices and shopping malls are under threat as rising interest rates ratchet up the cost of buying real estate. In this Viewsroom podcast, Breakingviews columnists discuss how inflation and remote working could make the crisis far worse than 2008.

Capital Calls: Buyouts are getting complicated

13 Apr 2023

Concise views on global finance: Both hand sanitizer maker Diversey and software developer Qualtrics recently sold to private equity firms, but new regulatory filings show dealmakers weighing increasing risks.

SoftBank-Alibaba sale looks awkward for Prosus

13 Apr 2023

The Japanese investor may offload most of its stake in the Chinese giant. But Prosus is only slowly shrinking its 27% holding in Tencent. The Amsterdam-listed firm has a chunky valuation discount. While the two situations are very different, the final outcome should be the same.

Swedish real estate is canary in the coal mine

13 Apr 2023

The Nordic nation is at the sharp end of Europe’s real estate slowdown. Residential prices fell 15% last year, with offices and shops set to follow as debt costs surge. Its property firms with borrowings equivalent to 40% of GDP have little cushion if foreign bondholders panic.

UBS can score a quick win with Swiss sale

12 Apr 2023

Chair Colm Kelleher’s acquisition of Credit Suisse is infuriating politicians. They fear the new bank will be too big in Switzerland and lead to job cuts. Selling or listing the domestic business would buy political goodwill and give UBS a tidy return on its $4 bln investment.

Sinking Russian military crafts new arms winners

12 Apr 2023

Moscow’s share of global arms exports shrank by 27% over the last five years, to the benefit of the US and France. Deprived of Western technology, Russia’s defence industry has struggled to adapt. Its traditional customers also aren’t impressed by its poor performance in Ukraine.

Capital Calls: Inflation gets sticky

12 Apr 2023

Concise views on global finance: US inflation is increasingly coming from non-essential goods’ prices that rarely drop. That’s a bad sign for Americans since it signals a longer battle against price hikes and even higher interest rates.

Glencore Teck tweak is necessary, not sufficient

11 Apr 2023

The Swiss group’s $23 bln offer for the Canadian miner now includes up to $8 bln of cash. That means its target’s shareholders can avoid taking payment in dirty coal shares. But Glencore may still have to raise the value of the overall bid to bring Teck investors on side.

Capital Calls: IMF’s grim outlook, Electric cars

11 Apr 2023

Concise views on global finance: The International Monetary Fund’s medium-term forecast for the global economy is the bleakest since 1990; lower proposed mileage ratings for electric vehicles could force automakers to sell more of them to meet regulatory standards.

Guest view: “1% for 1.5C” can power green finance

11 Apr 2023

Poorer nations pay the highest human and financial cost of climate change. Multilateral development banks should offer to lend to them at 1% to help mitigate and adapt to global warming, argues UN Climate Change High-Level Champion for COP27 Mahmoud Mohieldin.

Satellite M&A may just create more space debris

11 Apr 2023

Luxembourg-based SES is in talks about a possible $10 bln combination with US rival Intelsat. Both companies need scale and cost savings to compete with a new breed of giants like Elon Musk’s SpaceX. But they also risk doubling down on slower-growing parts of the market.

Capital Calls: SPACs, Tupperware, China

10 Apr 2023

Concise views on global finance: Electric-van maker Arrival goes for a second blank-check deal at a discount to the first; the reusable container maker boxes itself into a corner; decoupling rhetoric gets drowned out by investments from Apple supplier Japan Display and others.

Capital Calls: Saudi’s $5 bln gaming play

6 Apr 2023

Concise views on global finance: PIF-owned Savvy Games is acquiring US-based mobile gaming specialist Scopely for $4.9 bln, but it doesn’t obviously aid the kingdom’s wider gaming strategy.

Glencore’s Teck gambit could slip on an oily patch

6 Apr 2023

The Swiss commodity giant’s $22 bln plan to buy its Canadian peer and spin off its coal arm offers an alternative to investors voting on Teck’s own breakup plan. Yet Glencore’s oil trading unit may hurt the value of the non-coal bit. Teck’s pitch has flaws too, but looks cleaner.

KKR’s FGS deal sets new bar for comms valuations

6 Apr 2023

The private equity group may buy 30% of the WPP-owned financial communications firm. The high price allows employees to cash out over $200 mln, meaning a few may leave. The best hope for KKR is that FGS’s revenue is increasingly stable and growing, justifying the higher multiple.

Capital Calls: Reserve Bank of India

6 Apr 2023

Concise views on global finance: The central bank surprised by keeping its key borrowing cost at 6.5%, citing concern about global financial stability.