Bonds

Mind-blowing earnings are already so last season

21 Jul 2021

Big companies are set to report stellar second-quarter results. But the best will soon be in the rear-view mirror and many worries, notably about Covid-19 variants, lie ahead. Head-scratching drops in U.S. bond yields will only make stock markets even more prone to stumbles.

Lagarde’s green turn may not need to be that sharp

16 Jul 2021

The ECB boss’s 293 bln euro corporate bond programme may soon tilt toward environmental saints and away from sinners. Too heavy a hand could distort markets and inflate green bubbles. But it’s a big enough change for it not to matter if, as seems likely, the intervention is mild.

Capital Calls: Intel, SPAC lobby

16 Jul 2021

Concise views on global finance: Buying GlobalFoundries would boost Intel’s ambitions to make chips for other firms, but spinning it off afterward might please investors more; a new D.C. group sets up shop to defend the blank-check craze.

Capital Calls: Gates split, Chinese IPOs, Telenor

8 Jul 2021

Concise views on global finance: Bill and Melinda Gates agree a post-divorce plan for their joint charitable organisation; medical data firm LinkDoc is among the first to pull its U.S. listing; the Norwegian telco gets just $105 mln for unit hobbled by Myanmar junta.

EU bond ban is smarter way to police errant banks

16 Jun 2021

The bloc froze 10 lenders out of its first recovery bond sale because of past market-rigging, the FT reported. The direct hit for JPMorgan and others is small. But they can only rejoin the fold by proving they’ve changed. That’s a keener incentive to stay clean than fines.

EU bonds will take shine off Germany’s over time

15 Jun 2021

Investors flocked to buy the maiden issue of the bloc’s 800 bln euro joint funding programme. But the yield is higher than Berlin’s, implying it’s not yet Europe’s safest asset. Closing the gap requires more liquidity and a sustained political commitment. Both seem likely.

How to turn a software firm into a bitcoin wallet

9 Jun 2021

MicroStrategy’s holdings of the digital currency already make up over half of its $6 bln enterprise value. Now the business-analytics software group has sold $500 mln in junk bonds specifically to buy more. With crypto accounting wacky, it could make for a crazy ride.

Drahi paints debt masterpiece with Sotheby’s bond

13 May 2021

The auction house owned by Patrick Drahi is raising $300 mln to fund a dividend. The tycoon may soon have recouped one-third of the cost of a 2019 acquisition by debt-funded payouts. The boom in such deals even for leveraged, cyclical businesses shows how desperate lenders are.

UK takes slow road to Scotland breakaway risk

10 May 2021

Pro-secession parties increased their majority in Scottish elections, while Boris Johnson’s Conservatives cemented their position in England. Yet even if a new referendum takes place, the outcome is far from certain. The breakup threat will take time to show up in asset prices.

Fed’s Jay Powell picks the road less travelled

27 Apr 2021

The American and Canadian economies are both rebounding. Yet the U.S. central bank boss isn’t about to copy Canada’s bond purchase taper. It’s the difference between traditional and new-school monetary policy, which waits to see sustained inflation rather than anticipating it.

Viewsroom: The Super League’s short, unhappy life

22 Apr 2021

The richest European soccer clubs, including Juventus and Real Madrid, swiftly aborted plans to create a breakaway competition. But as Liam Proud and Peter Thal Larsen explain, the financial appeal of a U.S.-style sporting cartel remains irresistible. Plus, Huarong’s woes.

Huarong foreign bondholders get sweet nothings

21 Apr 2021

The market is stabilising around the troubled bad debt manager holding $21 bln in dollar bonds. Its key offshore unit says it has returned to profit; Beijing notes Huarong has adequate liquidity. It’s better than silence but thin gruel for a relief rally.

Capital Calls: Netflix, GameStop

9 Apr 2021

Concise views on global finance in the Covid-19 era: The video-streaming service sprays webs of money to secure movies; GameStop’s “Chewy of Gaming” strategy.

Russia has defences against U.S. sabre-rattling

25 Mar 2021

Given the U.S. president reckons his Russian counterpart is a “killer”, new sanctions on Russian government debt are possible. Jumpy prices forced Moscow to cancel a bond auction. But with a trade surplus and low external debt, Kremlin finances will hold up.

Corporate debt party will survive rate storm

17 Mar 2021

Rising government bond yields are dragging up companies’ borrowing costs. Yet the premium that investors demand to buy debt issued by firms is still relatively low. Central banks’ asset buying and the prospect of lockdowns lifting mean credit markets will avoid too big a tantrum.

South Africa enters greener bond-market crosshairs

11 Mar 2021

With 90% of its power coming from coal, the Rainbow Nation is one of the worst CO2 emitters. Mining’s political heft also means foot-dragging on climate policy. With big external funding needs, the kick from bond investors when they flick the green switch will hurt hardest.

Chancellor: A bear market in bonds is beckoning

2 Mar 2021

Bond bull runs tend to last for decades, making it nearly impossible to accurately predict a turning point. But recent fixed-income extremes, together with the complacent attitude of central bankers and investors, suggest history’s greatest bond boom has passed its sell-by date.

Sustainable debt may be too popular for own good

2 Mar 2021

Investors are piling into bonds sold by companies such as H&M or Tesco which punish issuers for missing environmental targets. Demand has been such that the funding is now dirt-cheap. That could distort the price of the securities, and their intended effect.

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.

“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.