Currency

FX risks dilute appeal of Heineken’s Africa tipple

15 Nov 2021

The Dutch brewer is buying South Africa’s Distell for $3 bln and taking over Namibia Breweries. With modest cost savings, CEO Dolf van den Brink can make a spirited return. But he’ll have to flog more Amarula liquor beyond the continent to ease the headache of wobbly currencies.

Wise’s profit-purpose balancing act may get harder

19 Oct 2021

The $13 bln fintech that wants to disrupt currency transfers is cutting foreign-exchange fees to win more users. Yet meeting investors’ revenue expectations while slashing prices looks tricky. CEO Kristo Käärmann may eventually have to irk either shareholders or customers.

Yen slide signals bad news for Japan Inc this time

15 Oct 2021

The currency has fallen to its weakest against the dollar in nearly three years. Such depreciation makes exporters more competitive, but right now it’s also accentuating a surge in raw material prices denominated in the greenback. That will sting corporate bottom lines.

El Salvador takes a risky punt on crypto

7 Sep 2021

Bitcoin is now an official currency in the Central American republic, alongside the U.S. dollar. There are potential benefits for a country that is so dependent on remittances from abroad, but President Nayib Bukele’s pioneering move has way too many downsides.

Crypto poses systemic risks that need swift remedy

7 Sep 2021

Digital currency trading venues are a $2 trln industry while some coins, like Tether, are backed by fiat currencies. If money markets freeze up, their positions are so large that they could have ripple effects. Watchdogs are classically behind in reining in the market.

How much is Wise worth?

5 Jul 2021

The money-changing app is listing in London without setting a price. Its worth depends largely on how much more foreign-exchange business CEO Kristo Käärmann can win from banks. A Breakingviews calculator shows Wise is due a roughly 20% upgrade from last year’s $5 bln price tag.

Wise’s FX land grab merits $6 bln valuation

5 Jul 2021

The money-changing app is listing in London without setting a price. Its worth depends largely on how much more foreign-exchange business CEO Kristo Käärmann can win from banks. A Breakingviews calculator shows Wise is due a roughly 20% upgrade from last year’s $5 bln price tag.

Review: Reining in the crypto-fanatics

25 Jun 2021

Ex-Swift executives Gottfried Leibbrandt and Natasha de Terán traverse the payments world in “The Pay Off”. Anecdotes and explanations lend pace and purpose. But despite warnings about central bank digital currencies and other novelties, they ask more questions than they answer.

Profitability makes Wise a true fintech unicorn

23 Jun 2021

Like financial-technology rivals, the UK money-changing group has a snazzy app and disruptive business model. What sets it apart is healthy earnings. Big banks can’t match its service without parting with fees worth $250 bln a year. Smaller ones may end up using Wise’s service.

Fintech Wise’s hybrid IPO may be a one-off for UK

17 Jun 2021

Like Spotify in the U.S., the money transfer group will list in London without inviting bids from would-be investors. A direct listing is alluring, but only open to companies that don’t need cash and already have a base of external shareholders. Few other hopefuls fit the bill.

Bank rules push bitcoin, not blockchain, to fringe

10 Jun 2021

The Basel Committee proposed punitive capital charges for some crypto assets. That will discourage JPMorgan and others from holding or trading in bitcoin. Yet standards-setters are more positive about the underlying technology. It’s a good balance between prudence and progress.

Capital Calls: Turkish gas, Generali, Garuda

4 Jun 2021

Concise views on global finance: President Erdogan’s “good news” on hydrocarbons smells off; the Italian insurer’s 1.5 bln euro bid for NN Group’s asset management unit may trigger a shootout; the Indonesian flag carrier’s long struggle to avoid bankruptcy is coming to a head.

Yuan bulls prod U.S.-China trade talks

3 Jun 2021

Beijing is trying to slow a blistering rally reinforced by foreign capital. The currency’s strength has yet to dent China’s goods surplus, but it could further saddle U.S. consumers with higher prices. That puts pressure on the White House to cut tariffs without losing face.

Capital Calls: Russia and US, Clothing IPOs, Food

3 Jun 2021

Concise views on global finance: The Kremlin tells its national state fund to get out of greenback-denominated assets; Rent the Runway thinks about going public; the FAO’s global food index hits its highest level in nearly a decade.

Capital Calls: Goldman Sachs, U.S. currency report

16 Apr 2021

Concise views on global finance: The Wall Street bank’s communications veteran, Jake Siewert, goes back to the future, sort of; Taiwan is dubbed a forex interventionist but avoids manipulator label.

Beijing fiddles while Huarong burns

16 Apr 2021

A slow implosion of the state-owned bad debt manager is spooking foreign funds holding $21 bln of its dollar bonds, and beyond. There has been no official signal as the market convulses. Bail Huarong out or let it default; China erodes investor trust leaving it dangling this way.

Turkey’s monetary meddling offers scant rewards

15 Apr 2021

The country’s central bank kept its interest rate at 19%. Having replaced his chief rate-setter in March, President Tayyip Erdogan hasn’t yet got the lower borrowing costs he wants. Rising inflation, a weak currency and the loss of credibility mean policy will need to stay tight.

South Africa offers Erdogan an inflation lesson

23 Mar 2021

A steep plunge in the lira, of the sort seen this week after Turkey’s president fired his central bank boss, usually drags down the rand. Not this time. The South African currency’s resilience shows the value of a credible and independent central bank left free to control prices.

Brexit legacy will clip sterling’s wings

21 Jan 2021

The currency hit an eight-month high against the euro. Vaccine rollouts, on which GDP rebounds depend, are more advanced in UK than many countries. But non-tariff barriers are hindering trade with the EU, which may hold back growth. That will limit the pound’s scope to fly.

Corona Capital: Intel, Run on guns

21 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Intel’s new boss gets closer to his big debut. Meanwhile, gunmakers are riding high on social tensions and pandemic angst, but could soon find they have fewer friends in high places.