Exchanges/Platforms

UK mistakes City liberalisation for a growth plan

15 Nov 2024

Finance minister Rachel Reeves wants to unleash the 153-bln-pound financial sector to boost the economy. It’s not clear that her reforms so far, like a share-trading venue for private companies, will do that. Meatier deregulation, meanwhile, would raise the risk of future crises.

Investors ignore the law of long-term averages

14 Nov 2024

US stocks are trading at 38 times cyclically adjusted earnings, near the most expensive level ever on that measure. For more than two decades, equities have defied predictions that valuations return to the historical mean. Yet conditions which enabled juicy returns are fading.

Shein margin wobble takes bite out of IPO value

14 Nov 2024

The e-commerce giant’s revenue growth slumped in the first half of 2024, and the net margin fell to 2% per The Information. Even if the business recovers, it creates uncertainty that’s compounded by a protectionist US government. Investors may struggle to see the upside.

Italy has more to gain from France’s pain

14 Oct 2024

Rome borrowing costs are converging with Paris. Prime Minister Giorgia Meloni’s stable government is pledging to contain its deficit and pushing through reforms, at a time when its peer is in turmoil. To press home the advantage, though, Meloni will need to take bolder action.

China’s stock market bazooka is yet to fire

10 Oct 2024

The People’s Republic recently unveiled a raft of measures to solve a housing bust and support the market, producing a pop of post-vacation enthusiasm. That’s now waning as investors await a bigger move. In this Viewsroom podcast, Breakingviews columnists discuss what comes next.

Hong Kong economic pain is marginal gain for LME

4 Oct 2024

Port activity and land prices have fallen so far that the London Metal Exchange is eyeing warehouses in the financial hub. That may spur more Chinese buyers to use the bourse. But despite more than a decade of Hong Kong ownership, storage in mainland China remains out of reach.

China and India reveal emerging market mistakes

3 Oct 2024

Investors often assume stocks in developing countries track economic growth, while valuations are a guide to future returns. The diverging path of Chinese and Indian equities over the past decade shows the flaws in this approach. Better to pay attention to capital efficiency.

China brokerage deal has more bark than bite

9 Sep 2024

The merger of Guotai Junan and embattled rival Haitong will create the country’s largest brokerage with assets of $225 bln. The overcrowded sector needs consolidation, but this deal probably won’t aid Beijing’s goal to foster a squad of world-beating investment banks.

Investors’ black-tinted glasses obscure Fed’s role

5 Aug 2024

Stocks are sinking, with major indexes down 6% or more in August. High tech valuations and Japan’s monetary policy are factors. But a US recession is a bigger fear. Workers and consumers are suffering, but not enough for Fed boss Jay Powell to slash rates as much as traders hope.

European boards have too little skin in the game

17 Jul 2024

Non-executive directors at big US companies get 60% of their pay in equity. That’s rare in Britain, France and Germany, where many board members own a slither of stock. Cash fees warp incentives, discourage engagement, and risk making Europe’s capital markets less competitive.

European board pay requires a US-style overhaul

16 Jul 2024

Non-executive directors at UK and EU-based firms own little equity in the companies they oversee. In this Exchange podcast, Liad Meidar of the hedge fund Gatemore argues that this is a problem, while Peter Boreham of the pay consultancy Mercer explains why it’s hard to change.

Li clan take a tiny step to beat China value trap

12 Jul 2024

A plan for an additional listing, possibly in London, for their $15 bln infra company will allow investors shunning Hong Kong to buy the stock. As for CKI's larger parent, its revenue is globally diversified. The family faces a long slog to limit damage from its China roots.

UK’s Labour takes dicey punt on a laxer City

11 Jul 2024

Chancellor Rachel Reeves’ endorsement of pre-existing regulatory proposals to boost London’s stock market will endear her to bankers working on deals and IPOs. But asset managers dislike plans that involve diluting shareholder rights. And Labour needs their help to boost growth.

Drugmaker’s US listing journey starts with failure

9 Jul 2024

Shares in $2 bln Indivior, which in June switched its primary venue from London to New York, fell 42% after flagging slower opioid-treatment sales. Investors may fear that CEO Mark Crossley took his eye off the ball. With little broker coverage, it risks becoming an orphan stock.

Wanted: A buffed-up board to put a sheen on Shein

28 Jun 2024

The $63 bln fast-fashion giant needs to find a chairman and board directors ahead of a London IPO. Providing comfort to fund managers jittery about Shein’s supply chain and cheap clothes will be tough. Breakingviews imagines how a headhunter might approach potential candidates.

Revolut’s desired $40 bln price tag is a stretch

24 Jun 2024

The UK fintech group wants to sell $500 mln of shares at a valuation far above its last level. To get to $40 bln, investors need to assume it’s like payment giant Adyen. With a lower margin and discounts warranted in other areas, Revolut’s value looks more like $20 bln.

A warning from history about large-cap stock booms

21 Jun 2024

Five decades ago, shares in a handful of large companies like IBM and McDonald’s propelled the US stock market to new highs before collapsing. As investors pile into tech giants led by $3.3 trln Nvidia, the earlier period may be instructive for those who believe history rhymes.

European bosses can only envy Elon Musk

20 Jun 2024

The Tesla chief’s $56 bln pay package is particularly vertiginous, but even less-blessed US CEOs do far better than their European peers. In this Viewsroom podcast, Breakingviews columnists discuss how the pay gap shapes executive habits across the Atlantic.

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.

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.