Exchanges/Platforms

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.

Investors are hunting securitization’s oddballs

4 Jun 2024

Whether a bundt cake bakery or an internet address, if it generates steady cash, it can be diced up in the financial alchemy of securitization. In this Exchange podcast, Janus Henderson’s John Kerschner explains the promise and perils, and why the oddest assets can be the best.

CEO pay is hidden factor in US relisting trend

29 May 2024

Plumbing supplier Ferguson almost doubled its boss’s compensation after moving to New York, while $55 bln CRH is reviewing its remuneration after switching too. It’s not something boards like to talk about. But investors might support US-style pay if it attracts the best talent.

Ethereum set to stress test US crypto deregulation

22 May 2024

Congress wants to dilute the SEC’s power over digital currencies. Its proposal could pave the way for new ETF products, which have turbocharged bitcoin. Financial wreckage from past laxity, and the industry’s own sketchy history, justify agency boss Gary Gensler’s resistance.

A confident India can afford to squeeze investors

21 May 2024

Finance Minister Nirmala Sitharaman dismissed reports the government, if re-elected, will majorly alter how asset sales are taxed. There is merit to the idea, however. It could help deepen the $550 bln corporate bond market. The buoyant rally in stocks provides an opportunity.

Japan’s value push will turn into a shove

16 May 2024

Shareholder meetings next month will help gauge progress in the official campaign to boost corporate performance. Toyota, SoftBank and Fast Retailing have not signed up. Given the importance of ensuring resilience in the $4.2 trln economy, Tokyo is likely to apply more pressure.

Total’s US re-listing idea could backfire

8 May 2024

The $170 bln oil major is considering decamping to the United States to court oil-friendly investors. Yet getting included in the big stock index would mean cutting French roots, and a valuation boost looks unlikely. Staying at home may also be better for its growing power unit.

L’Occitane sets a high bar for Hong Kong exits

30 Apr 2024

Chairman Reinold Geiger’s offer to take his skincare group private values it at 6 bln euros, a decent 30% premium. Funding led by Blackstone might help keep a lid on interest expenses while the company restructures and seeks a listing in Europe. Other buyouts will be trickier.