Financial Services

Bankers’ IPO support could easily buckle

26 Sep 2023

Arm, Instacart and Klaviyo egged on opening pops for their listings by selling a meager number of shares, but have fallen since. While big debuts are good for the companies, their inability to outpace a still-weak market means the opportunity for others to follow remains narrow.

Nomura is merely first in line for new China risk

25 Sep 2023

Charles Wang Zhonghe, the firm’s Hong Kong-based chair of investment banking for the People’s Republic, is barred from leaving the mainland. Overseas banks committing to bulk up in the country may no longer be able to avoid the effects of President Xi Jinping’s crackdowns.

Uncle Sam risks recession by a thousand cuts

22 Sep 2023

A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.

UBS bondholders tee up risky goldfish impression

20 Sep 2023

The $84 bln bank may issue contingent convertible bonds, months after a state-led takeover of Credit Suisse burned the defunct lender’s debt. Market prices suggest it may not pay a big penalty for Switzerland’s sins. That invites bank overseers to burn other CoCos in future.

How Ukraine’s banks can survive another war

19 Sep 2023

The country’s former central bank Governor Valeria Gontareva explains on The Exchange podcast how the radical steps implemented in 2014 helped Ukrainian lenders withstand the Russian invasion and kept the financial system afloat, and why Ukraine needs to keep reforming.

SocGen chief gives investors risky cold shower

18 Sep 2023

The 19 bln euro French bank’s new CEO Slawomir Krupa wants his bank to run with lower costs by 2026. Société Générale’s below-par valuation might then recover. But lowly growth forecasts in the meantime make this an unappetising blend of thin gruel today, with only future hope.

Guest view: Bank balance sheets hide climate risks

15 Sep 2023

While regulators fret about lenders’ exposure to higher interest rates, the dangers from global warming are building in the shadows. Unless banks reset their financial statements, investors and the planet will be worse off, writes Natasha Landell-Mills of Sarasin & Partners.

ECB’s rear-view policy risks crashing the economy

14 Sep 2023

Fears of stubbornly high consumer prices prompted President Christine Lagarde to push rates to a record 4% on Thursday. Yet the central bank admits inflation will be around the 2% target by 2025. The bloc’s growth is already stagnating. The latest action will worsen its plight.

Capital Calls: British wages

12 Sep 2023

Concise views on global finance: UK pay rose by an annualised 8.5% in the three months to July – more than inflation. That’s good for retirees, whose pensions will rise by that amount. But such a hot labour market is likely to prompt the Bank of England to hike rates next week.

Instacart offers IPO investors a free lunch

11 Sep 2023

The grocery-delivery service is seeking a $9 bln valuation, a fifth below its last internal benchmark. Growth and high retailer concentration are risks, but its advertising business is getting unfairly short shrift. The company’s steep post-Covid discount is priced to move.

India’s fintech partygoers nurse a needed hangover

11 Sep 2023

The $16 bln industry’s annual shindig was a sombre affair. Founders touted sustainable growth amid dipping valuations, regulators preached risk mitigation and big investors stayed away. Waning euphoria for the country’s digital ecosystem may, though, be an early sign of maturity.

Apple’s high valuation exposes it to China’s whims

7 Sep 2023

The $2.8 trln tech giant's shares lost 7% in two days after reports said Beijing will impose a ban on officials using iPhones. Current retaliatory measures shouldn’t matter much to valuation. But more draconian assumptions show a problem, especially at Apple’s elevated multiple.

Asia’s richest banker makes a meal of succession

4 Sep 2023

Uday Kotak has quit early as CEO of his $43 bln lender. He seems to be pitching it as a way for Kotak Mahindra Bank to appoint a replacement free from his interference. But he’s on the board and the firm’s biggest shareholder. And his legacy is tied to whoever takes his spot.

UBS cost-cut gains are a double-edged sword

31 Aug 2023

Boss Sergio Ermotti will keep Credit Suisse’s domestic unit, and hopes to slash $10 bln through the merger. His higher savings target easily offsets the hit from vanishing revenue as clients flee the acquired bank. The risk is that Swiss politicians think UBS’s deal is too sweet.

Revamped Pru faces up to an old problem

31 Aug 2023

CEO Anil Wadhwani boosted the insurer’s new business profit by a third in the first half and laid out new growth targets. But despite shedding its UK and US arms to focus on Asia, the $35 bln group’s valuation still lags rival AIA. A slowdown in China makes it harder to catch up.

With housing, Buffett chooses a great location

30 Aug 2023

The billionaire’s Berkshire Hathaway recently backed US homebuilders such as Lennar even as mortgage rates rose. Although Americans will pay more in interest, higher wages can make up the difference. Plus, existing home sales have ground to a halt. Builders are in prime position.

China’s Big Four banks are bracing for impact

30 Aug 2023

The group, worth a combined $680 bln, will bear the brunt of the country’s property mess: state lenders are to cut mortgage interest rates and AgBank is warning on margins. Investors are attuned to banks’ policy role but even at less than half book value they’re far from cheap.

UBS inherits tricky wealth legacy in Asia

29 Aug 2023

By gobbling up Credit Suisse, Sergio Ermotti is expanding his bank’s clout in serving the Asian super-rich. Yet exposures to risk-taking entrepreneurial clients used to big leverage pose a challenge. Regaining the wealth ground lost by its Swiss rival will also not come cheap.

Global insurers surf China’s storm while they can

24 Aug 2023

AIA’s value of new business in Hong Kong more than doubled in the first half. The $100 bln giant and peers are benefitting again from selling policies to returns-hungry mainland visitors. Insurers may become victims of their success if Beijing’s angst over capital flight deepens.

Private funds’ regulatory dream meets logical end

23 Aug 2023

Securities watchdogs are proposing safeguards for private equity and hedge fund investors. The now-$25 trln industry owes its growth partly to lighter regulation than at the banks it is displacing. Tighter rules will irk some, but growing up should bring new responsibilities.