Government & Agencies

EU bank-saving raid can boost tired capital market

17 Apr 2024

European households have 33 trln euros of rainy-day cash, but not much invested in equities. Former Italian PM Enrico Letta reckons savers could fund the green transition if they had access to better stock funds. Forcing countries to lower tax and other barriers would help.

Germany engineers sharper China-EU autos debate

17 Apr 2024

Chancellor Olaf Scholz echoed Janet Yellen in using his visit to the People's Republic to warn against industrial overcapacity. But he also has reservations about Brussels’ potential EV protectionism. That suggests the bloc may yet take a more nuanced look at BYD and peers.

Wall St Aussie charm offensive only goes so far

17 Apr 2024

Blackstone CEO Steve Schwarzman and execs from BlackRock and Apollo wooed the country's $2.4 trln pension fund industry at a Melbourne event. The latter's private credit pitch, though, received a lukewarm response. It's a reminder that the appeal of direct lending has its limits.

 

Why rich nations have to keep helping poorer ones

16 Apr 2024

The world faces many onerous financial and climate challenges. Still, as Axel van Trotsenburg, the World Bank’s Senior Managing Director, explains in this Exchange podcast, governments and companies in advanced economies cannot afford to stop supporting developing ones.

Look out for a return of the US bond rollercoaster

16 Apr 2024

As short-term interest rates spiked, longer-term borrowing costs have lagged. The yield on three-month US Treasury bonds has exceeded the return on 10-year securities for 76 weeks, a near record. If this anomaly unwinds, falling bond prices could hurt fund managers and Uncle Sam.

An activist nudge is all it takes in Japan Inc

15 Apr 2024

Shares in the country's top property group, $31 bln Mitsui Fudosan, jumped 8% after it pledged to lift returns and halve strategic shareholdings. It partly answers Elliott's call for change, but peer pressure is at work, too. Pushy foreign investors can only claim some credit.

Middle East is complicating West’s grand strategy

15 Apr 2024

The U.S. and its allies wanted to focus on Russia and China. But the Gaza war - and now a conflict between Iran and Israel - is distracting them. It has also undermined support from poorer nations and boosted Donald Trump’s chances of returning to the White House.

BP takeover is both appealing and daunting

12 Apr 2024

Abu Dhabi National Oil Company recently considered buying its $110 bln British peer. It’s unlikely to be the only suitor. BP trades at a discount to other oil giants and recently installed a new CEO. But UK security concerns and EU antitrust rules present formidable hurdles.

Hong Kong catches tantalising glimpse of future

12 Apr 2024

The city's airport had its busiest week since 2020 thanks to the Rugby Sevens and HSBC's inaugural investment summit. Yet many Hong Kongers spend their free time on the mainland. As the hub generates some of its old buzz, politics and pragmatism drive it closer to its neighbour.

Swiss too-big-to-fail rules are too timid to work

10 Apr 2024

Following the Credit Suisse disaster, Finance Minister Karin Keller-Sutter will give the country’s bank regulator more teeth and raise capital requirements for $100 bln UBS. It all helps. However, there’s no sign authorities will be any more willing to wind down a big bank.

Hong Kong’s latest problem is a 99% nosedive

10 Apr 2024

That’s how much shares in cement maker China Tianrui fell in 15 minutes, erasing some $1.9 bln of value. It’s not the first such plunge on the city’s bourse, and at present outsiders can only guess at its cause. It’s a reminder that governance and transparency still need work.

India can grow fast with or without Narendra Modi

10 Apr 2024

The prime minister is hot favourite to secure a third term, and to lead the country into another decade of economic expansion. Yet projections of 6%-plus annual GDP growth are below the country’s own track record. And hitting the mark does not depend on one man.

Airbus obsessives have a shaky grasp of history

9 Apr 2024

The $140 bln pan-European group is flying high as rival Boeing stutters. Now carmakers and others are wondering if similar collaboration could help them face down overseas competitors. But Airbus’s idiosyncrasies and convoluted road to success make copycat plans pie-in-the-sky.

Next Chinese trade war could benefit the planet

8 Apr 2024

As Beijing floods the world with cheap green goods, the West will put up trade barriers. That will delay the energy transition in the United States and EU. But the glut of EVs, solar panels and the like will speed it up in China and much of the Global South.

Germany sovereign pension fund is sound but small

3 Apr 2024

Berlin will borrow to invest up to 200 bln euros in global equities to help pay for the retirement of the country’s fast-ageing population. The vehicle’s modest size will limit its long-term impact, but Europe can learn from this blend of public and private schemes.

Odd Washington deal creates anti-M&A synergy

28 Mar 2024

Senators on opposite ends of the political spectrum are joining forces to stop stock swaps like Capital One’s $35 bln Discover deal from being tax-free. The proposal probably wouldn’t generate much revenue. It does, however, build on the movement against corporate concentration.

UK’s leaky coffers are Thames Water’s lifeboat

28 Mar 2024

The utility is drowning in $19 bln of debt and may collapse in 2025 if its regulator doesn’t approve higher bills. A nationalisation could be the best solution but the government isn’t flush with cash. Unless PM Rishi Sunak breaks his fiscal rules, consumers will have to pay up.

LNG angst seeps from consumers to producers

27 Mar 2024

A few years ago, supplies of liquefied natural gas were scarce and prices sky-high. Extra capacity arriving this decade means there could soon be a price-sapping glut. Big suppliers like Qatar and Shell have long-term contracts that can ease the pain, but only up to a point.

Capital Calls: Shell and Russia

26 Mar 2024

Concise views on global finance: Russian state giant Gazprom will buy the British energy major’s 27.5% stake in a major Siberian liquefied gas field for the equivalent of $1 bln. Shell is however unlikely to be able to get hold of the cash any time soon.

Lower taxes would cripple Europe’s growth

26 Mar 2024

The bloc needs new public investment of about 3% of GDP for the green transition, defence, infrastructure, education and health. High debt loads limit borrowing and spending cuts hurt the economy. Instead of pledging lower levies, governments have to raise them.