Healthcare

NMC mess implies London needs fiercer watchdogs

27 Feb 2020

The Gulf hospital operator fired its CEO after revealing undisclosed debts. Its poor governance and disclosure sit awkwardly with the UK’s aim to be the world’s top venue for foreign companies and capital. Keeping that reputation requires tougher penalties for bad behaviour.

Breakdown: Coronavirus goes global

27 Feb 2020

China’s draconian efforts have slowed the new disease, but it’s now spreading worldwide. Competent and open government is the best defense against hospitals and society being overwhelmed. Nations may have to deal with recurring outbreaks. Breakingviews explains what to expect.

Supply chain “tiger traps” demand better signposts

27 Feb 2020

The centuries-old business of lending to companies’ suppliers has become a 2.8 trln euro playground for financial and technological innovation. Tools that help firms to better use capital can flatter debt levels and exacerbate a liquidity crunch. Investors need more transparency.

Virus aid one-upmanship spreads across China tech

24 Feb 2020

Meituan Dianping is subsidising takeout while smartphone-maker Xiaomi may diversify into medical equipment to help fight the outbreak. Such moves are laudable, given China’s poor track record in philanthropy. The financial impact on companies, though, looks less certain.

Chinese consumers imperil V-shaped virus rebound

24 Feb 2020

The slowdown in new Covid-19 cases outside Hubei has fed investor optimism. Local stock prices are trading at pre-outbreak levels, helped by stimulus efforts. But even if the epidemic has peaked, which is far from certain, stress in the private sector hints at a slower recovery.

Air France lays down worrying coronavirus marker

20 Feb 2020

The Franco-Dutch airline’s shares fell 7% as it warned of a 200 mln euro hit from the virus. Rivals BA-owner IAG and Lufthansa will also feel the travel drag. Yet Air France-KLM’s estimates count on a quick resolution. That suggests even more pain could be ahead for investors.

Hadas: U.S. healthcare passions resist rationality

19 Feb 2020

Americans pay far too much for unequal and at best average medicine. Europeans are right to wonder why, especially as they can provide several superior alternatives. The best explanations are privilege, tradition and tax-phobia. The first is unjust and the other two are confused.

Virus could spur buyout appetite for Chinese food

17 Feb 2020

McDonald’s and Haidilao have closed stores as the epidemic spreads. They can weather the storm, but other big local chains are running low on cash. Until now, China’s $717 bln restaurant sector and private equity have remained wary of each other. That may be about to change.

AstraZeneca headache goes way beyond coronavirus

14 Feb 2020

China is the drugmaker’s second biggest market by sales, making the outbreak a bigger issue than for peers. But revenue there disappointed anyway, as did overall cancer drug sales. Pharma’s competitive pressures are making it harder for CEO Pascal Soriot to please investors.

Epidemics are tough to turn into profit

12 Feb 2020

The new coronavirus has the world on edge. Healthcare companies are ramping up production of test kits and researching treatments and vaccines. Yet past events like SARS show slow R&D, high production costs and political pressure on pricing often add up to disappointing returns.

Viral CLSA note delivers welcome rosy outlook

12 Feb 2020

An interview the Hong Kong broker conducted with a SARS expert has been widely circulated, owing in part to a comparison of the new coronavirus to a bad cold. It’s a rare upbeat assessment that defied consensus. The outcome is instructive for many sheep-like market forecasters.

Hadas: Reckless finance will speed virus recovery

12 Feb 2020

Medical caution helps to limit the spread of infectious disease but for treating the outbreak’s monetary side effects, the best cure may be direct government support. Risky Chinese and China-facing borrowers will suck up cheap credit on an imprudent road to restoring confidence.

KKR can profit from Gulf hospital emergency case

10 Feb 2020

Buyout funds including the U.S. group are eyeing the $1.9 bln NMC Health. Its value has sunk amid attacks by short-seller Muddy Waters, poor disclosure and forced sales by large shareholders. It’s a risky move, but the depressed share price offers any buyer a healthy cushion.

Rich world is a safer distance from virus fallout

10 Feb 2020

Disruptions to Chinese demand and factories will hurt Japan, Australia and South Korea more than the United States, despite damage done to the likes of Apple and Starbucks. But worst hit will be poor nations that rely more on the People’s Republic for trade, tourists and funding.

Chinese panic is more contagious than coronavirus

7 Feb 2020

Shoppers are aggressively hoarding rice, toilet paper and vegetables, and sealing off their gated apartment complexes. That suggests they think things will get a lot worse before they get better. Such anxiety may become self-fulfilling; economic malaise can outlive an epidemic.

FCA’s China virus immunity only goes so far

6 Feb 2020

The Italian-American carmaker has struggled to make inroads in the Middle Kingdom’s vast market. The low exposure is an antidote to coronavirus concerns that are keeping customers off the road. But if a lockdown in China drags beyond February, FCA’s supply chain may unravel.

Virus reveals China as global oil’s swing consumer

6 Feb 2020

Saudi Arabia may cut output to offset a demand slump due to the coronavirus. The People’s Republic’s thirst for imported oil, and uncertainty about the length and severity of the crisis, make that a tricky call. Getting it wrong risks opening the door to other exporters.

Merck spinoff pits cash now vs. excitement later

5 Feb 2020

The $217 bln U.S. drugmaker joins Pfizer and GSK with plans to separate its steady from fast-growing products. The former’s cash flow will appeal to investors seeking stability. The latter will have Keytruda, its monster cancer drug. But stodgier businesses can be the better bet.

Hadas: China virus upends development hierarchy

5 Feb 2020

For poor countries hoping to become richer, vaccines and clean water are the priority. Hygienic food chains and fast responses to contagion tend to come later. The rapid spread of the devastating coronavirus is the result of this ranking. Healthier growth may need to be slower.

For Macau investors, all bets are off

4 Feb 2020

The territory is closing casinos for two weeks to contain the virus. Visits to Sands and rivals may be postponed, not lost, but only a real gambler would double down on Macau now. Home entertainment from the likes of iQiyi, China Literature or Perfect World offer better odds.