Investment Banking

Banks prep for this-time-it’s-different deal boom

16 Jul 2024

Morgan Stanley’s 51% pop in investment banking revenue rounds out a strong quarter for Wall Street rainmakers. Peers like Goldman Sachs and JPMorgan are also eyeing a pick-up in M&A and underwriting. But the clients look different now, and so do the banks – not all in a good way.

Now is least-bad time for JPMorgan CEO to move on

12 Jul 2024

Jamie Dimon’s 18-year tenure has rarely enjoyed such a benign backdrop: record-high profit, a revival underway for Wall Street’s dealmakers, and a regulatory hammer-blow forestalled. As successors stake out a higher profile, his steady hand might be useful elsewhere - like in DC.

Shein would lose all its shine in a Hong Kong IPO

2 Jul 2024

The $63 bln online retailer may debut in the Asian hub if its plan to list in London fails, per the FT. Not only would that confirm its failure to thread the needle between its Western markets and its Chinese roots. It would result in a slashed valuation and orphan-stock status.

Even smooth bank stress-test results fray nerves

27 Jun 2024

Big US lenders aced their annual checkups, and have nearly $300 bln of extra capital, per Breakingviews math. Much of it will be tied up for maybe a year until the Fed finalizes its botched revisions to Basel rules. For now, the exams just show shareholders what they’re missing.

Banks grab AI-generated tiger by the tail

26 Jun 2024

Sleeker IT systems, stronger fraud defenses and other algorithmic upgrades could yield nearly $200 bln of profit for lenders by 2028, one study finds. An efficiency revolution isn’t evident in valuations, however. The new tech may pay higher dividends to customers than investors.

UBS deal reflects resilient demand for China trade

25 Jun 2024

Its sale of Credit Suisse’s Chinese securities JV stake to a state-run firm greases the Swiss bank’s plan to take control of another unit, and snubbed bidder Citadel still looks keen to enter the market. Conditions are tough but firms are shoring up their future on the mainland.

China’s bureaucrats can repopulate unicorn herd

24 Jun 2024

President Xi Jinping wants to know why the number of new $1 bln startups has dwindled. His crackdown on the tech sector and a sluggish economy have discouraged venture capitalists and entrepreneurs. Deploying state funds and reopening IPO markets can help revive animal spirits.

China central bank’s reform push is shrewd gambit

20 Jun 2024

Governor Pan Gongsheng hinted at a substantial revamp, including trading government bonds and simplifying interest rates. The changes will be a gradual process, but after having its wings clipped, they should help the central bank reassert its power in setting monetary policy.

UBS deal exposes Swiss trustbusters’ inadequacy

19 Jun 2024

Despite competition concerns, the $100 bln bank has escaped antitrust blowback from last year’s purchase of troubled Credit Suisse. Any doubt could have undermined the deal, and hence the rescue. But Swiss legal tools to monitor further competition risks look especially weak.

Citigroup makes unintended case for AI in finance

18 Jun 2024

The mega-bank has embarked on a PR blitz for its trade-finance business, which accounts for about half of earnings. Yet boss Jane Fraser’s persuasive plans are at risk from gaffe-prone staff and clunky systems. Tech that improves on humans and computers can’t come fast enough.

PAG’s downsized Asia fund could pay off handsomely

17 Jun 2024

China dealmaker Weijian Shan raised $4 bln for his firm's buyout fund, less than half the target, after refusing to cap exposure to the world's second-largest economy. He'll have more freedom than rivals to chase returns from discounted Chinese assets. That could be lucrative.

Japan’s value push is starting to lose momentum

14 Jun 2024

Notwithstanding big activist campaigns, tallies of shareholder proposals tabled for company annual meetings this month look underwhelming. The stock rally is fast fading too. Japan has a long history of disappointing investors. The stakes for how fund managers vote are rising.

Euro zone banks’ periphery premium is here to stay

13 Jun 2024

Lenders in Ireland, Italy, Greece and Spain on average trade with a 30% higher price-to-tangible-book value than French, German and Dutch ones. It reflects a reversal of fortunes between the old periphery and core – but also different business models, meaning the gap may persist.

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.

Korea’s short-selling aversion mars reform push

30 May 2024

Seoul doesn't want to allow the practice until it stamps out so-called naked illegal trades in the $1.9 trln market. But the problem is overstated and jars with a push to unlock shareholder value. The government's pandering to retail investors only hurts them in the long run.

UBS succession menu looks unnecessarily short

28 May 2024

The $100 bln bank ruled out external candidates to replace CEO Sergio Ermotti in about three years, the FT reported. Grooming home-grown successors is good planning. But none of the internal frontrunners currently offer what UBS will most need: a convincing US growth strategy.

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.

HSBC’s big pair of shoes will be hard to fill

9 May 2024

The surprise departure of boss Noel Quinn, who dramatically reshaped the firm, puts the globe-straddling bank on the spot: appoint a steward of its strategy from within, or a new thinker from outside? In this Viewsroom podcast, Breakingviews columnists debate the $170 bln choice.

Financial elite go long American exceptionalism

8 May 2024

The US economy’s strength buoyed spirits at Michael Milken’s annual jamboree, where everyone from Elon Musk to Ken Griffin held court. More surprising is optimism that the streak has longer to run. It’s a bold consensus with inflation, deficit and property-loan threats lingering.