Investment Banking

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.

China banks’ $900 bln buffer offers sham comfort

7 May 2024

That’s roughly how much special debt the country’s five largest lenders must raise to obey global rules for absorbing large-scale losses. It’s an improbable scenario in China’s state-controlled financial system. For the banks, extra funding costs add to a long list of headaches.

Macquarie bets its disappointing year is a blip

3 May 2024

The $47 bln investment bank handed investors their worst return on equity in more than a decade as earnings fell by a third. Yet it kept pay and other expenses flat. Previous years' impressive results give CEO Shemara Wikramanayake some breathing room before having to cut costs.

Republic First is the good kind of bank failure

29 Apr 2024

The shuttered lender was low on equity and high on drama, home to years of lawsuits and board fights. Even with familiar balance-sheet issues, there’s little risk of knock-on effects elsewhere. Bank windups are working - though judging by placid depositors, maybe a bit too well.

Vote no to bashing proxy advisers

25 Apr 2024

Corporate leaders at JPMorgan and AstraZeneca bridle when ISS and Glass Lewis criticize their governance. No wonder: Some high-stakes shareholder votes this year will be uncomfortable for feather-bedded bosses. Proxy firms are problematic, but they do more good than harm.

Blackstone’s cash pile will buy only so much time

18 Apr 2024

The investment giant is reaching into its $200 bln war chest, but selling less. Higher-for-longer rates also threaten to slow down deals. A protracted mismatch would sharpen the divide between fund backers focused on profit and shareholders benefiting from capital deployment.