Investment Banking

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.

Austerity is a bad economic answer at a worse time

16 Apr 2024

While the global economy is running hot right now, the International Monetary Fund warns that long-term growth will be below its 3.8% pre-pandemic trend. The problem is, a familiar prescribed fix of budget cuts and high rates has failed in the past and would do so again today.

Goldman’s plan B unexpectedly upgraded to a B-plus

15 Apr 2024

A bond-trading surge helped lift quarterly earnings at David Solomon’s firm to $4.1 bln. Investors prefer stabler revenue sources, and Goldman’s pitch that markets activity is less volatile is born of necessity. Still, it helps that traditional banking has lost some shine.

Gulf bank’s M&A hunt risks shareholder injury

15 Apr 2024

First Abu Dhabi, worth $40 bln, may be eyeing Turkish lenders following a short-lived pursuit of Standard Chartered. An overseas deal would help to diversify away from corporate and investment banking, but the cost savings look slim. Better to focus on growing at home.

JPMorgan wrestles with the tyranny of expectations

12 Apr 2024

The biggest US bank is avoiding being pinned down on where the economy will go next. Problem is, that’s now the overwhelming focus for investors gauging the banking business. Boss Jamie Dimon only stands to lose from staking a position. The best he can do is plan for the worst.

Market forces knock ominously on US realtors’ door

12 Apr 2024

Home buyers will soon find it easier to negotiate fees they pay to 1.5 mln agents – a move that might have happened earlier in a less distorted market. Some brokers will earn more. But the reforms are likely to shrink the fee pool, which is tricky for ancillary firms like Zillow.

Big banks turn inflationary lemons into lemonade

11 Apr 2024

Stubbornly high consumer prices may delay US monetary easing, a boost to lenders like JPMorgan or Citi that thrive amid high rates. Further relief could come from the dilution of tough new capital rules. For smaller banks, exposed to stressed borrowers, life tastes more sour.

Blackstone cures two ailments in one Moderna shot

27 Mar 2024

Higher costs of capital are pressuring CEOs into tough spending decisions, while buyout shops flush with cash want to deploy it. This dynamic makes a $750 mln deal to fund a biotech project a crafty solution. The hard end of the bargain: ceding value from promising flu research.

Japanese investors becoming the life of the party

21 Mar 2024

ValueAct, Elliott and Berkshire Hathaway have deployed some $16 bln to uncover value in Tokyo-listed stocks. They’re receiving warmer welcomes than raider T. Boone Pickens did in 1989. Even better, the US trio’s success is helping inspire local funds to sustain the momentum.