Manufacturing

Capital Calls: Satellites deal, EU gas price cap

16 Dec 2022

Concise views on global finance: Private equity firm Advent is paying a 129% premium for Maxar, indicating that the volatile, costly satellite construction business could soar away from public markets; the EU is edging towards a controversial cap for gas future contracts.

Capital Calls: Danske’s money-laundering slap

14 Dec 2022

Concise views on global finance: The Danish bank’s $2 bln penalty for processing potentially illicit payments pales in comparison with BNP Paribas’ $9 bln hit in 2014, even though the suspicious money flows may have been larger.

Capital Calls: Nuclear fusion, U.S. inflation

13 Dec 2022

Concise views on global finance: The scientific breakthrough in potentially limitless power is exciting, but to make it commercially viable will be equally challenging; Consumer prices rose 0.1% in November, and there could be more good news to come once shelter data catches up.

Friendshoring makes sense if done in the right way

5 Dec 2022

The United States and its allies want to build up suppliers of goods such as solar panels in friendly countries so they’re not vulnerable to Chinese disruptions or blackmail. To avoid self-harm they should define friends broadly and not attack China economically, says Hugo Dixon.

Western firms’ Chinese red lines are not their own

2 Dec 2022

Anti-lockdown protests have got boards pondering what to do in case of an escalation. For companies like Tesla and LVMH the Chinese market is probably too crucial to consider an exit. Most firms will rethink their China presence only if their governments tell them to.

Taiwan’s Foxconn slowly checks into iPhone detox

1 Dec 2022

The $45 bln electronics maker’s relationship with Apple was a money-spinner. Yet even before protests disrupted Chinese production lines in November, the latter was hedging its dependence on Foxconn, denting profitability. Withdrawal will be gradual, painful and healthy.

China decoupling takes one step forward, one back

29 Nov 2022

Wealthy nations want to cut their reliance on the country’s factories and consumers. That’s happening in goods like electronics and auto parts, but trade and investment trends show the opposite in electric vehicles and other areas. The world is as dependent on China as before.

Capital Calls: Transatlantic chemicals deal

28 Nov 2022

Concise views on global finance: A potential acquisition of Univar by $10 bln German chemical distributor Brenntag makes sense, but investors may fear a bidding war.

Oatly’s best turnaround recipe is dollops of cash

25 Nov 2022

Shares in the $950 mln faux-milk maker are down 80% this year, and revenue growth is slowing. CEO Toni Petersson will struggle to stop burning cash, and has ruled out selling the company. That means a looming capital hike may have to be much bigger than he currently thinks.

Capital Calls: Fuzzy Fedspeak, Dr. Martens

24 Nov 2022

Concise views on global finance: The U.S. central bank has left traders guessing the meaning of the word “various”; shares in the recently listed British bootmaker fell 20% after sales missed expectations, and a warning that its investment needs will hurt profitability.

Capital Calls: Japan baulks at U.S. car credits

7 Nov 2022

Concise views on global finance: Tokyo warns America’s Inflation Reduction Act could discourage Japanese investment into the world’s biggest economy.

Capital Calls: Ocado in South Korea

1 Nov 2022

Concise views on global finance: The $6 bln online grocer’s shares surged almost 40% after it announced a partnership with Lotte Shopping, showing that its strategy of building warehouses for global supermarkets may have legs.

Foxconn factory chaos bursts China’s Covid bubble

31 Oct 2022

The Apple supplier is scrambling to stem a potential 30% fall in iPhone shipments from a key factory as workers flee infection controls. Such disruptions are a recurrent risk under Beijing’s pandemic policy. It’s a big incentive to shift supply chains elsewhere, however painful.

Europe’s industrial mess has protectionist endgame

26 Oct 2022

Manufacturers like Germany’s $42 bln BASF face a toxic brew of high energy prices at home and rising risks in China. That implies a freeze on new investment, and a loss of market share to foreign players. To stop that, European states may ultimately intervene with tariffs.

Capital Calls: TSMC

13 Oct 2022

Concise views on global finance: The $324 bln Taiwan Semiconductor Manufacturing barely addressed questions regarding U.S. technology export controls on China during its earnings call.

U.S. high-tech chip curb risks lower-tech blowback

11 Oct 2022

Washington’s export controls hinder China from developing advanced semiconductors needed for supercomputers and the like. But the ban may prompt Chinese chipmakers to hasten their progress in the commoditised parts of the market, embedding firms like SMIC in global supply chains.

Capital Calls: Peloton races tough economic cycle

6 Oct 2022

Concise views on global finance: The $2.9 bln fitness company is laying off staff for the fourth time this year in a turnaround bid for survival.

South Korea gets short end of U.S. trade stick

3 Oct 2022

Seoul wants to sell more chips and other goods overseas, but Washington is luring Samsung and compatriots to make in America. A trade deficit and crashing won offer a glimpse at what a U.S. revival in high-tech manufacturing means for the $1.8 trln trade-dependent Asian economy.

Capital Calls: ECB rate hike

8 Sep 2022

Concise views on global finance: Europe’s central bank risks recession to combat inflation.

Intel makes chips look almost like infrastructure

23 Aug 2022

Brookfield is putting up half the cost of two $30 bln Arizona plants, at a rate somewhere between what Intel pays for equity and debt. Yet chips are riskier than traditional infrastructure, suggesting Intel is giving up more than its partner to make the deal work financially.