Money‚ Markets & Macroeconomics

India convincingly overcomes its IPO demons

14 Aug 2024

Cautious pricing is paying off. E-bike maker Ola surged on its debut and e-commerce platform Brainbees jumped 46%. The success by the unprofitable SoftBank-backed firms clears the way for big deals that will help the country retain Asia's IPO crown as other venues falter.

Stocks are still strapped into a rollercoaster

13 Aug 2024

The VIX, an index that tries to gauge investors’ fears, soared 180% last Monday as stocks tumbled. Better US economic data and soothing words from the Bank of Japan have brought it down since. But history, and the shape of today’s markets, suggest that volatility is here to stay.

Iran danger marks return of oil’s risk premium

13 Aug 2024

Conflict in Gaza and tit-for-tat attacks in the Middle East have desensitised markets to possible supply shocks. A US warning of imminent retaliation against Israel changes that. Despite weaker demand, oil prices reflect the dangers of infrastructure and tankers becoming targets.

Power grids’ low-wattage resources may spark M&A

13 Aug 2024

European electric utilities have to invest big to meet rising demand. Yet balance sheets are laden with debt and raising equity is tough. Some will have to sell assets, or whole companies. Iberdrola’s $5 bln acquisition of a UK peer at a decent premium could be the first of many.

China bond frenzy puts central bank in quandary

13 Aug 2024

Beijing is meddling in the market to stop long-term yields plunging even though strong demand for safe-haven government debt reduces the cost of borrowing more. Trouble is, the PBOC is worried about excessive speculation and other risks. That leaves it facing an uphill battle.

Flying PIIGS nations stir rethink in Europe’s core

12 Aug 2024

Former crisis economies like Spain, Greece and Italy have outpaced France and Germany by up to 20% since the pandemic. Lower exposure to manufacturing, a tourism boom and Brussels funds all helped. The role reversal may push Berlin to tolerate looser fiscal and monetary policy.

Taiwan is punching well above its market weight

12 Aug 2024

Share sales and convertible deals are surging on the island where TSMC’s $748 bln market value exceeds GDP thanks to an AI-led rally. The market could surpass China’s weighting in global indices as profits trump geopolitics. For bankers, it's a counterintuitive bright spot.

KKR shows it’s business as usual in Japan Inc

9 Aug 2024

The US fund is offering $4 bln to take IT-specialist Fuji Soft private, a year after activist 3D kicked off a sales process. Despite a strengthening yen and volatile stock market, it's a reminder that there's still value to be unearthed. Similar deals will keep ticking along.

Jay Powell excels at his top job: punching bag

8 Aug 2024

Market ructions have revived Washington’s love of bashing the Federal Reserve and its chairman. From Elizabeth Warren to Donald Trump, public figures can take potshots knowing Fed independence limits the consequences. History suggests when politics really reigns, chaos ensues.

The Bank of Japan’s flipflopping can backfire

8 Aug 2024

Days after Governor Kazuo Ueda talked up interest rate hikes, his deputy is suddenly playing down the prospect. That may be intentional but it muddies the message to Japanese businesses on the outlook. It also overplays Japan’s role in sparking the global market ructions.

Succession stakes in India Inc keep rising

7 Aug 2024

Gautam Adani, 62, says his four heirs will co-run his sprawling $200 bln infrastructure empire when he retires. That aims to retain the benefits of size. All three of India's top business families face a similar challenge. Their plans will shape the $3.5 trln economy.

Warren Buffett sagely ignores his own advice

6 Aug 2024

The Omaha billionaire once warned that having too much cash is a poor investment. After selling a big Apple stake, his Berkshire Hathaway now sits on some $275 bln of it, towering over other US corporate holdings. As markets wobble, he and his war chest are kings again.

Labor market flags growth slowdown not recession

5 Aug 2024

A rise in the US unemployment rate to 4.3% was a driver of the global equities rout, fueling fears of an economic contraction. But rehired workers and immigrants are boosting supply, adding jobs and cooling wages. The real worry will come if more firms have layoffs like Intel’s.

Investors’ black-tinted glasses obscure Fed’s role

5 Aug 2024

Stocks are sinking, with major indexes down 6% or more in August. High tech valuations and Japan’s monetary policy are factors. But a US recession is a bigger fear. Workers and consumers are suffering, but not enough for Fed boss Jay Powell to slash rates as much as traders hope.

China’s luxury push paves way for sin tax rejig

5 Aug 2024

Beijing unveiled a 20-point plan targeting consumption of things like yachts and cruise ships. It looks underwhelming as spending remains anaemic in the $17 trln economy. Yet local governments have incentive to step up: a potential luxury goods and services tax windfall.

Japan’s stock market faces a moment of truth

5 Aug 2024

Equities are falling fast as central banks rapidly recalibrate monetary policy and fears rise of a hard landing for the US economy. Japan Inc’s historic bull run was supported by a weak yen. The currency’s sudden reversal will reveal how much substance is beneath the froth.

Stronger yen is the least of Toyota’s problems

2 Aug 2024

The carmaker shed $30 bln of market value after a decisive rate hike in Japan boosted the currency. Embattled Chair Akio Toyoda is also staring at patchy earnings and a government request for "drastic reforms". As foreign exchange benefits fade, there is nowhere to hide.

Reluctant rate cut leaves the BoE with a lot to do

1 Aug 2024

The Bank of England lowered borrowing costs to 5% – its first such move since the pandemic. But division in its ranks and Governor Andrew Bailey’s cautious tone imply further easing will be slow. Given the fall in inflation, that will unnecessarily crimp Britain’s weak recovery.

Oil is an imperfect gauge of Middle East risk

31 Jul 2024

Brent crude prices rose 2.5% after senior Hezbollah and Hamas leaders died in strikes blamed on Israel. Oil traders have grounds to see the danger of a wider war as limited, but automated trading may increasingly act to muffle any concerns. It’s hard to tell which is right.

Bank of Japan boldly doubles down on a new normal

31 Jul 2024

Governor Kazuo Ueda surprised with a rate hike and dangled the prospect of further tightening. Sluggish consumption and falling real wages remain major hurdles for the $4 trln economy but the central bank’s actions offer some confident and clear policy direction at last.