Predictions 2018

Pushy investors on board for 2018 Pacific cruise

22 Dec 2017

Campaigns at BHP and Myer could set the stage for a pick-up in Australian shareholder activism. Sydney offers enticing targets, shareholder-friendly rules and potentially supportive institutional owners. Expect to see more governance skirmishes Down Under in the coming year.

A Western money manager will turn Chinese in 2018

22 Dec 2017

While U.S. and European outfits battle competition and regulation, wealth is ballooning in China, and many firms are looking for growth. It’s the perfect recipe for a big cross-border deal, perhaps involving a name such as Franklin Templeton or Deutsche Bank's DWS unit.

Viewsroom: Saudi Aramco’s path may lead to China

21 Dec 2017

That the Hong Kong Stock Exchange will join Riyadh in hosting the world’s largest IPO is one of Breakingviews’ 2018 predictions. We also explain the method to our fortune-telling and lay out why China will win the 5G standards race and why Wall Street will learn to love bitcoin.

Domino’s Pizza is 2018’s most unlikely tech stock

21 Dec 2017

True, there’s nothing high-tech about pizza. But the take-out chain also dominates the “last mile” that delivery companies covet. Its app-to-infrastructure model makes Domino’s a little bit Uber, and a little bit Amazon. Investors are already baking in some futuristic assumptions.

Sun will be setting on Silicon Valley imperialism

21 Dec 2017

Expect tech firms to keep going public with lopsided share-class structures like Snap's that treat public investors as serfs. Rising pressure from fund managers and index creators, however, will bear fruit in 2018, mainly by imposing temporal limits to super-voting tendencies.

Uber for everything will arrive in 2018

21 Dec 2017

The tech industry spent 2017 awash with cash and keen to disrupt the entire global economy. But loopy ideas, on everything from juice-making to how to treat co-workers, suggest a little hubris is creeping in. Breakingviews duly offers a few investment pitches for the year ahead.

Fed calls time on monetary and regulatory activism

21 Dec 2017

After nearly a decade of zero rates, asset purchases and tighter rules, the central bank is stepping back. Janet Yellen started the trend as the crisis receded, but her chair apparent promises a real laissez-faire shift. Markets may struggle to adapt to life without a Powell put.

Activists are at the back door of fortress luxury

21 Dec 2017

Big family stakes allow purveyors of high-end brands to hoard cash and tolerate second-rate governance. But Elliott’s Samsung campaign shows that entrenched owners are not immune. And minority shareholder rights make names like Prada more vulnerable than they look.

India bids adieu to “promoter” capitalism in 2018

21 Dec 2017

The country's errant tycoons have fewer places to hide as Prime Minister Modi ushers in a new era of governance, starting with a strict insolvency code. This will send serial defaulters packing and signal a shift towards more market, creditor and shareholder-friendly forces.

Chinese government debt will go global

21 Dec 2017

A major index will include Chinese government bonds in 2018, dragging foreign money into a $9 trillion market. Beijing will appreciate the foreign stamp of approval. But sovereign guarantees will give scant cover against volatility spreading outwards from corporate credit.

China will plant a tech leadership flag with 5G

21 Dec 2017

The People's Republic will set many of the standards for ultra-fast mobile broadband. That will boost Huawei, ZTE, and others at the expense of foreign outfits like Nokia. This is a foretaste of the fights ahead for dominance of emerging technologies such as AI and electric cars.

Wall Street’s next challenge: graceful retirement

20 Dec 2017

Investment banks face a triple bonus of tax cuts, rules rollbacks and rising rates. They’re on the most solid footing in a decade. That makes this the perfect time for some long-serving bosses to step back. JPMorgan’s Jamie Dimon is the logical first choice.

Five possible triggers of the next market shock

20 Dec 2017

It takes a catalyst to set off a downturn and other reagents to sustain it. Breakingviews runs through a few more and less obvious elements: central-bank shocks, wayward exchange-traded funds, doubts about “crisis alpha,” unforeseen hedge-fund trouble and, yes, crypto-currencies.

Canada will be biggest loser in U.S. trade spats

20 Dec 2017

Trump threatened China and Mexico with tariffs, but the real levies hit Canadian lumber and Bombardier jets. While Ottawa is pushing other trade deals, America is its biggest export market. Souring NAFTA talks and fights over dairy, wine and paper make it the chief target.

Best thing Trump and Xi can do in 2018 is nothing

20 Dec 2017

The two leaders command half of the planet’s expected GDP growth. The biggest risks are more trade barriers, a Chinese housing market collapse, and armed conflict. All can be avoided if the U.S. president fails to use his powers and his Chinese counterpart opts not to use his.

India’s e-commerce war to surface on U.S. shores

20 Dec 2017

Amazon's arch-enemy Flipkart has good reason to snub Mumbai and head to New York for an IPO in 2018. Its biggest global peers are listed stateside. With SoftBank and Alibaba as backers, the $12 bln retailer is primed to take its local fight against Jeff Bezos to global investors.

China’s belt will get tighter and its road bumpier

20 Dec 2017

Xi Jinping's ambitious infrastructure plan enters its fifth year with some notable struggles. Countries are pushing back for political and economic reasons while Chinese banks grapple with mounting debt. So-called Belt and Road projects require more of a team effort in 2018.

Apple provides hedge against global tech backlash

19 Dec 2017

Authorities worldwide are stepping up action against technology giants over the way they erode privacy, use data to push rivals out of business and influence elections. As a security-minded purveyor of hardware, Apple stands apart. It’s likely to avoid the worst of the blowback.

U.S. political doomsday will hurt economic growth

19 Dec 2017

Republican and Democratic parties will splinter ahead of the 2018 election, marginalizing moderates. More firebrand politicians increases the chances of trade wars, a U.S. debt default and government shutdowns that harm the economy. Compromisers won’t be there to stop them.

Saudi Aramco’s backup IPO plan runs through China

19 Dec 2017

Venue shopping is proving difficult for Saudi's national oil giant. London's listing rules - and Qatar’s investment in the LSE - will be hard to overcome. Legal risks make New York iffy. A Hong Kong float, supported by a pipeline of cash from China, may be the least-bad option.