Predictions 2018

Privatisation is no longer a dirty word in India

19 Dec 2017

The state has been stealthily reducing its role in industry by allowing private players to gain market share. There's appetite for a more aggressive approach. If national carrier Air India can be sold, look for banks, energy and other assets to follow if Modi wins a second term. This is a Breakingviews prediction for 2018. To see more of our predictions, click here.

A deluge of scandals in Japan will drive change

19 Dec 2017

Embarrassing lapses in governance and, perhaps even more painfully, in quality control have dented the country's reputation. The revelations are likely to continue in 2018. Company bosses will need to show that they understand what is really going on inside their organisations.

U.S. will miss out on infrastructure again in 2018

18 Dec 2017

From air-traffic control to roads to schools, the White House says it’s a priority but focuses its energy elsewhere. Tax policy might boost private capital, yet other barriers lurk. And as the GOP squeezes the budget, the feds will have less to spend. It adds up to more gridlock.

Bond vigilantes will grab power from central banks

18 Dec 2017

Governments’ net debt issuance in 2018 is set to outstrip central bank buying for the first time in four years. That gives investors a welcome chance to hold profligates to account. Bond markets may, however, be prone to over-reaction as they rediscover their rusty powers of discernment.

Latam’s turn from populism will be put to the test

15 Dec 2017

Demagogues of right and left will test the region's recent embrace of pro-business pragmatism in 2018. Presidential elections in Mexico and Brazil will feature firebrands keen to exploit voter anger at corrupt elites and lawlessness. The center, if it holds, will emerge stronger.

Which CEO will make a move for the White House?

14 Dec 2017

Disney's Bob Iger may be off the list now, but other corporate chiefs can consider parlaying their careers into politics thanks to Trump. Think Starbucks’ Howard Schultz or Facebook’s Sheryl Sandberg. But shareholder approval isn't the same as voter awareness of business stardom.

Chancellor: Bitcoin speculators face total wipeout

13 Dec 2017

Bubbles - in tulips, railroads or the Mississippi Co - aren’t just about the madness of crowds - nor are they simply manifestations of excess money. And they always offer a premonition of the future. Whatever the future for crypto-currencies, it’s clear that bitcoin has none.

Ambani is programmed to punch through $100 bln

13 Dec 2017

Mukesh Ambani's Reliance Industries could be India's first mega-cap stock. His refineries are at the mercy of oil prices, but his bid to dominate Indians’ digital lives is generating excitement. A potential listing of his upstart telecoms business will add to the upward momentum.

Cox: Popping gun bubble to bring financial casualties

12 Dec 2017

Five years since Sandy Hook, the firearms trade has never had a better friend in the White House than Donald Trump. Yet the industry is in terrible shape, having already fulfilled years of future demand. Storied Remington, maybe others, will face bankruptcy in 2018.

Britain heads for Brexit in name only

8 Dec 2017

Theresa May’s deal with the European Union averts a chaotic divorce for now. But a fudge about the Irish border exposes the difficulty of preserving trade while leaving the bloc. A transition phase will create scope for May - or another prime minister - to make new concessions.

Wall St poised to stop worrying and love bitcoin

1 Dec 2017

Crypto-currencies are set to take center stage. Mike Novogratz is launching a hedge fund, exchanges are teeing up futures contracts, big banks are likely to enter the fray and even the Fed is taking notice. It may end in tears, but the industry won’t ignore a $300 bln market.

Cox: Trump bump aside, U.S. stocks lag in 2017

30 Nov 2017

The president has unprecedentedly staked his political colors to the mast of rising equity prices, calling the S&P's rally a validation of his policies. Yet most other markets around the world have done even better. There are bigger forces at work than U.S. corporate tax rates.

Indian economy shaking off Modi’s shock therapy

30 Nov 2017

Growth of 6.3 pct last quarter suggests fallout from the premier's policy pileup is fading. He’s leading a bold drive to improve the way India is governed. Getting a few more things right, like the resolution of bad debt, is a precondition to turn this into a solid economic run.

Sexual misconduct will haunt 2018 annual reports

29 Nov 2017

This year brought revelations of companies using shareholder bounty to settle allegations male executives harassed and made unwanted advances on mostly female workers. In the coming proxy season, expect investor proposals pushing for greater disclosure and action on the issue.

Cox: Amazon to become biggest impact investor ever

16 Nov 2017

Jeff Bezos' $550 billion creation has become a Shiva-like force, threatening whole swaths of the retail industry and its jobs, while paying a relative pittance in taxes. By choosing a second HQ in 2018 where it's needed most the company can forestall a social and state backlash.

Hadas: Unintended consequences may be new normal

15 Nov 2017

From Brexit to Donald Trump to Saudi Arabia, the world is full of surprises. But those cheering wrenching change may face further upsets. The UK rejoins the EU, the U.S. president discredits small government, and Saudis become poorer. The next shock may be the rise of dullness.

Banks walk on eggshells in post-MiFID II world

7 Nov 2017

An EU ban on providing free research comes into force on Jan. 3 next year. Instead of bundling the cost together with trading fees, lenders will have to charge separately. Breakingviews imagines how a bank’s compliance department might finesse the issue with clients come Jan. 4.

Time for Barclays to sever its U.S. cards arm

10 Oct 2017

CEO Jes Staley has a conundrum: the UK bank’s market value is so depressed investors are essentially getting the U.S. credit card business for free, according to Breakingviews calculations. Spinning off the unit would make Barclays less complex and help it to a richer valuation.