Predictions 2019

Tencent will become world e-sports champion

27 Dec 2018

The global $1 bln competitive video-game market will reach a new level in 2019. As audiences for “League of Legends” tournaments pull even with the NFL, ad revenue will post explosive growth. That will fund Tencent’s expansion of its overseas franchise.

A Trump versus Xi wrestling match might just help

26 Dec 2018

Maybe not a real one. But Tencent could tag-team with WWE to build Chinese versions of Triple H and The Undertaker, and vent a bit of trade tension. The $370 bln tech giant would make a burly partner; Tencent would score a PR coup, plus Trump access via co-founder Linda McMahon.

Overleveraged AT&T is a magnet for activists

26 Dec 2018

Boss Randall Stephenson has piled on over $180 bln of debt to add entertainment to the U.S. telco’s core business. It’s a risky strategy, and any missteps could make AT&T look a bit like fallen icon General Electric. Breakingviews imagines a missive from a restive shareholder.

Disruption will be the mother of M&A in 2019

26 Dec 2018

Technological change will bring creative dealmaking – think Altria’s $13 bln investment in vaping outfit Juul. U.S. companies have cash, and buying into the new economy may beat building. The risk is the advertising problem: at least half the money may be wasted.

Ghosts of Argentine past will come for Macri’s job

26 Dec 2018

The pro-business president has had to seek IMF help as he tries to steer Latin America’s No. 3 economy to health. That’s a gift to his discredited Peronist opponents. Recovery from drought and currency collapse may come too late to prevent the return of the spendthrifts of yore.

Wellness programs and waists spread together

24 Dec 2018

Most U.S. companies subsidize everything from fitness trackers to yoga classes for employees. Yet evidence shows these regimes do little to keep workers fit. It’s other benefits, such as curbing healthcare costs and attracting talent, that will keep the wellness craze going.

Financing drought cracks farmers’ loyalty to Trump

24 Dec 2018

The U.S. president’s trade war has evaporated export markets for soy beans and other crops, leaving growers struggling even more than before. Yet they’re mostly sticking by Trump. If he can’t strike a good deal, farmers’ faith will erode when credit dries up for the next harvest.

Japan is stealth threat to 2019 market stability

24 Dec 2018

Governor Haruhiko Kuroda’s tiny tweaks to ultra-loose policy will agitate global asset prices more than the actions of his U.S. or euro zone peers. Higher domestic yields are set to lure Japanese money back from U.S. credit or European debt markets and the yen will be buoyant.

World will improve where it matters most in 2019

24 Dec 2018

By next December, more people will have electricity and clean water. Child deaths are likely to be rarer and education more common. In future years, the pace of gains could accelerate. The open question is whether progress will undermine prosperity by also bringing more conflict.

Jeff Bezos starts to resemble Sam Walton

21 Dec 2018

Amazon is selling shelf space, opening stores and launching catalogs. Old-school Walmart’s acquisitions of Jet.com and Flipkart are helping it challenge its rival’s online dominance. As the two retailers increasingly resemble each other, so too will their valuations.

Italian banks to bear populism’s burden next year

21 Dec 2018

Despite being stronger, lenders face another choppy ride in 2019. A strong League showing in the EU parliament will embolden leader Matteo Salvini to seek fresh elections, rekindling Quitaly risk. Breakingviews imagines a WhatsApp chat between a U.S. investor and Italian dealer.

Asia’s beauty giants will apply a Western gloss

21 Dec 2018

J&J, Unilever and others have splashed out on cutting-edge cosmetics in Japan and South Korea. They want innovation, plus clout in China. Yet locals like Shiseido and snail mask supremo Amorepacific have cash and room to grow outside the region. They can reverse the M&A trend.

Sony’s turnaround will be an activist casting call

21 Dec 2018

Boss Kenichiro Yoshida has boosted earnings at the $61 bln movies-to-video-games group. But he needs to shed a loss-making handset unit and spin off the chip business, among other things. The Japanese company's reluctance to act will see hedge funds make a cameo in Sony's remake.

Viewsroom: Dealing in high anxiety

20 Dec 2018

Equity valuations are in the stratosphere and geopolitical risk is running hot. Breakingviews columnists predict how that’ll affect markets in 2019, from trade-war fallout to Indian privatizations, a Deutsche Bank rally and mining M&A. They also assess last year’s prognostications.

Doomsday just another opportunity to create alpha

20 Dec 2018

From grid hacking to financial meltdown, new fears about a systemic disaster are generating ideas about fortifying for the worst. Demand for gym memberships, canned soup, and gold will all rise. Here’s how to indulge in the nervousness.

Rio will turn big miners back into big spenders

20 Dec 2018

Despite fat cash piles, mining groups have been slow to acquire. With new projects costly and demand high, copper was already a good strategic bet even before trade war jitters caused a price slump in 2018. Expect Rio Tinto to come calling for $15 bln U.S. rival Freeport.

East Africa will buck global great rift trend

20 Dec 2018

Twenty-five years after genocide, Rwanda’s economy is motoring sufficiently to need new markets. The potential inclusion of Ethiopia would make East Africa a single market of 250 million people. If it prospers, it would provide a useful counterpoint to global balkanisation.

China can afford some pipe dreams in 2019

20 Dec 2018

After years of speculation, Beijing will finally push behemoths like $200 bln PetroChina to spin off their pipelines next year. Allowing those oil and gas networks to run independently opens the field up to smaller competitors. It’s a major step towards energy market reform.

Scooters will soon find city-friendly sweet spot

19 Dec 2018

They're tech toys that clog up streets and sidewalks. Yet they are also a clean, low-cost bridge between cars or mass transit and walking. The Bird CEO talks about sharing the cost of infrastructure. That could be a way forward, as long as the business model can stand it.

How low can private equity returns go?

19 Dec 2018

Buyout shops target a 15 percent return, but 5 percent could be the new normal. Here's how a five-year deal could measure up.