Predictions 2020

Sustainable investing will wind up in the dock

31 Dec 2019

Around $31 trln of assets under management now include some kind of environmental, social or governance factor. But there’s widespread confusion over definitions. That leaves the market open to egregious mis-selling and fraud. A scandal is likely sooner rather than later.

American election to test Wall Street’s nerves

30 Dec 2019

Whoever wins the White House in November matters more to masters of finance than 2016’s cliff-hanger if it boils down to a choice between Trump’s trade war and an assault on wealth. Breakingviews imagines a conversation among bankers at Park Avenue’s Racquet and Tennis Club.

Private credit pioneers will face a stress test

30 Dec 2019

A weak economy, high debt and falling profits should mean more corporate defaults in 2020. The pain will fall particularly on lenders specialising in private loans, who have $278 billion of assets under management. Rising losses will sort the sheep from the goats.

Wealth managers will inflate superprime bubble

30 Dec 2019

Over a decade ago loans to subprime homebuyers blew up the financial system. Now UBS and others are cranking up credit to the uber rich. Lending against unlisted stocks or art collections brings risk. It’s still safer than helping the wealthy launder money or dodge taxes.

Soccer giant will field Chinese star to kick sales

30 Dec 2019

Super-clubs like Manchester United and Real Madrid need new revenue streams as growth from the traditional pay-TV cash cow slows. In 2020, a top team will look to boost merchandise and sponsorships in a huge market by fielding a sub-par Middle Kingdom athlete.

How our 2019 predictions played out

27 Dec 2019

As Breakingviews publishes its columnists’ prognostications for next year, we look back at the previous crop. We had some bloopers – not least on GE, the ECB and Tesla. But we also hit some on the nose, from SoftBank write-downs to Argentina’s president being voted out of office.

Direct listings will move nearer IPOs – and Europe

27 Dec 2019

After Spotify and Slack’s non-standard floats in 2018 and 2019, respectively, expect more direct listings in the United States in the year ahead. The method could start borrowing more features from traditional IPOs, and the whole notion may jump across the Atlantic too.

Turkey set for good year before economic reckoning

27 Dec 2019

More fiscal and central bank stimulus will push growth towards President Tayyip Erdogan’s 5% goal for 2020. Yet inflation will be restrained thanks to lira stability. A credit binge encouraged by Ankara’s policies can last the better part of a year before screeching to a halt.

Beijing will dilute Hong Kong with Shenzhen

27 Dec 2019

Protests in the former British colony endanger China’s gateway to international markets. Past attempts to turn neighbouring Shenzhen into a rival financial hub have been half-hearted. Now Beijing has reason to press harder, especially with bold reform to capital controls.

LatAm leaders will be trapped in vicious cycle

26 Dec 2019

Protests across the region will make growth even lousier in 2020, which in turn will make people even angrier. The presidents of Chile and Ecuador are most exposed. Expect them to water down reforms in a bid to stay in office. Whether it works or not, their economies will suffer.

Team Trump will steal Warren’s tech thunder

26 Dec 2019

The Democratic presidential candidate has made breaking up Silicon Valley giants like Facebook and Amazon a key part of her campaign. But the White House could use a recent antitrust probe to make the case first, and effectively mute much of Warren’s roar.

It’s the suburbs, not the economy, stupid

24 Dec 2019

Most Americans like President Trump’s handling of the economy, which would normally bode well for re-election in November. But his overall approval rating is just 46%. That’ll shift the fight to healthcare and other issues, while handing moderate suburbanites a deciding voice.

SoftBank’s softly, softly approach will spur M&A

24 Dec 2019

Masayoshi Son will take a more cautious approach to backing multibillion-dollar startups next year. Those with a long path to profitability can only last so long without funds. Asia’s food delivery, ride-hailing and e-commerce stars could be first to cut their losses and merge.

Buy now, pay later faces Juul-style backlash

24 Dec 2019

Companies offering the credit innovation say it can drive online sales and help retailers deal with refunds. One player, Klarna, is valued at $5.5 bln. But making it a lot easier to shop for free could prompt a reaction like that which befell the vaping heavyweight.

China will get sideswiped by American ESG fervour

24 Dec 2019

There’s talk of delisting People’s Republic stocks from U.S. bourses and a proposal to block public pension funds from buying them. Concerns about human rights, audits and price swings are also being amplified. That feeds into the social-impact hype and will spark capital flight.

Tokyo brings home the Olympic gold in 2020

24 Dec 2019

Cities are often saddled with debt from hosting the games, and mismanagement has stretched from Montreal to Rio. Japan is setting new positive standards in sponsorship and sustainability, making medals from used phones. Add on short-term stimulus, and it can top the host podium.

Gaming’s strongest opponent will be regulation

23 Dec 2019

New Microsoft and Sony consoles come out in 2020. Apple and Google want to be the Netflix of online play, and game makers like Activision Blizzard, Epic and EA hold a strong hand. But tighter scrutiny of gambling-style digital prizes will temper the $130 bln industry’s growth.

BlackRock is Wall Street’s object of fantasy M&A

23 Dec 2019

Investment banks are paid to be creative by concocting deals that help clients meet their strategic imperatives. But financiers like Goldman Sachs and Blackstone, too, could use some of their own advice. The $76 bln investment behemoth might one day play into their pitchbooks.

Peak subscription economy approaches in 2020

23 Dec 2019

It’s not just streaming services from Disney and Apple that are competing for steadily paying subscribers. Online banks, wine sellers and even furniture retailers want them, too. Buyers can only spend and consume so much, though. For many vendors, the summit will be beyond reach.

China’s e-yuan will be more cryptic than crypto

23 Dec 2019

Beijing is primed to launch the world's first digital sovereign currency in 2020. The rollout will give authorities a powerful tool to tackle fraud and money laundering. Deploying the breakout innovation into the wheeling-dealing banking system could also aid a cleanup.