Predictions 2020

Asia Pacific is primed for its next 11-digit LBO

23 Dec 2019

Over $250 bln of private equity money is sloshing around the region, as a new KKR fund looks set to exceed its flagship U.S. one. Cheap debt helps put another Toshiba-like deal in the frame. Dentsu and Haier fit the buyout profile. Even whoppers like Woolworths could be targeted.

Jack Dorsey adds third job as anti-Facebook hero

20 Dec 2019

The awkward Twitter boss banned political ads and did more than Mark Zuckerberg’s social network to prevent the silencing of Hong Kong protesters. Dorsey, also CEO of Square, fared surprisingly well in D.C. hearings, too. His style will put heat on rivals as U.S. elections loom.

Margrethe Vestager will open tech’s walled garden

20 Dec 2019

The European antitrust chief’s multibillion-dollar fines had little impact on the 12-digit market values of Google, Facebook and others. She will weaken their grip on the internet more effectively in 2020 by imposing common standards that allow seamless use of rival platforms.

Tencent is next in Western cross-hairs

20 Dec 2019

The WeChat app, indispensable to life and business in the People's Republic, is due unwanted foreign attention. Beijing uses the Tencent tool to influence and monitor users at home and abroad. Debate over restraining it will test democracies’ commitment to free information flow.

China swaps its poor for the merely miserable

20 Dec 2019

Beijing will hit its 2020 target of doubling disposable incomes and GDP in 10 years, while eliminating extreme poverty. That’s laudable, but forcing breakneck growth exacerbated inequality, while consumer debt ballooned. Political and financial risks are higher as a result.

Viewsroom: Jack Dorsey’s heroic year ahead

19 Dec 2019

From banning political ads to developing cryptocurrency plans, the CEO of Twitter and Square has been politically more astute than rivals like Facebook. That sets him up for a good 2020. Also: the different ways that shareholders, the Fed and M&A bankers will tackle climate risk.

Disney will lose its magic touch

19 Dec 2019

The media giant’s valuation has soared on high hopes for its Netflix-like streaming service Disney+. While rivals have struggled, boss Bob Iger has seldom put a foot wrong. Expectations are now so high that meeting them will take a different sort of sorcery.

Buyout barons’ debt machine will blow a gasket

19 Dec 2019

The $1 trln market for bonds backed by leveraged loans has fuelled the boom in private-equity dealmaking. A weaker economy will make investors wary of buying these so-called CLOs, and force vehicles to curb lending. That means higher borrowing costs, and probably fewer takeovers.

M&A bankers will turn climate risk into clients

19 Dec 2019

The financial impact of global warming is one of the biggest strategic issues CEOs face, yet it plays a small role in dealmaking. That might change in 2020 as shifting regulation and consumer habits start to affect the bottom line, giving climate-conscious advisers an edge.

Italy and Germany will unite on EU tech taxes

19 Dec 2019

New European Commission chief Ursula von der Leyen will struggle to persuade Rome and Berlin to compromise over much-needed euro zone banking reforms. Her best bet is to pick another battle. A levy on technology giants’ revenue may help the EU rivals find some common ground.

Investors will rue their Hong Kong risk appetite

19 Dec 2019

The city’s stocks have lagged the S&P 500 since violent protests started in June. Yet the slide has been less severe than during the Asian financial crisis or the SARS outbreak. Local unrest, trade tensions and a U.S. market reversal should prompt some overdue reconsideration.

Jay Powell has golden chance to avow independence

18 Dec 2019

The Fed boss can distance himself from President Donald Trump by nudging the U.S. central bank to join a global green network that already includes 51 peers. This will defuse criticism that he has been too malleable on rates. And it may even help to save the planet from frying.

Green laggards face war on multiple fronts

18 Dec 2019

Businesses slow to react to the impact of climate change have so far got off lightly. In 2020, investors will broaden their activism and target passive funds, too. Meanwhile, some governments may impose stricter measures, and more valuation clarity will wake up short sellers.

Aramco’s next stop will be bond, not stock, market

18 Dec 2019

Despite raising $25.6 bln from listing 1.5% of Saudi Aramco, Riyadh will want to flog more. But even if it can find a friendly foreign wealth fund, Saudi might still have to cut the price. An easier path would be to load Aramco up with debt and pay itself a fat special dividend.

The hottest new car model is a Daimler-BMW deal

18 Dec 2019

The German giants want to save a combined 13 bln euros to fund the pricey transition to electric cars. But crunching together could yield synergies worth more than three times that. The Fiat-Peugeot playbook will be scrutinised heavily in Stuttgart and Munich in the year ahead.

Taiwan will widen U.S.-China schism in 2020

18 Dec 2019

The island's significance in supply chains stands to grow as manufacturing shifts accelerate. Anti-Beijing sentiment is also gaining traction in the United States. Both dynamics herald deeper ties between Taipei and Washington, bolstering the case for a controversial trade deal.

Boeing 737 MAX cuts will speed margins descent

16 Dec 2019

Limited competition has insulated the $185 bln aircraft maker’s shares from the long grounding. The plane may fly again soon, but investors and CEO Dennis Muilenburg expect rising profitability. Newly zealous regulators, overstretched staff and economic winds say otherwise.

LVMH’s Tiffany swoop will trigger bling reprisal

13 Dec 2019

Bernard Arnault’s $230 bln luxury giant is racing ahead of its peers. But they won’t stand still. Kering will use M&A to cure its Gucci habit. Cartier-owner Richemont offers a better fit than possible target Moncler, provided the two can solve significant governance hurdles.

Johnson’s big win unlocks Brexit black box

12 Dec 2019

The UK’s Conservative Party has won a large parliamentary majority. That means Britain leaves the European Union, and gives the prime minister room to compromise on a quick trade deal. Stocks and the pound have bounced. Johnson’s broader policy ambitions remain a mystery.

ECB feuding will have a new front in coming year

11 Dec 2019

Christine Lagarde took the helm of the European Central Bank with a promise to review strategy. A debate on how to define its price stability mandate will embolden those rate setters who are fed up of ultra-loose policies. The battle will be bitter and played out in public.