Neil Unmack
ReutersBreakingviews
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Past articles by Neil:
UK fund manager picks canny time to do right thing – Breakingviews
The $10 bln Schroders is ditching its non-voting shares. A 37% discount to the voting stock helps smooth a deal without its dominant family losing out too much either. It’s a timely corrective to UK Chancellor Rishi Sunak’s efforts to lure more dual-share structures to London. → Read More
Porsche IPO is slow road to a higher VW valuation – Breakingviews
The German carmaker’s luxury brand could easily be worth 90 bln euros. Yet a plan to only sell 25% may limit the benefit for shareholders by leaving the company with a small free float and complex governance. Their consolation is that this listing may not be the final model. → Read More
EU greenwashing fix gets off to dodgy start – Breakingviews
Some 4 trln euros of funds are now deemed sustainable under European disclosure rules governing ESG investing. Yet the EU yardstick for such a definition is vaguer than for some private sector players. At the very least this is confusing; at most it actually aids greenwashing. → Read More
Draghi’s bond-buying triumph lacks obvious sequel – Breakingviews
The ECB’s plans to tighten monetary policy and the Ukraine war revive fears that weak euro zone members’ borrowing costs will soar. Though the former central bank boss tamed debt spreads in 2012, a repeat is tricky. Besides, governments that struggle can use tools Draghi devised. → Read More
Gas guzzlers face reckoning from Ukraine shock – Breakingviews
Prices of raw materials and fuel have soared after the Russian invasion. That could push drivers to swap big cars like the Jeep Wrangler for more energy-efficient rides. With big vehicles currently bringing in roughly half of sales, that’s a problem for the $4 trln auto industry. → Read More
Russian debt coin toss will get harder to call – Breakingviews
Gazprom and Rosneft are repaying bonds despite fears Moscow may renege on its own debt. The depressed prices of Russian corporate debt mean investors who rightly bet on repayment can double their money. Yet rising tensions and murky workouts mean the trade will get riskier. → Read More
Western curbs give Moscow rational default card – Breakingviews
Sanctions mean President Vladimir Putin has reason not to repay at least some of his $200 bln of debt, and less fear of the consequences. That would leave creditors stuck for years, with little hope of a recovery. Even depressed prices of Russian bonds may prove optimistic. → Read More
Amundi’s mini-BlackRock status comes with a catch – Breakingviews
The French fund powerhouse now has 2 trln euros of assets, and is in fast-growing areas like passives and ESG. Yet Amundi’s strength in selling funds partly relies on its bank partners’ loyalty, which might change. That weakness helps explain a less-than-stellar stock price. → Read More
New Bank of England guessing game begins – Breakingviews
A second rate rise in as many months raises the question of how quickly Governor Andrew Bailey will reduce bond holdings accumulated during the pandemic. A gradual approach won’t cause economic or market pain. But debt yields will become more volatile once the Fed follows suit. → Read More
ESG fervour is weathering its first big storm – Breakingviews
Despite a U.S. greenwashing probe, Germany’s 7 bln euro asset manager DWS is seeing further green inflows. Investors’ zeal for funds that tick ethical boxes is outdoing concerns about their fine print and performance relative to dirty funds. Yet the worries aren’t going away. → Read More
Larry Fink’s pragmatism is awkward but lucrative – Breakingviews
The BlackRock CEO rejected criticisms that stakeholder capitalism is “woke”, while backing natural gas. The danger for Fink is that he occupies a no man’s land position on culture war hot topics. His consolation is that $10 trln of assets suggest investors are down with that. → Read More
Central banks will give risky debt a helpful shock – Breakingviews
Benchmark bond yields are rising as rate-setters around the world scale back asset purchases. That will reduce the appeal of corporate debt, but a correction in credit markets is nothing to fear. A setback may lead to less hazardous terms for bondholders, and a rout is unlikely. → Read More
Combustion engines are carmakers’ toxic assets – Breakingviews
The likes of Volkswagen and GM are shifting to battery vehicles while petrol-powered rides die out. Engine units are a drag on valuations, like lenders’ ropey assets after the 2008 crisis. Hiving them off into a “bad bank” would please investors and generate much-needed savings. → Read More
Porsche IPO may only partly aid VW’s odd valuation – Breakingviews
Volkswagen could finally list its luxury marque. Porsche may be worth up to 100 bln euros or more, making VW’s own $150 bln valuation look underpowered. The value assigned to both, however, may depend on how much control VW is prepared to give up. → Read More
VW’s CEO soap opera is darker than Tesla’s – Breakingviews
Herbert Diess is likely to stay as the German carmaker’s boss but with wings clipped after a clash with unions. His ambitious battery plans make Volkswagen a more credible rival to Elon Musk’s firm. Unlike the Tesla founder’s antics, its leadership dramas reflect deep challenges. → Read More
Bruised UK fund manager throws pricey counterpunch – Breakingviews
After years of struggling to hang onto assets, Abrdn is buying consumer platform Interactive Investor for 1.5 bln pounds. It brings growth and a chance to steal share in personal savings. The challenge is ensuring its expensive new bauble shines inside a stodgy asset manager. → Read More
Bondholders are biggest losers in telco LBO frenzy – Breakingviews
Telecom Italia’s bonds fell on fears that the securities may not be redeemed if KKR’s $37 bln buyout succeeds. The M&A boom has made unexpected targets of large public companies. Even when investors enjoy stronger protections, as with UK rival BT, these offer limited solace. → Read More
Ericsson makes puzzling $6.2 bln ascent into cloud – Breakingviews
That’s how much the Swedish telecom kit maker is paying for web-based communications firm Vonage. With few cost savings on offer CEO Börje Ekholm will take years to generate a decent return. Moving into a fast-growing but ultra-competitive sector highlights his need to diversify. → Read More
Glasgow’s carbon market overhaul is only half done – Breakingviews
The U.N.’s COP26 summit agreed tougher accounting standards for emissions credits, a market ex-BoE Governor Mark Carney hopes can swell to $100 bln a year. It’s a step forward, but loopholes remain. Companies that don’t like greenwashing have a strong incentive to help police it. → Read More
Carmakers muddy private sector’s COP green sheen – Breakingviews
Volkswagen and peers have snubbed a Glasgow pledge to end petrol vehicle sales by 2040. Banks’ net-zero promises last week suggested companies might offset inadequate state action. The carmaker rebuff is a reminder that governments still have their hands very much on the wheel. → Read More