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For the second time in less than three years, the Bank of England has made an emergency intervention in the market for UK government bonds. Investors rushed to liquidate assets, including money market funds which held UK government bonds. The latest intervention was triggered by excessive leverage in UK pension funds, which had borrowed to boost returns using a strategy known as liability-driven investing (LDI). To prevent future blow-ups, regulators could cap money market funds’ exposure to less liquid assets, reducing the risk of a run by investors. Financial market regulators in European fund centres like Ireland and Luxembourg have stepped up surveillance of LDI strategies used by UK pension funds, the Financial Times reported on Oct. 28.

☆ Primark’s price freeze is risky inflation gambit
▼ + stars: | 2022-11-08 | by ( ) www.reuters.com time to read: +2 min

LONDON, Nov 8 (Reuters Breakingviews) - Primark is breaking with the pack to navigate soaring inflation. Its largest rival Inditex (ITX.MC), owner of Zara, is taking a different approach by hiking prices over the next year. AB Foods Chief Executive George Weston appears to be willing to sacrifice Primark’s near 10% operating margin to keep price-sensitive customers happy. Assume inflation shaves almost 3 percentage points off the retail unit’s operating margin next year, taking it down to 7%. The 4% bump in AB Foods’ share price on Tuesday suggests investors reckon the plan may work.

The respective chief executives of $139 billion Philip Morris International (PM.N) and $95 billion Rio Tinto (RIO.L) are attempting takeovers that are central to their strategies. Olczak, who needs 90% of shareholders to accept in order to automatically de-list the company, initially faced opposition to his $16 billion offer. The mining giant asked for the postponement at the request of Quebec’s financial regulator, Turquoise Hill said. Two key investors in Turquoise Hill have agreed to withhold their votes on the bid, with their final deal dependent on Canadian arbitration. Turquoise Hill shares closed at C$41.6 on Nov. 4.

☆ Tom Ford return offers remedy for Gucci fatigue
▼ + stars: | 2022-11-04 | by ( Lisa Jucca | ) www.reuters.com time to read: +3 min

MILAN, Nov 4 (Reuters Breakingviews) - Tom Ford’s return to the realm of Gucci owner Kering (PRTP.PA) would add some much-needed sparkle. Bringing Tom Ford himself on board could even help revitalise it. Tom Ford offers diversification at a reasonable valuation. Sales of Tom Ford Beauty’s cosmetics and fragrances grew at a double digit rate in the third quarter, according to Vogue Business. In August, the Wall Street Journal reported that beauty giant Estée Lauder was looking to buy Tom Ford for $3 billion.

☆ Elon Musk’s $44 bln Twitter challenge begins: podcast
▼ + stars: | 2022-11-03 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Nov 3 (Reuters Breakingviews) - The Tesla boss is now the proud owner of the social media platform. In this Viewsroom podcast, Breakingviews columnists discuss the billionaire’s plans to boost revenue, the implications for the electric carmaker’s shareholders, and what the saga tells us about mega-deals. Listen to the podcastFollow @aimeedonnellan on TwitterEditing by Thomas Shum and Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Maersk recession pain could yet get more acute
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +2 min

Moller Maersk (MAERSKb.CO) is experiencing the dark side of relief in the world’s recovering supply chains. They have now fallen below $4,000, and a recession could drive them down further. Falling freight rates and volumes could encourage Maersk’s clients, who have flexible contracts, to scale back on their shipping orders. The clients can then buy up freight contracts in the open market, which are cheaper than contracts signed months ago. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ NatWest shows bank investors were right to fret
▼ + stars: | 2022-10-28 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 28 (Reuters Breakingviews) - Investor scepticism in bank stocks might seem a bit odd. After all, rising interest rates mean banks can make a fatter margin on loans, and unemployment levels are low, which suggests customers will keep paying their mortgages. Investors already valued NatWest at only 0.8 times its tangible book value, and Friday’s 8% share price fall will push that down further. The bank, still 48% owned by the UK government after a 2008 bailout, is expected to deliver a 13% return on tangible equity next year, RBC analysts reckon. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Adidas’s Kanye West bet is still in credit: podcast
▼ + stars: | 2022-10-27 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Oct 27 (Reuters Breakingviews) - The 18 bln euro sportswear maker severed ties with the musician over offensive comments. In this Viewsroom podcast, Breakingviews columnists discuss how the financial benefits to Adidas nevertheless outweighed the costs. That may spur other brands to pursue outspoken stars. Listen to the podcastFollow @aimeedonnellan on TwitterEditing by Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Sneaker pile-up will spoil Adidas’ Christmas party
▼ + stars: | 2022-10-21 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 21 (Reuters Breakingviews) - Adidas (ADSGn.DE) Chief Executive Kasper Rorsted has miscalculated shoppers’ appetite for casualwear. Weak sales have left Adidas with a pile of unsold sneakers at the worst possible time. Inflation, running at 10.9% in the European Union, is rapidly eroding consumers’ disposable income, spreading pain in the sportswear market. Christmas would typically be a time when retailers can claw back losses by selling their wares at full cost. Yet Adidas’ woes suggest sports retailers are heading for a discount party.

☆ Grocery deal could have European interloper
▼ + stars: | 2022-10-20 | by ( Aimee Donnellan | ) www.reuters.com time to read: +4 min

LONDON, Oct 20 (Reuters Breakingviews) - Good luck to Kroger and Albertsons (ACI.N) – U.S. lawmakers are already getting concerned about a deal. A European interloper could make deal plans even harder. If investors reckoned there was merit in a deal, Muller could also use equity to beef up the offer. So regulators wouldn’t have to worry about a larger Kroger shutting down competing Albertsons stores. Less overlap means fewer operational synergies, so a deal with Ahold might not look as lucrative.

☆ Britain’s bond crisis reverses over the government: podcast
▼ + stars: | 2022-10-20 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Oct 20 (Reuters Breakingviews) - New finance minister Jeremy Hunt has scrapped most of his predecessor’s unfunded tax cuts, scuppering Prime Minister Liz Truss’s growth plan. In this Viewsroom podcast, Breakingviews columnists debate what the U-turn means for markets – and whether Truss can survive. Listen to the podcastFollow @aimeedonnellan on TwitterRegister now for FREE unlimited access to Reuters.com RegisterEditing by Thomas Shum and Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Philip Morris’ Swedish bet may take multiple tokes
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 20 (Reuters Breakingviews) - Philip Morris International (PM.N) may need to show more flexibility. PMI Chief Executive Jacek Olczak has strengthened his hand by sealing a $2.7 billion deal with Altria to buy the rights to sell IQOS heated tobacco products in the United States, giving him an alternative way to grow in smokeless tobacco products. Still, it may be hard to get the Swedish Match deal over the line, given PMI’s ambitious 90% acceptance rate. That’s probably why the shares are currently trading close to the offer price at 112 crowns. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ SoftBank loses most from UK e-commerce flop
▼ + stars: | 2022-10-18 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 18 (Reuters Breakingviews) - SoftBank Group (9984.T) is seeing the ugly side of the beauty business. The Japanese technology investor on Monday said it had agreed to sell its stake in UK e-commerce group THG (THG.L) for a mere $35 million, compared with an acquisition price in 2021 of more than $540 million. SoftBank was an eager supporter of the one-time tech darling. Investors once thought SoftBank and Son could effectively anoint sector winners by offering them seemingly limitless funding. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Elon Musk’s second run at his $44 bln Twitter deal: podcast
▼ + stars: | 2022-10-13 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Oct 13 (Reuters Breakingviews) - A judge in Delaware has given the Tesla CEO until the end of the month to make good on his vow to buy the social media giant. In this Viewsroom podcast, Breakingviews columnists delve into the many twists of this M&A saga, Musk’s options, and what’s likely to happen next. Listen to the podcastFollow @aimeedonnellan on TwitterRegister now for FREE unlimited access to Reuters.com RegisterEditing by Thomas Shum and Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Lab tie-up would have multiple ailments
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 11 (Reuters Breakingviews) - Qiagen (QIA.DE) may once again find itself at the centre of an M&A drama. The $10 billion German lab tester is in talks with $10 billion U.S. life-science company Bio-Rad (BIO.N), the Wall Street Journal reported on Monday. Any deal would follow Thermo Fisher Scientific’s (TMO.N) failed attempt to buy Qiagen for 11.3 billion euros ($11 billion) back in 2020. Regulators in the United States and Europe have been increasingly wary of tie-ups that could lead to higher prices. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ BoE’s insurance policy raises question of next act
▼ + stars: | 2022-10-10 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 10 (Reuters Breakingviews) - The Bank of England is taking out insurance against a market meltdown. On Monday, the central bank said it was ready to double the daily limit of its bond-buying programme from 5 billion pounds to 10 billion pounds. This will cost users just 15 basis points above the base rate, although they face haircuts of up to 42%. (By Aimee Donnellan)Register now for FREE unlimited access to Reuters.com RegisterFollow @Breakingviews on Twitter(The author is a Reuters Breakingviews columnist. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ What to expect from China’s Party Congress: podcast
▼ + stars: | 2022-10-06 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Oct 6 (Reuters Breakingviews) - This month’s quinquennial meeting will shed some light on President Xi Jinping’s policy priorities amid a slowing economy and Covid lockdowns. In this Viewsroom podcast, Breakingviews columnists offer pointers on what to watch for from this staged but critical political event. Listen to the podcastFollow @aimeedonnellan on Twitter(The host is a Reuters Breakingviews columnist. Register now for FREE unlimited access to Reuters.com RegisterEditing by Thomas ShumOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Pension fund blowup faces brutal second act
▼ + stars: | 2022-10-06 | by ( Aimee Donnellan | ) www.reuters.com time to read: +5 min

The Bank of England announced a 65 billion pound gilt-buying scheme to stabilise markets and rescue pension funds. Bailey’s move may have been too late to stop some pension funds from having to close out their hedges, like interest rate swaps or futures. The rate at which retirement payments are discounted will also fall, pushing up the pension fund’s future liabilities, but without a corresponding asset gain. Meanwhile, investors like Goldman Sachs are hoovering up cut-price stakes in private equity vehicles, which LDI funds are selling. They also held 78 billion pounds and 317 billion pounds in property and equities respectively.

Yet the government’s unfunded mini-budget on Sept. 23 stoked fears of runaway inflation, causing gilt yields to soar. The mess left pension funds scrambling to raise margin, and they wound up doing so by selling their most liquid asset – gilts. And the more the pension funds sold, the more gilt prices fell, causing a vicious spiral and fears the funds could run out of cash. By the time Governor Andrew Bailey intervened, certain pension funds had been hit with margin calls as high as 100 million pounds. Ahead of the BoE’s announcement, strategists said the 2.1 trillion pound gilt market was seizing up, with very poor liquidity and pricing quality being a clear sign of market dysfunction.

☆ Behind Britain’s self-inflicted financial crisis: podcast
▼ + stars: | 2022-09-28 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Sept 28 (Reuters Breakingviews) - Sterling fell to a record low and gilt yields soared after finance minister Kwasi Kwarteng unveiled a raft of unfunded tax cuts. In this Viewsroom podcast, Breakingviews columnists explain the long-term damage to the UK’s credibility and what will rebuild investors’ confidence. Listen to the podcastFollow @aimeedonnellan on TwitterRegister now for FREE unlimited access to Reuters.com RegisterEditing by Oliver Taslic and Streisand NetoOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ EasyJet gives carbon offset reform a handy shove
▼ + stars: | 2022-09-27 | by ( ) www.reuters.com time to read: +2 min

An EasyJet Airbus aircraft takes off from the southern runway at Gatwick Airport in Crawley, Britain, August 25, 2021. REUTERS/Peter NichollsLONDON, Sept 27 (Reuters Breakingviews) - EasyJet’s (EZJ.L) latest statement on climate change may end up being quite useful. Chief Executive Johan Lundgren’s stance reflects a burgeoning trend which has seen regulators and industry groups move from setting net zero targets to scrutinising them. EasyJet will instead invest in new technology to cut emissions, including zero carbon-emitting aircraft and carbon capture technology. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Silicon Valley’s post-Covid brain drain: podcast
▼ + stars: | 2022-09-27 | by ( Aimee Donnellan | ) www.reuters.com time to read: +1 min

Steve Case, chairman and CEO of Revolution, speaks during the SALT conference in Manhattan, New York City, U.S., September 13, 2022. REUTERS/David 'Dee' DelgadoLONDON, Sept 27 (Reuters Breakingviews) - Before the pandemic, 75% of venture capital was invested in California, New York and Massachusetts. In this Exchange podcast, AOL co-founder Steve Case explains that a hybrid working revolution is reversing that trend and encouraging permanent investment away from the coasts. Register now for FREE unlimited access to Reuters.com RegisterEditing by Thomas Shum and Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Breakingviews: UK growth requires an even less popular Liz Truss
▼ + stars: | 2022-09-23 | by ( Aimee Donnellan | ) www.reuters.com time to read: +4 min

LONDON, Sept 23 (Reuters Breakingviews) - In her early days as prime minister, Liz Truss has had two mantras. As expected, Kwarteng reversed a planned hike in national insurance rates, costing around 17 billion pounds per year. The whole package will cost 45 billion pounds by 2027, while the government is also spending 60 billion pounds capping household and business energy bills. Support for household energy bills announced by Truss will cost 60 billion pounds for the next six months, Kwarteng said. Tax cuts would cost a further 45 billion pounds by 2026-2027, according to UK finance ministry costings.

☆ Italy’s first female leader, Amazon’s monopoly: podcast
▼ + stars: | 2022-09-22 | by ( Aimee Donnellan | ) www.reuters.com time to read: +1 min

Giorgia Meloni, leader of the far-right Brothers of Italy party, speaks during a rally in Duomo square ahead of the Sept. 25 snap election, in Milan, Italy, September 11, 2022. REUTERS/Flavio Lo ScalzoLONDON, Sept 22 (Reuters Breakingviews) - Far-right leader Giorgia Meloni is favourite to become prime minister after Sunday’s election. In this Viewsroom podcast, Breakingviews columnists debate how she will handle Rome’s debt, which is expected to reach 148% of GDP. Listen to the podcastFollow @aimeedonnellan on TwitterRegister now for FREE unlimited access to Reuters.com RegisterEditing by Sharon Lam and Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Novartis’ growth ills lay tricky treatment pathway
▼ + stars: | 2022-09-22 | by ( ) www.reuters.com time to read: +2 min

LONDON, Sept 22 (Reuters Breakingviews) - Novartis (NOVN.S) is facing a prolonged period in recovery. On Thursday, the $187 billion Swiss drugmaker said it will make expansion in the U.S. market a top priority as it seeks to boost its lacklustre growth. He will also spin off its generic drug business next year and list it on the Swiss stock exchange. Strip that away from Novartis’ current enterprise value of $196 billion and the core drugs business is valued at around $167 billion. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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