Corporate Financier’s Notes by Aivars Jurcans
Done! And Done
SIX, a Swiss financial infrastructure group, has sold a 6% stake in Worldline, a payments company, for EUR 675 million. SIX intends to use the proceeds from the sale to help finance the all-cash EUR 2.8 billion acquisition of Bolsas y Mercados Espanoles (BME), a Spanish exchange operator.
Gojek, an Indonesian ride-hailing and food delivery company, has acquired Moka, a Jakarta-based mobile point-of-sale startup, for about USD 130 million. Moka provides POS and payments services to owners of more than 35,000 restaurants, coffee shops and retail outlets in more than 100 cities across Indonesia.
Deals On The Table
IDFC First Bank, an Indian private-sector lender, is said to be considering a USD 200 million share sale to bolster its capital.
Travelex, a currency service provider, is said to have put itself up for sale. The company became the target of a ransomware attack in December 2019 that could lead to an estimated GBP 25 million hit to its Q1 2020 underlying core earnings.
Thanks, But No Deal
Amundi, a French asset manager, is said not to be interested in taking over Anima Holding, a smaller Italian rival. Anima is the largest independent asset management group in the country with about EUR 186 billion in assets under management and more than 1 million customers..
Calm And Confident
Assicurazioni Generali, an Italian insurer, is said to be “confident of being able to rebuff a potential takeover bid thanks to a “solid” group of core domestic shareholders and a strong capital and financial position”. It has been speculated earlier that Generali could become an acquisition target for larger rivals such as AXA and Zurich Insurance.
Metrics To Watch
Standard Chartered’s, an Asia-focused lender, return on tangible equity fell 100bps to 8.6% while its net interest margin decreased by 14bps to 1.52%.
HSBC’s return on tangible equity fell to 4.2% in Q1 2020, from 10.6% in Q1 2019. Its shares are trading at a price to tangible book value of 0.5x times.
When adjusted for special gains (selling a funds business plus some tax benefits from the state), Credit Suisse return on tangible equity in Q1 2020 falls back from a headline 13.1% to about 9.0%.
According to data from Goldman Sachs, the top 10 stocks in the S&P 500 this month accounted for roughly 27% of the total value of the index; the top 5 companies alone – Microsoft, Apple, Amazon, Alphabet and Facebook – account for 20% of the index.
An average person will use 10 social networks daily by 2023, up from 6 currently, according to Activate.
The companies and consumers flooded US banks with a record USD 1 trillion of deposits in Q1 2020, of which USD 590 billion went to the 4 biggest – JPMorgan Chase, Bank of America, Wells Fargo and Citigroup.
The 6 largest US banks have increased their loan provisions by a combined USD 25.4 billion – a year-on-year increase of 350%.
A Thought Worth Noting
“We are in the worst economic event that we have faced as a nation and globally since the Great Depression. The economy is shut down, The opening of the economy is going to take time, and it’s not going to happen in a smooth way. And no one knows for sure the share or size or duration.”
Evan Greenberg chief executive, Chubb
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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.