|Bid||199.38 x 900|
|Ask||199.45 x 900|
|Day's Range||196.53 - 199.88|
|52 Week Range||130.85 - 250.46|
|Beta (5Y Monthly)||1.47|
|PE Ratio (TTM)||10.56|
|Earnings Date||Oct 13, 2020 - Oct 19, 2020|
|Forward Dividend & Yield||5.00 (2.53%)|
|Ex-Dividend Date||Aug 31, 2020|
|1y Target Est||244.95|
Goldman Sachs BDC (GSBD) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
(Bloomberg Opinion) -- Call it Deal Tinder. Banker Bumble. Or, perhaps more on trend with the vowel-hating naming convention of startups, simply: Bnkr. That’s not the real name, but Wall Street is building a new dealmaking app for the future of mergers and acquisitions in a social-distanced world. After all, this weekend’s flurry of deal activity shows that not even the coronavirus can stifle M&A demand for long.As air travel remains taboo, and with working from home set to be the norm for corporate offices for the foreseeable future, bankers are looking for new technologies to help their clients find transactions remotely. The Covid-19 pandemic heralded the rise of Zoom Video Communications Inc. and other videoconferencing tools, which have already been used recently by Verizon Communications Inc. and Intel Corp. to negotiate acquisitions valued at hundreds of millions of dollars. Now, Goldman Sachs Group Inc. is building a merger matchmaking app for its investment-banking clients to further aid the process, Bloomberg’s Ed Hammond reports. The app’s real name is Gemini, building off a technology that the company uses internally. (In case Goldman’s rivals are curious, “Bnkr” is still up for grabs.) The Gemini news comes on the heels of a busy deals weekend as the M&A market starts to show more signs of life. Microsoft Corp. confirmed that it’s in talks to buy the U.S. side of TikTok as the Chinese-owned social-media sensation comes under scrutiny by the Trump administration. (Tim Culpan writes that it could be “the deal of the decade.”) Germany’s Siemens Healthineers AG struck a $16.4 billion deal to acquire Varian Medical Systems Inc., a Palo Alto, California-based maker of cancer-radiation treatments, with the expectation that demand for medical procedures put off by Covid will return. Private equity firms Blackstone Group Inc. and Global Infrastructure Partners are also considering a joint bid for Kansas City Southern, a railroad operator that links Mexico and the U.S. Midwest, in what would amount to a Warren Buffett-esque bet on the U.S. economy.Gone may be the days of a handshake sealing a deal, and M&A volume globally is still down 47% this year at just $1.1 trillion. But the pandemic hasn’t altered the reasons for pursuing transactions. Interest rates remain low amid a global recession triggered by virus fears, and a lack of organic growth continues to point to consolidation across industries. As companies become more comfortable with remote work, they may embrace technology for dealmaking, too.“The bankers are road warriors, but I think they’re learning quickly that they can get a lot more done this way,” Derek Koecher, Verizon’s vice president of strategy and development, said in a June interview conducted over the BlueJeans videoconferencing software. The wireless carrier acquired BlueJeans for $400 million in April to add to its offerings for business customers.While Verizon and BlueJeans executives were able to start their negotiations in person in pre-Covid times, once the pandemic hit they were forced to become their own guinea pigs. “That time that you get with the management team — the dinners, the drop-bys, the ‘Hey, I need to come out and see you, let’s have breakfast’ – were completely gone,” Koecher said. “One thing you worry about is culture. Are you going to have the right cultural fit with people you didn’t spend a lot of face-to-face time with? We used the platform to get that management time and intimacy. It was an experiment, and it proved to be quite successful.” No travel delays, and meetings were easier to schedule. There’s also a benefit to being able to literally peer into the other person’s background on screen, a window into their life outside the formal conference-room setting, he said. Goldman says its app will show how a business stacks up against various revenue and profit metrics, as well as environmental, social and governance standards. (By the way, the Bloomberg terminal can do a lot of that, too. Bloomberg LP is the parent of Bloomberg News and Bloomberg Opinion.) That may help CEOs spot vulnerabilities and merger or spinoff opportunities before activist investors come knocking.(2) With some inspiration from social-media tools, dealmaking lives on in the Covid era. Maybe even the swipe — the cultural touchstone of millennial dating that’s led to plenty of marriages — could broker mergers next. (1) There has already been a substantial uptick in the adoption of poison-pill defenses this year.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Goldman Sachs Group Inc. and Bank of America Corp. were left off Ant Group’s upcoming stock sale in Hong Kong because of their past work with rivals of its affiliate Alibaba, according to people familiar with the matter.Bankers have been told by senior executives at Alibaba Group Holding Ltd., which owns a third of Ant, that they should refrain from doing deals for its competitors if they want business from Jack Ma’s sprawling empire, the people said. Ant has kicked off plans to go public in Hong Kong and Shanghai in offerings that could top Saudi Aramco’s record $29 billion IPO.The directive shows that Wall Street banks are having to make early bets on which firms to stick with in China, especially as juggernauts like Alibaba and Tencent Holdings Ltd. extend their tentacles into hundreds of businesses in finance, transportation, retail and entertainment.“The duopoly issue is not unique to China, but the scale and scope of Alibaba and Tencent’s business operations create an excruciating dilemma for investment banks,” said Andy Mok, a senior research fellow at the Center for China and Globalization in Beijing. “Alibaba and Tencent’s businesses are so big, you can risk being blocked out of a significant future revenue stream.”While bankers everywhere have to be careful doing work for their clients’ rival firms, Chinese conglomerates are taking it to a new level. Even though banks have firewalls to ensure separate teams handle deals for the likes of Alibaba and Tencent, that’s proving to not be enough, the people familiar said.Chinese clients are much more likely than their counterparts in the U.S. or Europe to demand non-compete commitments as a show of loyalty, and to ensure that sensitive strategies don’t land in the hands of competitors. And with fewer deals to go around, bankers in the hyper-competitive Chinese market have little choice but to comply.Though minor distribution roles on Ant’s Hong Kong IPO are still up for grabs, those don’t offer the out-sized fees that banks can expect from leading the sale.“Competition has increased and Chinese issuers have gotten strong bargaining power,” said Bob Dodds, who worked as an investment banker at China International Capital Corp. before setting up DRP Capital Ltd. to advise on China-related deals.Goldman and Bank of America’s recent work with Alibaba rivals include $7.7 billion in stock sales for Tencent-backed Pinduoduo Inc. and JD.com Inc. in the last two years, helping these companies build their war chests to take on their larger competitor in the hotly contested e-commerce arena.The two banks have reaped at least $70 million from advising Pinduoduo and JD.com on stock deals, according to data compiled by Bloomberg. The figure doesn’t include the undisclosed fees of a $1 billion bond sale by Pinduoduo in September and the $4.5 billion secondary listing by JD.com in June.Representatives at Goldman and Bank of America declined to comment. Ant and Alibaba declined to comment in separate emailed statements.IPO BankersAnt is aggressively competing with Tencent’s WeChat Pay to maintain its dominance of China’s $29 trillion mobile payments space. It has been pitching digital payment services to the local arms of KFC Holding Co. and Marriott International Inc. as it transforms its Alipay app into an online mall for everything from loans and travel services to food delivery.Alipay’s share of mobile payments has increased for three consecutive quarters, rising to 55.1% in the fourth quarter, according to consultant iResearch. Tencent has 38.9% of the market.Ant hired Citigroup Inc., JPMorgan Chase & Co., Morgan Stanley and CICC to lead its Hong Kong IPO. The sale is expected to raise more than $10 billion and could value the firm at $200 billion, people familiar have said. Ant hasn’t selected banks for the Shanghai portion, though global firms will probably be left out because lead underwriters for any IPO on the tech-focused Star board must buy shares in the deal.Banks leading the Ant IPO in Hong Kong have fewer conflicts. While Morgan Stanley earned $6.4 million for a junior role in Pinduoduo’s stock sale last year -- about half of Goldman’s haul -- Citigroup and JPMorgan weren’t involved in those deals, Bloomberg data shows.(Adds details on Alipay and WeChat Pay’s market share in 13th paragraph. An earlier version of the story was corrected to show Ant has kicked off its IPO process.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
“Blank-check companies” give investors an opportunity to ride along with deal makers like Bill Ackman looking to bring new businesses public
When trading volumes surged to record levels, that may have signaled the end of Nio's (NASDAQ:NIO) rally on the stock market. NIO stock peaked at $16.44 in early July, driven by three positive catalysts.Source: xiaorui / Shutterstock.com Strong monthly delivery numbers, China-based stocks trading at new highs, and hype on Tesla (NASDAQ:TSLA) gave Nio shares a lift.With profit-taking dominating the stock's direction, will Nio trade at 16 - $20 in the future?InvestorPlace - Stock Market News, Stock Advice & Trading Tips U.S.-China Tensions Hurt Nio StockLast week, China, as predictable as it is, retaliated after the U.S. ordered the closing of the China consulate in Houston. * 10 Cybersecurity Stocks We Need Now More Than Ever China responded by ordering the closure of the U.S. consulate in Chengdu. The poorly timed tensions between the two mighty countries is an unlucky development for Nio shareholders.Macro political risks will put pressure on the stock's valuation. And now that all three catalysts are gone, chances are high that Nio will underperform in the near-term.Strong selling with Nikola (NASDAQ:NKLA) shares is not helping Nio, either. The company filed to sell up to 53,39 million shares. After the announcement on July 17, the stock broke down from the $50 support level.Chances are high that Nikola will trade back to Initial Public Offering levels in the $10 range in the months ahead. Unfortunately, the cash raised is perfectly timed to benefit Nikola and not its shareholders.Its drop officially marked the end in the Electric Vehicle hype that began in May 2020 and ended at the beginning of July 2020. Goldman Sachs DowngradeAnalysts are often late in their buy and sell calls but investors cannot ignore Goldman Sachs' (NYSE:GS) bearish note on July 17. The firm warned that Nio's valuation was too high. It cited that enthusiasm for EV adoption in China will not increase delivery volumes from previous months. Plus, profit expectations are no different over that period.Goldman started a severely bearish tone when it set $7.00 price target.Fundamentally, Nio's liquidity is stronger than ever. The company secured a new $1.5 billion credit line on July 10. This effectively removes any bankruptcy risks.Management learned from a few quarters ago when sales were slumping, its cash on hand was running low. The lockdown in China hurt sales and put Nio in a dangerous liquidity crunch. Now that China re-opened, the worst is behind it. And Nio is in a good position to invest in its business with the available cash. Growth CatalystsNio may expand its sales force, open a few more small stores, and bolster its online site to grow unit sales in China. Strong deliveries may lift the stock again.Still, a euphoria on EV stocks fueled the last rally. Without strong buying interest for Tesla stock and the recent plunge in Nikola stock, Nio will more likely settle at lower levels.Tax credits and other incentives in China may give Nio a gradual lift in sales in the months ahead. If Nio falls back to the high single-digits, investors may be on Nio's EV dominance in China at a better price. Price Target and Your TakeawayAccording to Stock Rover, Nio's profitability is still very poor:Stock Industry S&P 500 Quality Score 8 55 79 Gross Margin -15.20% 17.00% 29.00% Operating Margin -132.60% 4.30% 13.00% Net Margin -138.60% 3.00% 8.50% To Goldman Sachs' credit, margins are still too weak. Nio will have to expand its business and increase its addressable market in China and worldwide first. Otherwise, the investment is still a dangerous speculation with downside risks.Nio still needs production scale and demand growth to reach profitability. The negative numbers in the above table suggest that the stock is still risky speculation.Conservative investors should stay away from Nio shares for now. Let the speculators bet on the rebound instead.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Why Investors Should Stay Away From Nio Stock for Now appeared first on InvestorPlace.
(Bloomberg Opinion) -- There is no shortage of investors shrugging off the latest leg lower in U.S. Treasury bond yields, saying heavy central bank involvement in this part of the financial market make such moves less of a signal that the economy or that equities are headed for trouble. That interpretation would be a mistake.Recall that yields on 30-year government bonds started to decline on Jan. 2, anticipating the fallout from the budding coronavirus crisis that had taken hold in China. Yields fell from 2.34% on that day to 0.94% on March 9, as the price of the benchmark 30-year bond leaped 29%. Only on Feb. 19—seven weeks later—did the S&P 500 Index begin its 35% slide. Fast forward and 30-year yields have fallen from 1.66% on June 8 to a recent 1.19% as their prices climbed 9%. The question is whether stocks will follow again, and with a similar lag of about seven weeks.The fundamental economic scene favors a repeat. The situation is ghastly, with Covid-19 infections accelerating and plans for physical classes at many schools, colleges and universities this fall risking further contagion. Staying closed or holding virtual classes, however, promotes dropouts, pressure to cut tuition and fees and financial disaster for many schools. Then there are the problems of reopening businesses, re-establishing and reorienting supply chains and encouraging many to return to work who are now paid more by federal and state unemployment benefits than when they were employed.The recent Treasury bond rally fits with our forecast that the recession has a second, more serious leg that will extend well into 2021, despite massive monetary and fiscal stimulus. Declining business activity saps private credit demand and makes Treasuries shine as havens. A deep recession also breeds deflation to the benefit of Treasuries. The government said Thursday that its core personal consumption expenditure index, which is what the Federal Reserve uses to track inflation, fell 1.1% in the second quarter.Over the entire post-World War II era, the correlation between Treasury bond yields and inflation as measured by the Consumer Price Index is 60%. This is remarkably strong considering all the other possible influences on long-term interest rates such as federal budget deficits, wars, consumer sentiment and spending, and government actions. My forecast of Treasury bond yields starts and ends with my projection of inflation.The spread between 10-year Treasury Inflation-Protected Security yields and conventional 10-year Treasury yields, which is what bond traders expect inflation to average over the life of the securities, recently dropped to a miniscule 0.50% from 2.5% in 2012.Treasury bond investors concentrate on inflation, Fed policy and not much else. In contrast, equity mavens worry about a whole host of often conflicting issues such as corporate finances, profits, price-to-earnings ratios, to name just a few.Sure, the Fed has been buying Treasuries and along with other fixed-income securities, so its assets have exploded to $7 trillion from around $4 trillion in February. Nevertheless, all this Fed-created liquidity hasn’t found its way into the real economy, as shown by the collapse in the velocity of money.Then there is the argument that, except for a handful of technology shares such as Facebook Inc., Amazon.com Inc., Apple Inc., Microsoft Corp. and Google-parent company Alphabet Inc., the stock market continues to be weak. Goldman Sachs Group Inc. notes that these five have added more than a third to their market values this year, despite the sharpest recession since the Great Depression.The S&P 500 is up 0.5% for the year thanks to the strength of those five companies, but the other 495 members are down about 5% on average on a market cap-weighted basis. Still, that 5% decline pales in comparison to the earlier 35% plunge in the S&P 500. Goldman Sachs calculates that if those five tech stocks were to fall 10%, the bottom 100 in the S&P 500 would need to jump 90% to offset the decline.Tech stocks have benefited from their relative independence from the nuts-and-bolts economy. Also, they’ve gotten a boost from homebound Americans who have replaced face-to-face contact with telecommunications. But they are very expensive and under fire from Washington and Europe for anti-competitive practices. And fads end. Recall the craze for Socks the Puppet and his dot-com buddies in the late 1990s. When that bubble broke, the Nasdaq Composite Index plunged 78%.Also recall the so-called Nifty Fifty group of stocks in the early 1970s. When the only companies of interest to investors made gimmick cameras, ran amusement parks and built motor homes, it was clear the basic economy was in trouble. What followed was the severe 1973-1975 recession and deep bear market.I believe the bond rally signals a renewed drop in stocks, with the S&P 500 down 30% to 40% from here as the great depth and length of the recession hits home.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.A. Gary Shilling is president of A. Gary Shilling & Co., a New Jersey consultancy, and author of “The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation.” Some portfolios he manages invest in currencies and commodities.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- After pocket lockdowns, get ready for pint-sized recoveries.From Tokyo to Miami, authorities are imposing localized curbs on social and commercial life in an an attempt to constrain resurgent waves of the coronavirus without locking down completely. Targeted mini-measures were designed to avoid the devastating contractions of the last quarter, yet they are inevitably undermining the return to economic health. That reality was borne out in Federal Reserve Chairman Jerome Powell's dour view of the world economy this week.Japan's expansion will be shaved by an annualized 0.8% should a surge in Tokyo Covid-19 infections prompt renewed domestic travel limits, Goldman Sachs Group Inc. warned Tuesday. That prospect would bear out Bank of Japan Governor Haruhiko Kuroda’s caution that, after an initial spurt, the rebound will slow. China, the first major economy to reopen after a deep freeze, lost momentum this month. India’s struggles will probably warrant another interest rate-cut next week; some form of debt monetization is conceivable this year.The longer economies are in a netherworld of half-open and half-closed, the harder it is to unwind emergency stimulus programs. Many were framed as a response to a temporary phenomenon: a way to put a floor under activity during the pandemic. It was implicit that things would be on the mend in the second half. They are mending, it’s true, but slowly and unevenly. A double-dip recession isn’t out of the question.It wasn’t supposed to be this way. Remember the talk of a V-shaped recovery? That has an archival feel by now. Economies may not neatly resemble any shape until a vaccine is widely available or society finds a way to responsibly distance and live with the pandemic — or a combination of both. In a press conference Wednesday, Powell described a few phases to the pandemic: The first was the lockdown with the accompanying collapse in growth and rollout of massive stimulus; the next is the reopening, which we are in. Powell was at pains to say that the success of this phase depends on the virus, masks and distancing. There's no doubt the recovery has slowed; from a policy perspective, “we are in this until we are well through it,” he said.The case for prolonged monetary and fiscal infusions is straightforward when you have the world’s reserve currency and deep domestic capital markets on your side. Spare a thought for economies in Asia that don't hold those aces.Outside Japan, central banks have engaged in varying degrees of quantitative easing and bond purchases to support markets since the pandemic erupted. These range from yield-curve control in Australia; QE in New Zealand; vague noises about QE in South Korea; piecemeal asset purchases in Thailand; and outright debt monetization in Indonesia. Japan never stopped QE, even in fairly good times.The Philippines has tried to steer a middle course between Thailand and Indonesia without making a fuss about it, a fudge that may not be sustainable. Thailand has one of the direst outlooks in Asia, given the collapse of tourism. A new course must be tempting, if not desirable, as I wrote with Clara Ferreira Marques here.Whatever their pandemic response — blanket or targeted — or their economic approach, countries can’t avoid paying a price. The only thing that will remove the pain for Asia is beating the pandemic. As Powell knows. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- SAP SE is working with Morgan Stanley and JPMorgan Chase & Co. on its plans to list its Qualtrics software unit in the U.S., according to people familiar with the matter.Less than two years after buying the company for $8 billion, SAP announced this week it would pursue an initial public offering the unit, signaling a strategic shift under new Chief Executive Officer Christian Klein.SAP will keep a majority stake in the business after the U.S. listing, which in turn will make Qualtrics co-founder Ryan Smith the biggest single shareholder, the company has said.SAP is seeking to maintain ownership of at least three quarters of Qualtrics although its plans aren’t finalized and could still change, the people said, asking not to be identified because the matter is private.SAP is also in talks with Goldman Sachs Group Inc. about a role and is likely to hire several more banks as underwriters as the listing gets closer, the people said.Morgan Stanley and Goldman Sachs were the lead underwriters on Qualtrics’s planned IPO in 2018, before it was instead acquired by SAP. JPMorgan was not listed as an underwriter on that deal, filings from the time show.Representatives for SAP, Qualtrics, Morgan Stanley, JPMorgan and Goldman Sachs declined to comment.An IPO could value Qualtrics, which measures and generates reports on customer and employee satisfaction, at as much as 16 billion euros ($18.9 billion), according to Bloomberg Intelligence analysis, more than twice what SAP agreed to pay in late 2018 in its biggest-ever acquisition.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Mizuho Securities Managing Director and Chief Economist Steve Ricchiuto joins Yahoo Finance’s Zack Guzman to break down the second quarter GDP report and the latest weekly jobless claims data.
Goldman Sachs Group (NYSE: GS) shares are trading lower on Thursday amid macro concerns following a steep decline in U.S. GDP and rising jobless claims, a well as weakness in tech names ahead of this week's earnings.Goldman Sachs is a global investment banking firm whose activities are organized into investment banking (20% of net revenue), global markets (40% of net revenue), asset management (25% of net revenue), and consumer and wealth management (15% of net revenue) segments.Approximately 60% of the company's net revenue is generated in the Americas, 15% in Asia, and 25% in Europe, the Middle East, and Africa. In 2008, Goldman reorganized itself as a financial holding company regulated by the Federal Reserve System.Goldman Sachs shares are trading down 2.85% at $196.67 on Thursday during the time of publication. The stock has a 52-week high of $250.36 and a 52-week low of $130.85 per share.See more from Benzinga * Tapestry CEO Jide Zeitlin Resigns Suddenly(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Investment banks in London are trying to tempt more staff into the office, laying on free food, Friday night drinks and other perks to lure bankers back where they can pass skills to others -- and compliance departments can keep a closer eye on them. Mass remote-working has been largely successful for many financial firms, improving communications and sparing staff from long commutes during a near-global coronavirus lockdown. In public, they tend to cite the importance of building teams, boosting morale and mentoring junior staff.
(Bloomberg) -- The coronavirus pandemic is hampering efforts by Zimbabwean billionaire Strive Masiyiwa to sell a stake in Africa’s largest fiber company.Masiyiwa is seeking buyers for 20% to 34% of Liquid Telecommunications Holdings Ltd. for as much as $600 million, according to four people with direct knowledge of the matter. He needs the money to repay a $375-million loan that was backed by Public Investment Corp., the continent’s largest money manager, they said.The PIC, which oversees the equivalent of $135 billion mainly on behalf of South African government workers, is demanding the issue be resolved by the end of August after granting an extension on the payment earlier this year, the people said. The loan it backed was used to fund a pay-TV venture, which failed last year because Zimbabwe’s economic woes and currency shortages meant the company couldn’t pay suppliers.The 59-year-old tycoon had pledged shares in Liquid Telecom to the PIC as security for the loan, which had been taken out with Deutsche Bank AG. Masiyiwa was planning to repay the debt from the proceeds of an initial public offering in Liquid Telecom, which was scrapped because of volatile equity markets, the people said.Read more: PIC Poised to Take Stake in Fiber Company After Deutsche LoanThe founder of Econet Global Ltd., which has interests in mobile-phone network operators and digital-banking operations across the continent, would rather sell part of his 66% stake in Liquid Telecom to avoid surrendering shares in the company at a discount to the PIC, one of the people said.Masiyiwa hired Goldman Sachs Group Inc. earlier this year to sell the stake, but talks with potential investors started unraveling after the Covid-19 outbreak intensified in March, the people said. Buyers wanted more time to assess the economic fallout of lockdowns to contain the virus on Africa’s economies, they said.Representatives for the PIC, Goldman Sachs, Deutsche Bank and Econet declined to comment.Read more: Zimbabwe President in Fight With Tycoon Over Economy CrashLiquid Telecom operates in 13 countries in East, Central and southern Africa with data centers in Johannesburg, Cape Town and Nairobi. It also offers cloud-based services from Microsoft Corp., according to its website. U.K. development finance institution CDC Group Plc in December 2018 bought almost 10% of Liquid Telecom for $180 million.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- As negotiators from Goldman Sachs Group Inc. and the Malaysian government gathered at the Mandarin Oriental hotel in Kuala Lumpur last week, the two sides could hardly have been further apart on a 1MDB deal.The storied U.S. bank, needing to turn the page on one of the biggest scandals in its history, started with the same offer it made to the previous government: $1.75 billion.While this was a step up from the 1 billion ringgit ($235 million) that former leader Mahathir Mohamad said the bank offered last year, it was a far cry from Malaysia’s demand: more than $7 billion to resolve probes into the role Goldman’s bankers played in a scheme to plunder the nation’s sovereign wealth fund.With that glaring $5.25 billion gap, the two sides dug in to negotiate in a meeting room at the Kuala Lumpur five-star hotel, a favorite of the country’s former monarch, perched steps from the iconic Petronas Twin Towers.This account of the talks is from people familiar with the negotiations who declined to be identified discussing private matters. A representative for Goldman declined to comment, while the prime minister’s office couldn’t immediately comment on the matter.Digging InGoldman flew some heavy hitters 9,400 miles (15,200 kilometers) from New York to sit at the table. Chief of Staff John Rogers, once an aide to former President Ronald Reagan, was there. So was General Counsel Karen Seymour, famous for prosecuting Martha Stewart. Lawyer David Markowitz posed a particular challenge for Malaysia, digging his heels in the most.On the other side, Malaysia brought its top lawyers including Prime Minister Muhyiddin Yassin’s attorney Rosli Dahlan, as well as Secretary General of Treasury Asri Hamidon and Securities Commission Chairman Syed Zaid Albar.Negotiations dragged on through the week. Long days stretched into night, with hotel staff delivering boxed meals including local rice dishes, in keeping with Covid-19 measures. The talks stalled a few times as Malaysia pressed Goldman to cough up more toward the billions the country alleges were siphoned away to buy condos, jewelry and art.Goldman’s investment-banking group, led at the time by now-Chief Executive Officer David Solomon, collected an unusually high $600 million for its work raising $6.5 billion from bond sales for the 1MDB fund. The bank has consistently denied wrongdoing, saying that former Malaysian officials lied about how the proceeds would be used.When a $2.2 billion offer was put on the table, Malaysia said it wasn’t enough.Yet the two sides kept at it, both highly motivated to reach a deal. For Goldman, a Malaysia settlement would go a long way in securing a resolution with the U.S. Department of Justice, which is also probing the 1MDB affair. Attorney General William Barr is overseeing the case after getting a waiver because his former law firm represents Goldman. A defeat of Donald Trump in November elections could upset that plan if there’s no settlement by then.Several Goldman bankers have already paid a price for the scandal. Former Southeast Asia Chairman Tim Leissner pleaded guilty to U.S. charges including conspiracy to launder money. Former banker Roger Ng faces similar charges while Andrea Vella, a former co-head of investment banking in Asia, was banned from the industry by the Federal Reserve this year.The Goldman side also felt this five-month old Muhyiddin government was easier to deal with than the previous administration, increasing the odds of a settlement.Muhyiddin needed to prove his anti-corruption mettle, even while counting on the backing of a rival party that was in power during the scandal over the fund formally known as 1Malaysia Development Bhd. With his razor-thin majority in parliament, Muhyiddin’s attacks on corruption could help win allies across the aisle.As talks wore on, Goldman proposed a novel solution to break the impasse: A guarantee that Malaysia would get $1.4 billion from the seizure of missing 1MDB assets. The sweetener wasn’t dreamed up on the spot: Goldman had the offer in its back pocket all along in case it was needed to reach a deal.Sweetened DealAny additional money recovered would go to the country, while Goldman stood ready to bridge any gap.The assets, many of which were allegedly purchased using 1MDB funds by fugitive businessman Low Taek Jho, include a penthouse apartment in Manhattan’s art deco Walker Tower, a mansion overlooking the Sunset Strip in Los Angeles, and an Andy Warhol ‘Campbell’s Soup Can’ painting worth $6 million. There’s a vintage French “King Kong” poster, and a 300-foot super yacht named ‘Equanimity,’ seized off the coast of Bali that has since been sold.To seal the deal, Goldman also agreed to boost the cash portion of the settlement to $2.5 billion, ending five days of marathon talks. Negotiators put ink to paper late afternoon on July 24.Deal WinnersIn the end, both sides can at least claim victory with the settlement.Goldman gets to move on, ending the reputational hit from the scandal and ensuring there are no further legal claims from Malaysia after the nation agreed to drop all criminal charges against the bank and its executives. The lender may not have to pay a dime above the $2.5 billion in cash. Based on its valuation analysis of the assets, it sees no significant risk exposure from the $1.4 billion guarantee. Already, the Justice Department has seized more than $1 billion of assets as part of its 1MDB lawsuit.Malaysia, meanwhile, says the deal is worth more than $4.5 billion, including the money it already received from the U.S. That’s a sizable amount -- worth more than 1% of GDP -- for a country that stood up to one of Wall Street’s iconic banks.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Would you still buy an electric car if you knew you wouldn’t be able to resell it in the future? That’s the latest hurdle potential buyers are contending with, and it’s bound to become a big driver of demand. The expenses of owning an electric vehicle have always stood in the way of mass adoption, even in China, which has an extensive subsidy program. Starting from the cost of the battery to how far a charge will take drivers, not to mention the shortage of points where they can plug in, there’s a lot to grapple with before green cars can overtake those powered by internal combustion engines.Much of the anxiety stems from batteries – the price, technology, density, and where to charge them. Manufacturers have worked for years to bring down the price on a per kilowatt-hour basis. Technology has improved, with different materials helping cars run longer and further, thus needing less charge. The chemistry has become more stable. In May, for instance, Svolt Energy Technology Co., owned by the parent of China’s Great Wall Motor Co., launched the world’s first battery that doesn’t use the controversial yet once-essential cobalt. It costs less than the mainstream competition and has higher density, meaning more energy is packed into the same volume. So the good news is, battery prices are dropping, down to 1.1 yuan ($0.13) per watt-hour in 2019 from 2.1 yuan per watt-hour in 2016. That also means that the cost of electric vehicles is coming down (though the good ones still aren’t that affordable), since batteries typically account for 50% to 60% of their value.But therein lies the trap: As the technology evolves and drives prices of new vehicles lower, existing owners are taking a disproportionate beating in the secondhand market. The average resale value of electric vehicles and plug-in hybrids is less than 40% of the original purchase price, versus 50% to 70% on conventional cars. Goldman Sachs Group Inc. analysts note that consumer concerns about the quality and reliability of “old batteries appear to weigh on used cars’ prices.” That doesn’t really help make the case for current new buyers, either.Then there are underlying demand trends. Sales of all cars were falling even before Covid-19. The market for batteries has been inching lower across the U.S., China and Europe. Installations fell around 30% in June from the previous year in the world’s largest auto market, China. Driven by regulatory pressures, vehicle manufacturers are tying up with and taking big stakes in battery makers to push forward ways to make greener cars. But confidence to buy them hasn’t picked up in most countries, despite subsidies in some shape or form to encourage sales. Meanwhile, the auto market in China is maturing and that has changed preferences, too. Post-pandemic, the last thing consumers will want to buy is an asset that depreciates faster and is more expensive than its main competition, in this case, cars with internal combustion engines. Buying behavior in China shows as much: Purchases are being delayed until automakers drop their prices for electric cars below 300,000 yuan to qualify for the government’s rebate program.It’s unclear whether Beijing can shore up vehicle demand via subsidies in a big way as it has in the past, though some local authorities have extended rebates and tax incentives to boost short-term sales in recent months. The central government is trying a different tack, announcing a Green Mobility Initiative to push for electric buses in public infrastructure. Growth in batteries has been driven less by passenger cars than by installation in buses. In the Covid-19 era, it’s less clear if consumers (those with a choice) will want to hop on public buses to commute.There is, of course, the Tesla Inc. caveat. Elon Musk’s company has a resale program that gives buyers a bit of assurance that someone will buy their cars in the future. But most companies can’t afford that, especially as they try to make electric vehicles more affordable while their margins are shrinking.Buying an electric car is a lot tougher than it sounds, and will stay that way until consumers can justify the hole in their wallets. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Goldman Sachs Merchant Banking Division (MBD) is seeking up to US$17bn for private credit investments for senior debt financings and special situations transactions, according to documents from Connecticut's state pension plan. Consisting of total investor commitments and anticipated leverage, MBD is targeting US$7bn for Broad Street Loan Partners IV (Loan Partners IV), according to the documents. A Goldman Sachs spokesperson declined to comment.
A special purpose acquisition company (SPAC) is a publicly traded shell company formed for the purpose of acquiring a privately held company, which has the effect of taking that acquired company public. GS Acquisition Holdings Corp II (NYSE: GSAH.U) is the second SPAC created by renowned investment bank Goldman Sachs. Should investors trust Goldman Sachs and invest in the new SPAC?
(Bloomberg Opinion) -- Like its bulge-bracket Wall Street rivals, Nomura Holdings Inc. found volatility was its friend last quarter. The surge in trading revenue that drove a return to profit is unlikely to be sustained, though. Japan’s largest brokerage needs more than tinkering at the margins to drive a post-Covid recovery.Chief Executive Officer Kentaro Okuda, reporting his first set of quarterly results, can bask for now. Net income more than doubled to 142.5 billion yen ($1.4 billion) in the three months ended June 30, from 55.8 billion yen a year earlier, and rebounding from a loss in the March quarter. Revenue from the firm’s wholesale division, which houses its bond-trading activities, rose to a record. (A one-time gain from revaluation of Tokyo real estate also buoyed earnings.)The trading boom has lifted profits across U.S. investment banks. Goldman Sachs Group Inc.’s revenue from its fixed-income, currencies and commodities business more than doubled to the highest in nine years in the three months through June.These conditions won't last forever. Fixed-income trading gains reflect the U.S. Federal Reserve’s extraordinary efforts to keep credit flowing to companies during the Covid-19 pandemic. By nature, this will be a temporary fix. The current quarter has been slower for the wholesale business, Chief Financial Officer Takumi Kitamura said on a call with reporters. That echoes Goldman CEO David Solomon, who acknowledged that trading activity in June had already eased from the highs of March and April. Behind the bonanza in bond trading, a strength for Nomura, there are troubling signs. The Tokyo-based firm is lagging behind in Japanese equities underwriting, where it should expect to lead. Nomura ranks fifth for domestic equity fundraisings in the period since April 1. (It remains first for domestic corporate and municipal bonds.)Okuda has focused on cost-cutting to steer Nomura through the global economic slump triggered by the pandemic. The brokerage has cut dozens of investment-banking jobs in the U.S., Gillian Tan of Bloomberg News reported before the results, citing people with knowledge of the matter. Nomura is also closing its Instinet equity-research division in the U.S. Okuda, meanwhile, is reviewing the firm’s need for office space as the pandemic prompts a shift to working from home.These efforts are showing some progress: Employee numbers fell to 6,118 as of June 30, from 6,684 a year earlier, in Asia outside Japan; to 2,164 from 2,230 in the Americas; and to 2,728 from 2,775 in Europe. Nomura is also beefing up in selected areas, such as buying boutique investment bank Greentech Capital Advisors late last year to strengthen its presence in the fast-growing environmental, social and governance area.Okuda will have to do more and move faster, however, if he’s to please investors who have turned away from the stock. Nomura shares have underperformed the Topix this year and are trading at little more than half of book value.For all the cost-cutting, the bank’s expenses are at their loftiest in at least five quarters. Compensation and benefits for the three months through June rose to 138.3 billion yen, from 125.1 billion yen a year earlier. While higher revenue and profit imply increased expenses (bond traders can probably expect some hefty bonuses), it’s a trend Nomura needs to watch.Even before Covid, competition from online brokers had been intensifying at home. That’s partly what prompted the $1.3 billion cost-cutting program announced by Okuda’s predecessor in April last year. The pandemic has only increased the pressure for a bigger and bolder revamp. A bumper quarter has bought some time. Nomura’s CEO should use it wisely before the glow fades. (Updates with bond rankings in the fifth paragraph. An earlier version of this column corrected the figure for current employees in Europe in the seventh paragraph.)This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The guilty verdict against former prime minister Najib Razak in the first of the 1MDB trials could strengthen the current government’s hand after months of political turmoil.Najib faces at least 12 years in prison after the High Court on Tuesday found him guilty of all seven charges in a case involving millions he received from a former unit of troubled state fund 1MDB. He’s out on bail and his lawyer said he would appeal the ruling, but a criminal conviction would complicate any efforts by Najib to seek office again.The decision could bolster Prime Minister Muhyiddin Yassin’s political capital at a time when his administration controls a razor-thin majority in parliament and talk of a snap election is heating up. The current leader relies on Najib’s United Malays National Organisation party for support and was seen to be at risk of succumbing to pressure from UMNO on policy matters -- including on how he treats the 1MDB cases.Muhyiddin may now be able to quell some of those concerns, with the added advantage that Najib’s conviction could split UMNO into those who support the ex-premier against those who want to move on and work with Muhyiddin’s government.The verdict comes days after a $3.9 billion settlement Malaysia struck with Goldman Sachs Group Inc. to help resolve the country’s 1MDB case against the bank. That deal enables the country to recoup some of the money lost through the troubled state fund. Meanwhile the police said they have “strong indication” that Low Taek Jho, the scandal’s suspected mastermind who remains at large, is hiding in Macau. Low has denied wrongdoing.“Politically, it strengthens PM Muhyiddin’s hand,” said Wong Chin Huat, a political scientist and professor at Sunway University. “He could claim that the anti-graft drive that started under” the previous Pakatan Harapan government “is continuing under him.”Muhyiddin’s government, which includes a breakaway faction from the Pakatan Harapan administration, came to power earlier this year on the backing of UMNO, the party once led by Najib. The fledgling government faced public backlash after prosecutors reached a deal to drop 1MDB-related charges against Najib’s stepson Riza Aziz, even as Muhyiddin himself repeatedly pledged to ensure justice.Budget VoteWhile the ruling on Tuesday means the prime minister could lose support from pro-Najib factions within UMNO, he may be able to pick it up elsewhere, which would be critical to securing majority support for the 2021 state budget set to be tabled in parliament this November, Wong said. Sticking to the reforms promised by the last government may also help him in the event of an election.The opposition has been planning to launch a no-confidence vote against Muhyiddin for months, even as it struggled to agree on who should be its prime minister candidate.“This story is far from over,” said Peter Mumford, Southeast & South Asia practice head at risk consultancy Eurasia Group. “In some ways the outcome is better for Muhyiddin as it would be tricky for him to campaign in the likely upcoming election if there were accusations that he had somehow engineered an acquittal for Najib.”No ‘Reasonable Doubt’The case that concluded this week involved 42 million ringgit ($10 million) of funds deposited in Najib’s personal accounts from a former unit of 1MDB. Delivering the verdict on Tuesday, High Court Judge Mohd Nazlan Mohd Ghazali told the court he found “the defense has not succeeded in rebutting the presumption on the balance of probabilities or raising reasonable doubt on the charge against the accused.”Najib was sentenced to 12 years in prison for one count of abuse of power, as well as 10 years each for three charges of money laundering and three criminal breach of trust charges, to be served concurrently. He must also pay a fine of 210 million ringgit or face an additional five years imprisonment. He was released on bail late Tuesday.Najib is a divisive figure in Malaysian politics, even as he remains popular in some quarters. Many Malaysians celebrated his conviction on social media, like former lawmaker Rafizi Ramli, who was imprisoned for leaking the contents of a 1MDB audit report to the public amid the scandal in 2016. Rafizi said on Twitter that he “never expected much from those years, but I did feel that all the heartbreaks were well worth it today.”Yet as the verdict hearing dragged on through the day, hundreds of Najib’s supporters crowded outside the courthouse, some wearing masks and others not.“Najib’s influence among conservative Malays is still strong,” said Awang Azman Awang Pawi, an associate professor at the University of Malaya. “This does not mean the end of Najib’s political life because there is an appeal process and anything can happen in politics.”The trial is only the first of at least three involving Najib, who faces dozens more corruption and money-laundering charges, including those linked to billion-dollar acquisitions and bond sales by the scandal-ridden fund.“The verdict is a huge win for Malaysians,” the opposition Pakatan Harapan alliance wrote in a statement. “This process would certainly have not started if the people had not risen up and secured Pakatan Harapan’s victory” in the 2018 election, when the coalition ousted Najib in the country’s first change of government since its independence on a wave of public anger over the 1MDB scandal and rising living costs.(Updates with police comment on Jho Low.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Rocket Companies (RKT) the parent company of mortgage lending giant Quicken Loans, has set the terms of its initial public offering. The company announced earlier in July that it plans to trade on the New York Stock Exchange under the ticker “RKT.” The company plans to offer 150 million shares priced at $20 to $22 each.
A Malaysian court on Tuesday granted a delay in carrying out a jail sentence and fine against former Prime Minister Najib Razak at the end of the first trial linked to a multi-billion dollar scandal at state fund 1MDB. High court judge Mohamad Nazlan Mohamad Ghazali also increased his bail amount by 1 million ringgit ($235,300) that must be posted by Wednesday. Najib was earlier sentenced to 12 years in jail and a 210 million ringgit fine for abuse of power for illegally receiving nearly $10 million from SRC International, a former unit of the state fund.