This week in charts
Gold
Global onshoring index
Recession
Uranium
Nuclear power
Small caps
Small caps vs. Large caps
S&P 500 Earning yield
Private Equity’s Latest Move to Gin Up Cash: Borrowing Against Its Stock Holdings
Cinven’s clients got some unwelcome news last year: the buyout firm’s financing tied to a lab-testing company wasn’t going well. Instead of getting a windfall, clients had to ante up more cash.
The price drop was so bad in February 2023 that Cinven faced a margin call — an ultimatum from lenders to put up more money for collateral or risk seeing the stock seized. Cinven, with the help of clients, had to hand over 299 million euros, or about $320 million, said people familiar with the investment.
But the risk is more than just a falling stock price. On top of the margin loans, funds have adopted more novel forms of borrowing against their holdings to free up cash for investors, adding to the proliferation of debt across private equity.
China’s exports grew faster than expected in May, official customs data showed on Friday, in a boost to policymakers eager to drive economic momentum even as trade tensions rise.
The recovery in exports points to stronger overseas demand at a time when domestic consumption in China remains weak and has provided a further boost as officials target annual GDP growth of about 5 per cent for 2024.
Faced with the effects of a prolonged property slowdown in the mainland, Xi Jinping’s government has focused heavily on manufacturing as part of an upgraded industrial strategy.
Beijing’s prioritising of industry has been criticised in the US and the EU, which is next week expected to publish the results of a months-long probe into subsidies for Chinese electric vehicles.
The European Commission’s decision will be closely watched across markets. Chinese auto exports are up 20 per cent in the year to date, according to an ING report, against a backdrop of a domestic price war between dozens of competitors.
China’s exports soared during the Covid-19 pandemic but declined for much of 2023 as trade activity normalised.
This week’s fun finds
Rather than try to intentionally burn our faces off, this time around we were all about the flavour. This week's entrants were Wolf’s Bite Pepper Sauce and Tijuana Tom’s Gochu Gang.
Consensus was that both had really great flavour and would both make good wing sauces. People were even smiling at the end.
Other comments:
- Would I let my children eat this?
- Smells like pumpkins.
How Birkenstock became an improbable luxury empire
The 250-year-old German orthopedic shoe company Birkenstock has transformed itself into a luxury behemoth with Succession-level family drama. Tim Loh explains how the shoemaker got where it is today. Watch the video to learn more.
