Brief : The theater where Tony Bennett and Steely Dan once performed is still dark. Players at the blackjack tables are separated by plastic partitions. The gondoliers offering rides along faux canals wear face masks and aren’t allowed to sing. The Venetian Las Vegas isn’t the resort it was a year ago. But that didn’t stop Apollo Global Management Inc. and its real estate partner, Vici Properties Inc., from plunking down $6.25 billion to purchase the property, the neighboring Palazzo and the adjacent Sands Expo Convention Center from Las Vegas Sands Corp. last week. The deal surprised observers such as Stephen Miller, director of the Center for Business and Economic Research at the University of Las Vegas, Nevada. “Are they off their nut or are they on to something?” he asked. Despite a long list of problems, Apollo partner Alex van Hoek sees opportunity -- for soaring tourism and a return of convention travel that made the city one of the top destinations for business groups. “We are very bullish on the recovery of Las Vegas,” said van Hoek, who led the investment firm’s purchase. It’s no sure thing. A year after the coronavirus shut down its famous casinos, America’s gambling capital is trying to crawl back from one of its deepest slumps ever. The glittering palaces along the Strip began reopening last June, but business is still slow. Unemployment, at 10%, is the highest among big U.S. cities. Tourist traffic in January slumped almost two-thirds from last year. Gambling revenue on the Strip was off 44% and the convention business nonexistent.
Brief: Deutsche Bank paid Chief Executive Christian Sewing 7.4 million euros ($8.8 million) in 2020, up 46% from a year earlier, prompting criticism from unions and politicians. The bank’s bonus pool was up 29% as it rewarded staff for a pandemic-related trading boom, which helped the German lender to eke out a profit after years of losses. The disclosure in the bank’s annual report on Friday came as Deutsche said revenue would be “marginally lower” this year. In Germany, which is facing an election year and where the public disapproves of high pay, the Verdi labour union called the payouts “grossly disproportionate” and politicians were critical. “It doesn’t fit with the times that Deutsche Bank, which has also indirectly benefited from bailouts time and again, is having a coronavirus party,” Fabio De Masi, a member of Germany’s parliament, said in a statement to Reuters. Last year marked a turnaround for Deutsche and Sewing, who took up his post in 2018, after the bank had faced a series of costly regulatory failings, including over money laundering. The bank has lost 8.2 billion euros over the last decade.
Brief: The European Union’s pandemic recovery fund has run into early trouble, with the bloc’s executive arm judging that most of the national spending plans submitted so far still need work to get approved, raising the risk of delays in disbursements to some of the region’s battered economies. Germany’s submission is among those deemed to fall short of expectations, with southern European nations including Greece and Spain having the strongest plans, according to officials familiar with the discussions who asked not to be identified. Some countries haven’t made proposals at all yet, and others are way behind, they said. The German government is in talks with the Commission to reduce some of the hurdles to investment in its plan, one official said. A commission spokeswoman said that staff are in “intensive dialogue” with member states with the aim of making disbursements starting from mid-2021, but that “it is also essential” that these plans meet the key objectives of the fund. A spokesperson for the Greek government also declined to comment, and spokespeople for the German finance ministry and Spanish government didn’t immediately respond to a request for comment.
Brief: A growing number of Americans want to get the coronavirus vaccine, and a majority also support workplace, lifestyle and travel restrictions for those not inoculated against COVID-19, according to a Reuters/Ipsos poll released on Friday. Altogether, 54% of respondents said they were “very interested” in getting vaccinated. That was up from a January survey, when 41% expressed the same level of interest, and 38% in a May 2020 poll before a coronavirus vaccine was developed. Interest in the vaccine increased over the past year among whites and racial minorities, with about six in 10 whites and five in 10 members of minority groups now expressing a high level of interest. Twenty-seven percent of Americans said they were not interested in getting vaccinated, which was relatively unchanged from a similar poll that ran in May. But foreshadowing the social challenges that may emerge as the United States begins to pull out of the yearlong pandemic, the latest poll showed a majority of Americans want to limit the ways in which unvaccinated people can mix in public.
Brief: In the first part of the year, the vaccine rollout is supporting a robust economic recovery and global central banks continue to operate very loose monetary policy. This scenario favours the emerging markets (EM) asset class, which is relatively well placed to benefit from the global 'reflation' trade. We are, however, mindful of the impact of higher US Treasury yields (and especially a rapid rise) on EM fixed income, especially some of the higher quality parts of EM. This is because the credit spread in this EM sector is insufficient to absorb the total return drag implied by a sell-off of US Treasuries. Today, higher yielding EM is better placed to navigate these challenges, although even in this asset class it is important to differentiate between the high yield EM sovereigns with positive credit stories and those with impaired balance sheets and a weakening outlook Another positive driver for EMs is the new US President. The Biden administration is, on balance, supportive for EM as it implies more international co-operation and less isolationism. Yet, the stance towards China is unlikely to change very much and remains a source of risk while attitudes to Russia may also become harsher.
Brief: The number of private equity buy and build transactions in the UK rose by 35 per cent during 2020, as private equity houses looked to bolster their portfolio during the Covid-19 pandemic, according to research by Rickitt Mitchell. Analysis by the corporate finance boutique, in partnership with Experian Market iQ, reveals that a total of 370 bolt-on transactions were completed in 2020 – up from the 276 seen over the course of the previous year. The bounce back following the Covid-19 pandemic is highlighted by the active second half of 2020, with 232 transactions completed during that period. In contrast, just 46 deals were completed during the second quarter, at the height of the national lockdown. Despite the rise in volumes, the total value of transactions fell by a small portion over the last year. GBP1.2 billion of deals were completed in 2020, just lower than the GBP1.3 billion seen in 2019, which further highlights the trend of bolt-on deals during this period, which typically have smaller average values than other deal types.