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Sunday, 21 December 2014

BREAKINGVIEWS

Pharmaceutical tablets

Roche double blow increases dealmaking pressure

19 December 2014

The pharma group has suffered two big drug failures. The setback over Alzheimer’s is no shock—the disease has been a money loser for big pharma. A second knock in Roche’s core cancer franchise hurts more. The failures will increase pressure on Roche to deploy excess cash.

Cans of soda are displayed in a case at Kwik Stops Liquor in San Diego, California.

Activists may take the Pepsi, and Coke, challenge

19 December 2014

Thanks to stagnant sales the world’s top soda makers – with $300 bln of combined market cap – already attracted agitators in 2014. Now Pepsi is risking a proxy fight over billionaire Nelson Peltz’s break-up plan. Coke, too, may face a radical shake-up if it can’t reignite growth.

European Central Bank (ECB) President Mario Draghi addresses an ECB news conference December 4, 2014.

ECB sours QE plans to keep Germany sweet

19 December 2014

The central bank will buy sovereign debt – but each national government may have to set aside provisions in line with their own risks, Reuters says. It may secure German approval. But it would also weaken quantitative easing, and highlight a fragmenting euro zone.

Hong Kong's former chief secretary Rafael Hui sits in a car as he leaves during a lunch break at the High Court in Hong Kong December 16, 2014.

Tycoon graft trial shows HK law worth fighting for

19 December 2014

A former official and a property mogul have been found guilty of charges relating to misconduct in public office. The transparency, unpredictability and lack of a neat ending make it very different from similar cases in mainland China. That’s just the way rule of law should be.

A tuna swims among a school of fish as a scuba diver looks on at Galapagos Marine Reserve August 19, 2013. Picture taken August 19, 2013.

Thai Union sets right flavour for Asian food M&A

19 December 2014

When little-known Asian buyers pounce on foreign companies, the resulting deals are often overpriced or lacking in strategy. The $1.5 bln Thai purchase of U.S. tinned seafood company Bumble Bee swims against the tide. Thai Union’s focused, low-key approach has lessons for others.

Leon Black, Chairman and CEO Apollo Global Management.

Dry powder may explode in buyout barons' faces

18 December 2014

Everything is going up in private equity except deal volume. Acquisition multiples are at a record high, as is competition from corporate buyers. For big firms such as Apollo and Blackstone, $1.5 trln of purchasing power may be tough to deploy without cratering returns.

Signs explaining Federal Deposit Insurance Corporation (FDIC) and other banking policies are shown on the counter of a bank in Westminster, Colorado.

U.S. bank watchdog judging cost cuts just right

18 December 2014

The FDIC’s latest belt tightening means its budget is now 42 percent lower than at its peak. With the OCC warning of lower lending standards, that might sound worrisome. But the FDIC’s actually shifting resources to where they’re needed most – a sign it’s learned from the crisis.

Steven Maijoor, Chairman of the European Securities and Markets Authority (ESMA)

Research reform starts here for Europe's investors

19 December 2014

Regulators are to unbundle charges for financial analysis and trading in Europe. Greater transparency is welcome. But buyside and sellside alike will be cheered that asset managers can still charge research to clients. Determining value for money may be tricky for end-investors.

Deutsche Bank

Deutsche strategy rejig may presage CEO succession

19 December 2014

The German bank is set to review its direction in 2015. Its bet on capital markets remains unproven. Likely regulatory settlements in the coming months could raise further doubts. Recent executive moves suggest Deutsche is keeping options open for strategy and leadership change.

A firefighter uses a water cannon to clean a statue of late Chinese Chairman Mao Zedong at Zhongshan Square in Shenyang, Liaoning province March 30, 2013. Picture taken March 30, 2013.

China needs history's biggest spring clean

19 December 2014

Reforms targeting reckless lending, homebuilding and graft have stopped the mess getting worse. Behaviour won’t really change until China deals with its backlog of bad debts, empty houses and dirty secrets. This would be a good year to sweep the skeletons from the closet.

SoftBank Corp. Chief Executive Masayoshi Son (R) waves with the company's human-like robots named 'pepper' during a news conference in Urayasu, east of Tokyo June 5, 2014.

Goodbye tech conglomerates, hello "ecosystems"

19 December 2014

Companies have been using that word to justify building internet-based empires out of a mish-mash of assets with hard-to-identify synergies. Asian players like China’s Alibaba and Japan’s Softbank are amongst biggest fans of this unhelpful jargon.

A robot transfers materials into "wells" on a microtiter plate before a test at biotech company Genkyotex's headquarters in Plan-les-Ouates in Geneva July 26, 2013.

Rampaging animal spirits birth biotech unicorn

18 December 2014

The public offering of Juno Therapeutics presents an apt finale to the best year for biotech IPOs. It’s only a year old and revenue free, but its cancer fighting technology is hot. Juno’s $2 bln valuation shows capitalism’s ability to catalyze investors’ hopes and resources.

Russia

Putin takes up residence in alternate reality

18 December 2014

The Russian president insists that prosperity is around the corner if his countrymen can only endure another two bad years. But as sanctions and weak oil prices push Russia towards recession, no serious reform is in sight. Putin’s optimism should be a cause for serious pessimism.

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Features

Quentin Webb

Review: An Icelandic tycoon’s sorry saga

19 December 2014

Thor Bjorgolfsson embodies Iceland’s volcanic rise and fall. He made a fortune in post-Soviet Europe, lost a bank in 2008 and caused Deutsche Bank years of grief with Actavis. This deal junkie’s memoir is self-critical in parts - but unlikely to win many new friends in Reykjavik.

Columns

Edward Hadas

Edward Hadas: Dubai the global microcosm

19 December 2014

The emirate is rightly seen as extraordinary for its rapid growth in population and wealth. But it also brings into sharp focus the global inequality of income, the materialism of modern economies and the trend to trust an all-knowing, all-powerful government.

Rob Cox

Rob Cox: Sony email shareholders would like to see

17 December 2014

The hacking scandal at the Japanese conglomerate’s Hollywood studio isn’t just embarrassing. It’s a business problem for a company already struggling to turn itself around. Herewith, a fictional selection of internal messages Sony’s board ought to be fielding.