Taiwanese election cycle may boost equities 31 Oct 2007 Its stock market tends to rally in the months before presidential elections, like the one set for March. But the market looks attractive even apart from this technical trade. It has plenty of exposure to growth in China and the tech sector but with reasonable valuations.
Grocers unscathed by UK competition probe 31 Oct 2007 The regulator has confirmed what was already clear. Supermarkets give shoppers a good deal, and real estate rather than size is their most powerful weapon. Tesco s past land grab may explain its present dominance. But the regulator should be wary of trying to remedy the situation.
Alcatel-Lucent needs a real boss 31 Oct 2007 The latest turnaround plan for the troubled FrancoAmerican telecoms group isn't radical enough. Nor is its strategic thinking clear. That's partly because CEO Pat Russo has to deal with a 24member board and a chairman who reportedly meddles.
Why would anyone invest in a gold hedge fund? 31 Oct 2007 The longterm case for bullion may be powerful. But why pay hedge fund fees for access to a new Londonbased gold fund? It's a lot cheaper just to buy the metal.
Wall Street boutiques show up their bigger brothers 31 Oct 2007 While larger rivals suffer in creditmarkets hell, Greenhill and Lazard are posting bumper profits and their stocks are near record highs. An M&A slump would hurt, but it s easier to spot than a blowup in murky mortgages. That s why boutiques trade at a premium.
IAC breakup gives Diller leverage with Malone 31 Oct 2007 The two media moguls are fighting over how to unwind their partnership in IAC. Malone owns a $2bn stake and wants IAC s cable shopping channel, HSN. Diller may want Malone off his back. But shareholders would only be served if Malone pays a premium for HSN. Spinning it off makes this more likely.
Stan O’Neal’s exit by the numbers 30 Oct 2007 The former Merrill Lynch boss leaves with a $160m compensation package. That equates to almost 20 cents a share. Put another way, he s keeping a 2% fee for overseeing $8.4bn in writedowns. Lucky him. Merrill shareholders, though, would have been better off buying the S&P 500.
What price S&N’s Russian crown jewel? 30 Oct 2007 Carlsberg s bid for the UK brewer puts an implied price of £4.2bn on S&N s half of BBH, their joint venture. That's cheeky. Given BBH's fast growth and strategic importance, £5bn looks more reasonable. To get there, Carlsberg would need to raise its bid to 800p.
Housing bailout squawking will probably work 30 Oct 2007 Countrywide chairman Angelo Mozilo s call for a housing bailout is selfserving, since lenders created the mess. However electionyear images of sympathetic defaulters facing foreclosure in a declining market makes public support inevitable. The later, the better.
Merrill directors must show more mettle 30 Oct 2007 They dropped the ball during Stan O Neal s reign, and have let him call his exit retirement. But the Wall Street firm s board could regain credibility by drafting tighter terms for his successor and exercising control say by splitting the chairman and CEO roles permanently.
UBS gets ready for a less profitable future 30 Oct 2007 The Swiss bank took $4.4bn of losses on US mortgages in the quarter, with more likely to come. The new CEO wants less risk, but the balance sheet has moved in other direction, thanks to the mortgage debacle. Investors can look forward to lower returns on fewer assets.
Dubai group gives Och-Ziff a helping hand 30 Oct 2007 An investment vehicle for the emirate s ruling family has agreed to buy into the hedge fund firm s forthcoming IPO to the tune of $1.26bn. With no price discount and a full valuation, OchZiff looks to have got the best of the negotiation.
Alt-asset managers seek SWFs for long-term relationships 30 Oct 2007 OchZiff is selling a stake to Dubai International. Three buyout firms are talking to China's Social Security Fund. The relationship between financial services firms and sovereign wealth funds won t and shouldn t stop here. There are benefits for both.
High oil prices will produce spectacular waste 30 Oct 2007 Saudi Arabia plans to spend a heroic 30% of GDP on construction. It leads the field of oil exporters, but is far from alone in setting off on a prolonged spending spree. Much of the money is likely to be wasted as will become clear when prices slump.
Ratings debacle will gore Wall Street’s cash cows 30 Oct 2007 The precipitous downgrade in some cases to junk of hundreds of formerly AAArated CDOs will strangle many new products in the crib. Ratings agencies have proven their imprimatur on products with short track records is not to be trusted.
The house price slip might soon be quick 29 Oct 2007 UK house prices fell by a tiny amount in October, and by a little more in London and other expensive markets. But vanishing buyers and dropping asking prices suggest the market s slip could easily turn into a slide.
Markets expect near-miracles from Fed 29 Oct 2007 The prospect of an interest rate cut this week has helped push stock markets up. That shows a touching faith in the central bank s ability to guide the US economy to noninflationary growth. It s possible, just. But there are many pitfalls along the path.
Xstrata tries nickel again with $3bn Jubilee offer 29 Oct 2007 The AngloSwiss miner was outbid for Canada s Lionore. But it's agreed to pay a higher multiple for an Australian rival. Nickel is still appealing, despite falling 40% from its peak. That means that Xstrata could get outbid again, even with 18% of the shares locked up tight.
Why Qatar should check out of Sainsbury’s 29 Oct 2007 The Gulf state s bid vehicle wants £500m more cash to carry off the UK supermarket group. It would be better if the sheikh said no. He may not do so, of course. But Qatar s reputation and coffers are unlikely to be served well by this overpriced deal.
A-Rod should take a stake in the Cubs 29 Oct 2007 The highest paid player in major league baseball is walking away from his contract with the New York Yankees. It s going to be difficult for him to boost his salary much beyond his last $252m deal. He could, though, if he takes an equity stake in a team like the Chicago Cubs, which Sam Zell is trying to sell.
Mifid is no monster 29 Oct 2007 The EU s Markets in Financial Instruments Directive has an ominous sound to it. But it will make it cheaper to borrow and trade stocks. There will be costs and added paperwork, but most businesses should profit and consumers win. London's City should be the biggest beneficiary.
Argentina turns to Cristina for more of the same 29 Oct 2007 Cristina Fernandez has easily won Argentina s presidential election on the back of her husband s populist economic policies. But the inflationary consequences of those policies are beginning to appear. Only by changing course can the glamorous Fernandez avoid an ugly fate.
Chinese internet groups don’t need Nasdaq any more 29 Oct 2007 Many Chinese internet companies have chosen to list in New York over Hong Kong or Shanghai. Nasdaq simply attracted a deeper pool of capital. The stunning $1.5bn float of internet auction firm Alibaba has turned this equation on its head.
Merrill needs to quickly restore confidence 28 Oct 2007 Stan O Neal s blundering approach to Wachovia may have been the last straw for Merrill s board. But the firm s fiasco of thirdquarter losses and continuing large exposure to subprime and CDOs relative to its capital base creates far bigger worries. Concerns about Merrill s financial strength can be calmed by replacing O Neal with an outsider who sports strong fixedincome skills like Larry Fink, Bob Diamond or John Thain.
Iran sabre-rattling will test market confidence in US 26 Oct 2007 America s decision to impose sanctions unilaterally on Iran is an economic gamble as well as a diplomatic one. The US invaded Iraq with a strong dollar behind it and no real global rivals. That s not the case now. Dwindling confidence in America could have financial repercussions.
Northern Rock debacle turns into celebrity auction 26 Oct 2007 Who would want to be associated with a lender on government life support? UK heavyweights, it seems. Former RBS boss George Mathewson has signed up with Virgin, and JC Flowers has countered with wellconnected Paul Myners. Why join? There could be profit and political kudos.
Personal view: Football 26 Oct 2007 Londoners should learn to like American football: Sunday's Giants versus Dolphins game at Wembley Stadium probably isn't at the top of the typical City banker's weekend agenda. But John Christy argues why it should be.
Rangel plan simplifies tax code – is thus doomed 26 Oct 2007 The liberal Congressman s tax plan abolishes the alternative minimum tax, taxes alternative asset managers like normal people and lowers the corporate tax rate, all while remaining revenue neutral. As such, it deserves respectful analysis and passage without major modification. It won t get it.
Why didn’t Facebook just go public? 26 Oct 2007 The social networking site raised $240m from Microsoft and may pull in $500m more. That s an unusually large VC round. The reason lies in its hugely successful cultivation of thirdparty software developers. That makes the site sticky, but creates huge risks. Until these are under control, Facebook shouldn t go public.
BPI’s return approach to BCP looks opportunistic 26 Oct 2007 The Portuguese bank has got the timing right to try a cheeky merger with its larger rival. BCP has been an unsteady ship since its bid for BPI foundered. But the deal isn't a foregone conclusion. As Portugal's biggest bank, with assets in the fashionable Polish market, BCP may attract deeppocketed foreign suitors.