Brown’s moral attack on finance too intermittent 30 Sep 2009 The UK premier has again stressed the danger of amoral markets. But he doesn t seem to have pushed world leaders to discuss the goods and evils of finance at last week s G20. That s too bad. The vocabulary of virtue has been sadly absent from the global debate.
Italian banks buy time while shunning Tremonti 30 Sep 2009 UniCredit has got a E4bn rights issue underwritten. That fixes its capital needs, although pricing and timing are hazy. Intesa is to sell E1.5bn of hybrid bonds, buying it time and flexibility. And both banks have avoided the interference that would have gone with state support.
France SA’s flawed governance summed up in Veolia 30 Sep 2009 Directors of the French water company have submissively approved Henri Proglio s wish to retain his chairmanship despite being appointed chief executive of energy group EDF. His dual roles raise serious governance concerns. That board members acquiesced is typical and a shame.
Ken Lewis finally bows to the inevitable 30 Sep 2009 The BofA boss s mishandling of the Merrill merger kicked off an embarrassing and potentially harmful series of distractions. His belated retirement should clear the air somewhat. And it may allow his successor to capitalise on a promising franchise depending who gets the nod.
Bharti-MTN better apart than in half-baked union 30 Sep 2009 South Africa s insistence that MTN must retain its national identity has proved an immoveable obstacle to the telco s proposed $22bn shareswap with Indian rival Bharti. With no guarantee the tieup would ever lead to a fullblown synergistic merger, terminating talks is wise.
CIT will struggle to sell its soul twice 30 Sep 2009 The troubled business lender pledged nearly all its assets to secure lastditch funding in July. Now it faces a deadline to restructure its $30bn debt load. The odds are against it: junior lenders are unlikely to accept anything but bankruptcy or the functional equivalent.
FDIC needs prevention as well as cure 29 Sep 2009 The US agency may tap banks for three years of advance premiums to top up its depleted deposit insurance fund. Yet 90% of banks paid no assessments when their profits were healthy. This procyclicality punished the prudent and rewarded risky lenders.
EBRD cash call is right, but also self-interested 29 Sep 2009 The European Bank for Reconstruction and Development wants to tap its 61country membership for E10bn to drive lending in eastern and central Europe. The plan is both welcome and worrying. And it suggests that the EBRD sees the crisis as a chance to bolster its mandate.
Yen strength doesn’t help deflating Japan 29 Sep 2009 The yen is strong but the Japanese economy is weak. The new government should try to put doubts in traders' minds. But it has more profound economic challenges after years of expensive and ineffective stimulus plans. Japan s quandary is also a warning for the West.
Dimon sacrifices Winters for greater good 29 Sep 2009 The JPMorgan boss is rightly planning his succession. A shakeup leaves Jes Staley a veteran, though lacking retail experience as heir apparent. Bill Winters an architect of the investment bank s success will leave. That s a loss. But Dimon was smart not to dawdle.
Chinese rivalry for oil assets has silver lining 29 Sep 2009 Iraq, Argentina, and now possibly Nigeria. Chinese energy groups are seeking mega oil assets in risky places. They may look like an increasing competitive threat to Western oil groups. But their interest is not all bad news for the majors. The Chinese could also be good partners.
Tui Travel pays up to win convertible contest 29 Sep 2009 A busy day for new issuance in convertible bonds saw tour operator Tui Travel up against steel maker Salzgitter. Despite Tui Travel s weaker balance sheet, keen pricing made its issue more successful. Higherrisk credits are once again welcome in convertibles land at a price.
Banks should face liquidity stress-tests 29 Sep 2009 The UK may ask its banks to detail contingency plans for coping with another liquidity crisis. As wholesale markets thaw, and global regulators struggle to update liquidity rules, such a move would be a welcome antidote to complacency. Other countries should follow suit.
Steady BBVA suffers shaky reshuffle 29 Sep 2009 The Spanish bank has had a decent crisis, but its wellregarded chief Goirigolzarri is departing unexpectedly. The head of risk is leaving too. Chairman González seems to be consolidating power with an unproven crony as the new daytoday boss. Investors could be right to worry.
BNP’s liberation is not the start of a revolution 29 Sep 2009 The French lender is freeing itself from state shackles with a painless rights issue. Domestic peers could follow suit. But German, Irish, Swiss and UK recipients of state assistance are some way from similar moves. Government involvement in European banks is nowhere near over.
BNP Paribas jumps queue with E4.3bn capital hike 29 Sep 2009 France's largest bank is raising equity to buy out state preference shares before they become even more expensive. Domestic rival SocGen, another recipient of government cash, must be kicking itself. With markets in generous mood, BNP has wisely seized a firstmover advantage.
Xerox has tough sell with $6.4bn ACS deal 28 Sep 2009 The US office equipment company is the latest to try and snap up a business services firm. It will have to convince its shareholders that this isn t a case of metoo corporate strategy. That may be difficult. The purchase price is high and the synergies are unconvincing.
Sterling may go to euro parity – for good or ill 28 Sep 2009 The euroapound line is in sight for the second time in a year. There are so many reasons for sterling to fall, from money printing to a willing central bank. A weaker pound will eventually help exports. But with the UK's finances as they are, the drop could go too far.
Merkel gets clear mandate for muddled platform 28 Sep 2009 The incumbent chancellor will lead the government she wanted: a coalition of her Christian Democrats with the economically liberal FDP. In theory, the end of the grand coalition with the Socialists opens the path to reforms. But it's far from certain Merkel wants to follow it.
Dividend might keep Ryanair out of trouble 28 Sep 2009 The European budget carrier has the sort of problem other airlines dream of too much cash. But its E2.8bn provides firepower that can easily be misdirected, as in Ryanair s stake in Aer Lingus. Shareholders should clamour for the cash and discipline that come with a dividend.
Abbott’s E4.5bn Solvay deal a good use of offshore cash 28 Sep 2009 Against some ambitious recent deals, the US healthcare company's purchase of the Belgian chemical group s drug arm looks boringly sensible. At two times sales, the price is right. It s better than leaving the cash sitting in overseas banks, too.
G20 shows signs of flagging 28 Sep 2009 If only half the vague commitments made in the Pittsburgh global summit are kept, the world would be much better off. But don t be too hopeful. As the crisis fades, rhetoric is replacing substance. It looks like a new crisis could be required to force some necessary changes.
Retirement is latest pooper at US fiscal party 28 Sep 2009 Social security may run a cash deficit in 2010 and 2011. That wasn't supposed to happen until seven years later. Early retirement by babyboomers would reduce the longterm burden on the social security trust fund. But the short term cash outflows would worsen budget shortfalls.
Bankers can sleep easy with G20 bonus fudge 28 Sep 2009 The world leaders offered an endorsement of their guidelines on bonuses, and promised to monitor the situation. But the banks are ready to justify big payouts with arguments the politicians are willing to believe. It looks like an opportunity for reform is being squandered.
Smartphone makers not all better than average 25 Sep 2009 Basic mobile phone handset sales have matured. So manufacturers tout the prospects of their advanced models. Investors seem to think every firm can sew up the market. The lukewarm quarterly report from BlackBerry maker RIM signals more disappointments ahead for the credulous.
M&A rebound still mostly promise 25 Sep 2009 Cadbury, Disney and other headlinegrabbers may have made it feel like the merger business was back. Thirdquarter numbers tell a different, duller story. Surging share prices didn t inspire many bosses to act. They may be waiting for the economy to catch up with the market.
New UK bank insurance boss has tricky task 25 Sep 2009 Stephan Wilcke has lots of credit experience. He ll need that and more as head of the government s scheme. He has to cajole RBS and Lloyds to come in, and set up a firstclass operation. But the toughest job will be to ensure his agency can be wound down when markets recover.
HSBC inches awkwardly towards the inevitable 25 Sep 2009 The chief executive of the AngloAsian lender is moving from London to Hong Kong, nearer the bank s future growth and toughest regulatory discussions. But the chairman and finance director are staying in the UK. This may leave shareholders on both sides feeling shortchanged.
ITV finally gets something right in governance 25 Sep 2009 The struggling UK broadcaster won t appoint Tony Ball as chief executive after the TVwhizz objected to a potential chairman. The board made a good call CEOs shouldn t get effective veto rights on their bosses. For ITV, the move is a break from its awful governance record.
Chavez reaps big benefit from global stimulus 25 Sep 2009 Venezuela's strongman accuses the US and others of exploitation. But the return of liquidity has encouraged him to borrow $5.7bn locally and $4bn abroad and brought $46bn of energy commitments from Russia and China. The opportunistic Chavez is grabbing money while it s there.