Germany hopes to mutualise banking woes 31 Oct 2010 The German government is proposing a European approach to a banking resolution fund. But after Berlin refused to agree on a Greek bailout, EU members with stronger banking systems than Germany won't like being asked to help sort out a financial mess they didn't cause.
Japan deals Nomura a triple blow 29 Oct 2010 Robust trading was overshadowed by a slump in the Japanese retail brokerage and the strong yen. Worse, a tax hit knocked Q2 earnings by 93 percent. Nomura's international bankers are finally gaining traction. That must make their Japanese straitjacket all the more constrictive.
UK’s mid-tier bankers lose out on housing ladder 29 Oct 2010 Before 2007, a banker with a l00,000 pound salary and 500,000 pound bonus could get a 1.5 million pound mortgage. Postcrunch, bonus curbs and cautious lenders mean the same pay may only secure a 600,000 pound loan. Bankers may have to relearn a lost art saving for a deposit.
Rohatyn’s values a distant prospect on Wall Street 29 Oct 2010 The Lazard oldtimer and savior of New York reveals surprisingly little of himself in a new memoir but he does exhibit a relatively unobtrusive ego, a love of dealmaking and a distaste for the greed of the 1980s and 2000s. Sadly, his tenets are unlikely to regain much ground.
BA shows it’s safe to be an airline again 29 Oct 2010 The UK airline swung to a profit thanks to rising ticket prices. The impact of its joint venture with American Airlines is kicking in, and the merger with Iberia is on track. But economic recovery is still fragile, and the good news may already be priced in the shares.
Pennsylvania’s shale ban shrinks resource havens 29 Oct 2010 The state s lameduck governor halted issuance of new Marcellus drilling leases after a new gas tax failed. The moratorium probably won t stick, but could give others ideas. Throw in Oz s mining levy and it seems resources firms must now account for political risk most anywhere.
U.S. economy awaits election storm, split or rally 29 Oct 2010 More Republicans are on their way to Capitol Hill. But the size of the midterm victory matters. Whether the newly numerous GOP takes one house of Congress, both or falls just short in each will impact taxes, trade, jobs and, perhaps, Obama s chances at reelection in 2012.
AIA surge offers some consolation to Prudential 29 Oct 2010 Following a firstday pop, the Asian insurer is now worth as much as its UK rival's failed bid in March. Pru's management may feel vindicated, though a deal would have faced integration and regulatory risks. At least AIA's success will help lift the value of Pru's own Asian arm.
Potash looks like Cadbury, without the chocolate 29 Oct 2010 The Canadian fertilizer group s battle against BHP resembles the one Cadbury waged before folding to Kraft. The similarities include lack of competing bids, noisy politics and antsy shareholders. Barring a government shocker, it s hard to see a wildly different outcome.
American economy exhibits unhealthy zombie look 29 Oct 2010 Thirdquarter GDP shows imbalances rising. The gain in chained dollar GDP was equaled by the growth in net imports and exceeded by the rise in inventories. Consumption was solid but government spending rose sharply as the savings rate fell. It s not an altogether pretty picture.
Will Halliburton shoulder 15 pct of BP’s mess? 28 Oct 2010 The contractor's loss of $3 bln of market value, on charges it did a shoddy job in cementing the BP rig that cracked, suggests investors expect the contractor to pay a big slice of BP's $20 bln cleanup fund. That's possible but don't count on it.
GM sprinkles IPO with deftly timed debt sweeteners 28 Oct 2010 Weeks before its share sale the carmaker is using cash and stock to erase $11 bln of liabilities. That bolsters the balance sheet and frees up $500 mln in interest payments. It also allows investors to focus less on GM's financial issues and more on its core business.
ICBC shows how to make a monster 28 Oct 2010 China's biggest bank is highly capitalised, its bad debts remain low and deposits have grown in double digits this year. ICBC's market capitalisation is almost twice that of U.S. giant Citi. Such size and stability speak volumes about the distortions in China's banking system.
Blackstone value now hinges more on sentiment 28 Oct 2010 Stephen Schwarzman's buyout firm has outperformed the stock market rally. So on a fundamental analysis the shares may look fully priced. Yet equities bulls may reap more beta from Blackstone. Whether the big paper gains highlighted in Q3 can be realized is the gamble.
Emerging-market bonanza gives home team advantage 28 Oct 2010 Investors hungry for yield and protection against a sagging dollar have this year gobbled up $23 bln of bonds in developingcountry local currencies. Some may be forgetting one key point amid the frenzy. If things go bad, sheriffs playing by different rules will lay down the law.
Exxon needn’t rush to win back gloomy investors 28 Oct 2010 The oil giant's shareholders have been sulking since last year's purchase of gas firm XTO. Another forecastbeating quarter was never going to restore the romance. Exxon could woo investors with higher buybacks. But restraint and patience may be a better longterm strategy.
New Jersey becomes unlikely blueprint to governors 28 Oct 2010 Against many odds and strong opposition Chris Christie balanced this year s budget. He even killed an overpriced, if worthy, tunnel project. But pension cuts and budget obstacles still loom. His budgetary governance model shows promise, but needs further testing.
UniCredit shake-up bodes ill for investors 28 Oct 2010 The Italian lender's management reshuffle has prompted its investment banking chief to quit. Now chairman Dieter Rampl's future is also in doubt. After spending years trying to escape Italian meddling, UniCredit is in danger of being sucked back into the political mess.
Potash Corp results turn the screw on BHP 28 Oct 2010 The fertiliser group's strong Q3 numbers and bullish outlook add to the pressure on the miner to lift its $39 billion hostile bid or walk away. However, neither side has reason to show its hand until the Canadian authorities decide whether to allow the deal to go ahead.
Bluecrest calls time on hedgies’ onshore honeymoon 28 Oct 2010 The European hedge fund manager is closing a $630 million onshore fund after a 3.5 percent tracking error compared to the offshore fund it was supposed to mimic. The move shows how tight regulation may stop the fastgrowing, onshore sector matching oldschool offshore funds.
SGX’s investors should consider blocking deal 28 Oct 2010 Whatever the difficulty in gaining Australian approval for buying rival ASX, it might be thought SGX's own investors will be a rubber stamp. But the Singapore government, the largest, can't vote; the Tokyo Exchange, the second biggest, is doubtful; and others are nursing losses.
No relief in sight for Spanish banks 28 Oct 2010 Santander has effectively issued a profit warning on the back of stricter provision rules. It didn't offset the impact with the buffer of generic reserves a sign that the Spanish banking sector is facing bleak prospects. At least the larger banks can count on overseas profits.
Arnault’s derivative loophole must be closed 28 Oct 2010 LVMH's boss used cashsettled equity swaps in its swoop on Hermès. This crafty technique circumvented French disclosure rules designed to prevent creeping control of public companies. Given similar recent German and Swiss examples, it's odd France's watchdog didn't act sooner.
Larry Ellison’s anti-HP rant turns weirdly sloppy 27 Oct 2010 Oracle's boss is known for his acerbic tongue. Yet his latest grammaticallychallenged latenight missive daring HP's new CEO to show up in court looks downright bizarre. Perhaps the prospect of tougher competition with HP is getting under Ellison's skin.
Deutsche pulls ahead of i-banking pack 27 Oct 2010 The German bank navigated Q3 well, with most divisions making more money than in the prior quarter. Still, the Postbank deal leaves it with a tad less capital than peers, while still highly dependent on volatile ibanking. Its strong Q3 may not do much to boost its valuation.
Portuguese stalemate punctures euro zone calm 27 Oct 2010 The country's main political parties have failed to agree a new budget, ending the euro zone's bond market lull. Portugal is struggling with the strong euro and faces a hefty debt refinancing burden. Renewed turmoil may force the ECB to keep propping up Europe's weakest banks.
Lazard builds on Wasserstein’s legacy 27 Oct 2010 The legendary dealmaker whipped the firm into shape when he took the top job almost a decade ago. But fears his work would unravel after his death last year were misplaced. Under new CEO Ken Jacobs, advisory has stayed on track while money management achieved record revenue.
Arnault’s Hermès deal needs tough scrutiny 27 Oct 2010 Luxury group LVMH s announcement that it acquired a 17.1 percent in silkandleather goods maker Hermès looks at odds with French disclosure rules. LVMH says it fully complied with the regulation. If it s the case, the rules should change.
Conoco’s next chief executive needs some big ideas 27 Oct 2010 Punchy results show the U.S. oil major continues to dig itself out of its financial hole. With this year's rebound James Mulva can even boast superior returns since rising to the top in 2002. But with production ebbing, the 64yearold's heir will struggle to repeat this feat.
Not much common ground in BHP’s Potash bid 27 Oct 2010 The miner's $130ashare offer for the fertiliser group offers slim returns. But Potash Corp is probably worth around $148 even without a bid. Unless BHP finds some synergies, or persuades shareholders of its bullish longterm view, its chances of success look small.