Apple may bury hatchet with Google – just not yet 31 Aug 2012 It’s no shock their chiefs are talking. The iPhone maker’s sweeping U.S. patent win over Samsung and its Google-run devices is a blow to the search giant too. But the rivals’ clashing business models make peace difficult. Apple may first try to push its legal edge a bit further.
U.S. political prattle gives markets just a morsel 31 Aug 2012 The Republican powwow boiled down to a pep rally for Mitt Romney, not an occasion to unveil platform specifics. Expect similar vagueness from the Democrats next week. Investors needn’t fret, though. Rhetoric will reign until debates force candidates to flesh out detailed plans.
Argentina’s new YPF out to prove it’s no PDVSA 31 Aug 2012 Repsol’s old stake in the energy company was snatched by the government. But now YPF is touting itself as a well run, commercial operation. It wants to borrow in international markets and needs partners like Exxon and Chevron. They have a chance to strike decent deals.
Review: the two-sidedness of a richer China 31 Aug 2012 Rising incomes offer rich opportunities for foreign marketers, as consultant Shaun Rein explains. But richer Chinese are more demanding customers for multinationals, which will also find the challenge from domestic rivals more daunting. Wealth isn’t ending political risks either.
Calculator: Glencore-Xstrata from first principles 31 Aug 2012 Commodity prices have dipped and the two miners have posted results since announcing the merger back in February. With Xstrata shareholders readying for a Sept. 7 vote, this calculator looks at how the deal stacks up based on estimates of each company’s fair value.
China’s burdened banks can’t stop the slowdown 31 Aug 2012 After the 2008 slump, banks helped to stimulate the economy by doubling their loan books in three years. China needs another dose, but now lenders’ balance sheets are too clogged up for them to offer much help. That leaves two options: set banks free, or bind them even tighter.
Regulator role will crown Draghi’s happy summer 31 Aug 2012 Brussels is set for a predictable compromise with EU members over an expanded role for the ECB: direct regulation of systemic euro zone banks, with indirect oversight over smaller lenders. Mario Draghi will then have the toolbox he needs to do “what it takes” to save the euro.
Moody’s keeps euro zone bailout 2.0 on trial 31 Aug 2012 The agency’s decision to delay a potential Spanish downgrade reduces the danger of a junk rating that would spook markets. Moody’s wants to see if the new bailout-lite, complete with ECB bond buying, can revive investor confidence. That keeps Spain - and the ECB - under pressure.
How can India’s Sahara pay back $3 bln? 31 Aug 2012 India’s Supreme Court has ordered the group to refund cash it raised from millions of small investors, plus interest. That’s a victory for the little man. The next question is how the sponsor of India’s cricket team and owner of New York’s Plaza hotel can comply with the ruling.
Put Dylan’s tangled bond in the credit watchtower 31 Aug 2012 Goldman Sachs is said to be working on a tiered bond secured on Bob Dylan royalties. Investors’ blood may run for the freewheelin’ early tracks. Modern times material may be attractive too. But the street rocking 1980s stuff could leave junior creditors blowing in the wind.
New rules help Citi get off easy in CDO payout 30 Aug 2012 The bank’s $590 mln settlement with shareholders seems big, but it’s modest next to sums extracted in past scandals. One reason is courts have recently made it tougher for investors to sue. That may shield some financial rogues, but it helps ensure only true victims get paid.
Does a Wall Street M&A addict ever retire? 30 Aug 2012 Eric Gleacher, a veteran of the landmark RJR and Revlon buyouts, may sell his eponymous advisory firm - again. The former Lehman and Morgan Stanley mergers boss has sold and bought it before. At 72, an exit could be his swansong. Or maybe Gleacher just lives for doing deals.
Angola’s rare oil success isn’t fixing governance 30 Aug 2012 Unlike, say, Venezuela or Mexico, the African nation has doubled oil output since 2001. That has boosted GDP per capita, but corruption and human rights abuses are holding the economy back. Sadly for Angolans, the likely re-election of the 33-year president won’t change that.
Barclays’ new CEO will need to work doubly hard 30 Aug 2012 Retail chief Antony Jenkins is a welcome antidote to the UK bank’s gung-ho ex-boss Bob Diamond. But he still has to steer its powerful investment bank onto a more sustainable path. And it would have been easier for an outsider to make a break with Barclays’ past misdemeanours.
Fraud probe could turn Qatar cold on Barclays 30 Aug 2012 The Gulf state’s sovereign fund might seek to distance itself from Barclays after the UK’s Serious Fraud Office launched an investigation into the bank’s links with its major shareholder. Qatar may not like the reputational damage. That could mean unwinding a 5 bln pound bet.
Captain Austerity lurks in shadows of GOP fiesta 30 Aug 2012 Nobody is uttering the A-word from the podium of the Republican convention in Tampa. But between the lines of speeches and in private conversations there’s little doubt that European-style belt-tightening will be required for Romney to fulfil his promise of fixing America’s finances.
Arctic debacle underlines Gazprom’s weaknesses 30 Aug 2012 The Russian energy giant has shelved plans to develop the giant Shtokman offshore field, all-but-killed by cost overruns and the shale gas revolution. The demise of the flagship development is a sign of the company’s waning strategic heft. Reversing that may prove impossible.
Oil’s climb raises risk of Asian stagflation 30 Aug 2012 Growth is slowing, but crude has climbed by a quarter in the past two months. That’s not good for energy-hungry Asia, which relies heavily on imports. Higher fuel costs could keep inflation high, making it more difficult for central banks to cut rates as economic growth slows.
Death of “Made in China” is greatly exaggerated 30 Aug 2012 Rising wages have put pressure on all manufacturers in China. Yet lower commodity prices have helped the likes of Samsonite to boost earnings. The yuan has also stopped rising. Those who can use automation to keep costs low can still gain from staying in China.
GOP should be careful what it wishes for with Fed 29 Aug 2012 “Bye bye Bernanke” is one rallying cry at this week’s Republican convention. It’s a good sound-bite, but it comes over as an attack on the U.S. central bank’s cherished independence. A more constructive tactic would be to outline how the GOP thinks the Fed should be constrained.
Ex-FBI boss may land on GOP most-wanted list 29 Aug 2012 Louis Freeh, who has led high-profile probes at MF Global and Penn State, is merging his law firm with a bigger shop. It makes business sense and the timing looks opportune. Though it may be coincidence, Freeh would enhance the law-and-order chops of a Romney administration.
Obama’s gas guzzler curbs trump drill baby drill 29 Aug 2012 The White House is doubling fuel efficiency for U.S. vehicles. That’s more likely to cut drivers’ costs and reduce dependence on foreign oil than Romney’s crude exploration plan. But hiking the gas tax would be the smartest way to tackle America’s overreliance on Black Gold.
Quebec separatism not an economically foolish idea 29 Aug 2012 Coming elections could return to power the political party that lost independence referendums in 1980 and 1995. Though the impulses of Parti Quebecois may be cultural, an independent Quebec would boast abundant resources and a surplus of clean energy. It could potentially be rich.
Ethical economy: The smog of development 29 Aug 2012 Bad economic analysis has contributed to China’s bad pollution. More dangerous air and water can make financial measures look healthier, and the environment doesn’t feature in standard growth models. A better approach requires the study of political and economic institutions.
Glenstrata deal gap is harder than ever to bridge 29 Aug 2012 Xstrata investors are digging in. Yet Glencore has less scope to up its offer after the miners’ interims. Without the retention bonus row, the obstacles may not have got so big. Xstrata’s hold-outs need to believe in its standalone value: that’s probably all they’ll be left with.
UK needs a permanent, property-based wealth tax 29 Aug 2012 Nick Clegg, the UK’s deputy prime minister, has suggested a temporary emergency tax on the wealthy. That’s better than taxing income excessively, but a one-off hit is not what’s needed. Property taxes should be brought up-to-date. On this topic, the government is lagging.
Old grudges don’t change Sino-Japan potential 29 Aug 2012 Forty years after the two countries declared relations “normal”, they seem anything but. A clash over contested islands has produced foolish rhetoric from Tokyo and angry protests in Chinese cities. Yet economic ties are a success. More gains will come if cool heads prevail.
Thais belly up for bigger gulp of Heineken’s cash 29 Aug 2012 Thai Beverage has raised its stake in Singapore’s Fraser & Neave close to 30 percent. Its billionaire founder may be trying to block Heineken’s $10.9 billion offer for Asia Pacific Breweries. But it’s more likely he’s just angling for a larger share of the Dutch brewer’s payout.
Poor governance creates Indian “robber barons” 29 Aug 2012 When the government is likely to change contract terms, investors in infrastructure have good reasons to take money when they can. Indians should be angry about the New Delhi airport operator’s alleged $4.3 billion real-estate loot, but the government deserves most of the fury.
Tourism, tax crucial to Myanmar’s future 29 Aug 2012 An influx of visitors, if reasonably well managed, can bring dollars and the right kind of attention to the Southeast Asian country’s long-suffering people. Longer-term investment and far better government are also needed. The glaring need to lift tax revenue could affect both.