The financial network’s global downtime may have been a problem only for the very rich – and a boon for City pubs. But it prompted the Bank of England to remind banks it’s there as a lender of last resort, raising questions about traders’ heavy reliance on a few fallible systems.
With the financial arm being jettisoned, the focus starting with Friday’s Q1 results is squarely on the industrial businesses. Valuing the pieces similarly to rivals, $276 bln GE carries a smaller but conspicuous conglomerate discount. Don’t expect it to shrink much more.
A Citigroup analyst has questioned Actelion’s exclusion of stock options from its chosen earnings measure. The Swiss biotech firm may be an outlier in Europe, but custom-made earnings are common in U.S. tech and biotech companies where valuation is more art than science.
The country wants $6.4 billion in what it says are unpaid taxes from foreign funds. Private equity firms could be the next target. The frequent adjustments to tax policy raise a red flag. Investors will have to demand higher returns to insure against future fickleness.
Nearly eight years after going public, the buyout shop is taking a victory lap. Its shares finally trade noticeably above the IPO price, and Q1 results suggest Blackstone’s model is working. Even so, owners of the firm’s equity may prove more fickle than investors in its funds.
The bank left behind years of ho-hum profit with an estimate-beating $2.75 bln in the first quarter. The firm kept costs down, but trading accounted for much of the boost. That raises the issue of whether such earnings are sustainable – and how shareholders should value them.
The Fed boss turned blogger will advise $25 bln hedge fund Citadel. Critics may object, and the move won’t help the U.S. central bank’s image of being above the fray. But former public servants deserve to work for pay. At least Bernanke waited over a year and didn’t join a bank.
Volkswagen’s chairman has lost a power tussle at Europe’s biggest carmaker. But boardroom support for CEO Martin Winterkorn is only a stopgap. Finding a successor for the ageing and erratic Ferdinand Piech and simplifying an overly complex empire are the real challenges.
Sabadell may be shopping abroad, but there’s more M&A to be done in Spain. A toxic brew of weak credit growth, low interest rates and too many bank branches is storing up trouble. Tiddlers like Liberbank look vulnerable. Bigger combinations can’t be ruled out.
China wants more than 90 pct of urban water to be drinkable by 2020. Given that two-thirds of ground water is filthy, that’s bold. But the plan is well-crafted. Plugging infrastructure holes, reforming prices and punishing polluters can make supplies cleaner and more productive.
The online retailer of handcrafted goods priced its IPO at $16 a share, valuing it at about $1.8 bln. The stock almost doubled after trading started, leaving a lot of money on the sewing table. Even Goldman and Morgan Stanley can’t always get the measure of a bespoke bauble.
CEO Mike Corbat now runs one of the leanest banks in the industry, helping the lender’s $4.8 bln first-quarter showing beat expectations. Citi is starting to look undervalued. But return on equity needs to be more than mediocre to justify a sustained rally. That will take time.
Bank accounts and electronic money improve personal financial security. So the global finance industry can take a well deserved pat on the back for a 700 million increase in the number of people with accounts. But new data shows the United States has some problems.