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Saturday, 01 November 2014

BREAKINGVIEWS

A worker passes a sign for Bank Street in the Canary Wharf financial district in London October 21, 2010.

Bank synchrony hints at right kind of collusion

31 October 2014

In recent days, Barclays, Citi, Credit Suisse, Deutsche and RBS have socked away big sums for legal expenses, much of it related to forex rate manipulation. That suggests many U.S. and UK regulators are working together on a rare single settlement. It’d be good for all concerned.

A view of the Exxon Mobil refinery in Baytown, Texas

Unfazed oil kings could make crude bulls bolt

31 October 2014

Exxon, Chevron and Conoco reported solid earnings and remained optimistic despite falling prices. Shale drilling, for example, is profitable at current rates. But investment cuts won’t hit other projects for a few years, making price rises unlikely. Investors may get antsy.

European Central Bank (ECB) President Mario Draghi reacts at the monthly ECB news conference in Frankfurt March 6, 2014.

Draghi can only dream of moving like BOJ's Kuroda

31 October 2014

The ECB chief might fantasise about taking big decisions with a one-vote margin, as the Bank of Japan leader just did. But realpolitik requires a goodly majority. The euro zone’s inevitable compromises complicate Draghi’s fight against stubbornly low inflation. 

Empty bottles of beer sit at the entrance of Anheuser-Busch InBev plant.

AB InBev miss pushes dividends to the fore

31 October 2014

Latest earnings suggest the once-fizzy beer company is becoming ordinary. AB InBev’s valuation reflects its history of M&A-fuelled growth. More big deals may come. But even if future revenue growth is flatter, its dividend ambitions will support the share price. 

U.S. President Barack Obama (R) meets with China's Vice President Xi Jinping (2nd L).

APEC summit shows value of calm and platitudes

31 October 2014

Obama, Xi, Putin and Abe will have much to disagree about when they meet with other national leaders in Beijing next week. The host city’s odd theatrics add to the awkwardness. But the fact that top people from around the Pacific want to show a united front helps keep the peace.

A protester waves a Hong Kong flag during a rally as they block the main road to the financial Central district in Hong Kong September 29, 2014.REUTERS/Tyrone Siu

Hong Kong protests lay minefield for business

31 October 2014

The democracy debate is dividing the city. For companies, keeping quiet is less risky than expressing an opinion that could irk customers, staff, or Beijing. It’s even harder for employees who must tread the blurry line between free speech and representing corporate interests.

Citigroup logo

Citi's legal misery better have some company

30 October 2014

Having to slash $600 mln from recently disclosed earnings because of new regulatory developments is an unwelcome surprise for investors. The bank blames fast-moving investigations. If rivals don’t follow suit, though, the excuse may not be enough cover for Citi’s top brass.

HSBC, Royal Bank of Scotland, Lloyds and Barclays

BoE leverage rule is complex, kind and incomplete

31 October 2014

UK bank shares rallied after the regulator published requirements for equity-to-assets of up to 4.95 pct, but not until 2019. The BoE’s move to peg gross leverage to risk-weighted thresholds should prevent arbitrage, but fails the simplicity test. It is also a work in progress.

The logo of BNP Paribas is seen on top of the bank's building in Fontenay-sous-Bois, eastern Paris, May 30, 2014.

BNP's U.S. demons repelled but not quite banished

31 October 2014

France’s largest listed bank rebounded from a U.S. mega-fine with an 11 pct rise in Q3 profit. A big drop in volatility helped everything but trading. Now, though, volatility is up and the upcoming temporary dollar-clearing ban for U.S. sanctions breaches may cause more pain.

An aerial view shows planes parked on the tarmac.

Spain’s $10 bln airports IPO is just shambolic

31 October 2014

Auditor-related technicalities have grounded one of the largest European share issues this year. The Aena airports sale will probably go ahead in early 2015. But the IPO process will be easier to re-rail if the government makes its commitment unequivocal.

Bank of Japan Governor Haruhiko Kuroda speaks during a news conference at the BOJ headquarters in Tokyo April 30, 2014.

Japan's bulked-up bazooka is last chance for QE

31 October 2014

The Bank of Japan is cranking up its bond-buying just as the Federal Reserve winds down. But even the Japanese central bank is becoming more sceptical of quantitative easing. If 2 percent inflation proves elusive, the BOJ will need even bolder policies - or to throw in the towel.   

China index: Home truths upset economy

31 October 2014

Our alternative growth index hit its lowest levels since April 2009 last month. Housing investment is leading the downturn with the slowest pace of growth in over two years. In the past, more bank lending was seen as the answer. This time, it doesn’t seem to be helping at all.

A customer looks at the new Starbucks logo on a cup at the Solana store in Beijing March 8, 2011.

Starbucks Venti cup is half full

30 October 2014

Sales at the $60 bln coffee chain’s established locations increased less than expected. Even so, 10 pct revenue growth is a problem the likes of McDonald’s would love to have. Savvy marketing and smart acquisitions should help Starbucks keep pace with changing consumer tastes.

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Features

Kate Duguid

Review: No bets on Berkshire after Warren Buffett

31 October 2014

Lawrence Cunningham’s “Berkshire Beyond Buffett” argues the Oracle of Omaha has built a corporate culture that will ensure success after his departure. The book does a good job of cataloging Buffett’s portfolio. But it doesn’t make a strong enough case for investors to follow.

Peter Thal Larsen

Hong Kong protests reach polite impasse

28 October 2014

The “umbrella movement” has lasted a month, confounding predictions of apathy, chaos, or a Beijing crackdown. A compromise on democratic reform is as distant as ever. Yet Hong Kong’s mostly civil activists have changed the city’s political geography for good.

Columns

Edward Hadas

Edward Hadas: Robots can be our best friends

30 October 2014

If the cult of economic efficiency is not abandoned, then machines which can emulate and sometimes surpass human thinking are likely to bring lower wages and more unemployment. But robots provide a wonderful opportunity to combine low labour productivity with high prosperity.

Andy Mukherjee

India in depth: Beating the emerging-market gloom

29 October 2014

GDP growth in China and India is too low for investors to risk their now-costly capital. This is dimming the lure of these large developing nations. Without reforms to boost returns, Prime Minister Narendra Modi’s “Make in India” campaign will face testing times.

Rob Cox

Rob Cox: Zuckerberg's Chinese lessons are scalable

28 October 2014

Bilingual CEOs should be the norm, not fuel for the kind of media frenzy that greeted the Facebook founder’s Q&A in Mandarin last week. Learning a foreign language doesn’t just help conquer new markets. It fosters risk-taking and new thinking, and helps eliminate biases.