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Wednesday, 01 April 2015

BREAKINGVIEWS

Prudential Group Chief Executive Tidjane Thiam speaks during an Asian investment forum in Hong Kong March 24, 2011. REUTERS/Bobby Yip

Tidjane Thiam’s pay is insufficiently prudential

01 April 2015

The outgoing Prudential CEO was paid 8.3 mln stg in shares for hitting long-term targets. Given his record, the largesse can be defended. But the UK insurer - and fund manager – should follow peers in requiring such awards to be held until outperformance is proved sustainable.  

Euro coins are seen in front of a displayed stock graph in this picture illustration taken in Zenica, March 13, 2015.

Central banks won’t prop up the euro

01 April 2015

The single currency’s share of global foreign exchange reserves is at a 12-year low. Reserve managers haven’t bought euros to compensate for the fall in its value. Central banks’ lack of commitment to balanced forex portfolios leaves the euro free to fall further.

Canon cameras with lenses are pictured at the stand of Japanese camera maker Canon on the press day of the world's largest fair for imaging in Cologne.

Elliott’s focus on Canon could pay off

01 April 2015

The U.S. hedge fund bought 10 pct of Axis, threatening Canon’s $3 bln friendly bid for the Swedish CCTV specialist. Canon is unlikely to give up. It could settle for a lower stake, and bide its time. But history suggests the already-rich deal could also get pricier.

Tata Motors' $1.2 bln share issue is well timed

01 April 2015

The carmaker wants to raise cash to reduce debt and fund growth. Its struggling domestic unit, propped up by Jaguar Land Rover, is benefiting from a recent change in strategy. A full turnaround will depend on a pickup of economic activity in India.

Jarvis Cocker (L) performs with Pulp at the Coachella Valley Music and Arts Festival in Indio, California April 13, 2012.

Jay Z's new music app may founder on pirate shoals

31 March 2015

The recording mogul has lured Kanye West, Deadmau5 and other artists to his Tidal streaming service with equity and the promise of higher royalties. The model worked for iconic movie studio United Artists. But steering clear of illegal copying could prove a daunting task.

A customer looks at large screen televisions at a shop in Istanbul.

Charter deal may not be final word on Bright House

31 March 2015

The $10.4 bln acquisition, contingent on Comcast buying Time Warner Cable, suggests some confidence those rivals will get approval. If not, however, the U.S. cable puzzle could realign. Charter again might chase Time Warner Cable, which actually has first dibs on Bright House.

A giant LED illuminated ball is pictured at the Philips booth at the IFA consumer electronics fair in Berlin

Philips earns credibility with lighting selloff

31 March 2015

The Dutch group sold 80 pct of its lighting components unit for $2.8 bln. An Asian tech fund paid a surprisingly high 1.65 times last year’s sales. Buyout firms’ hunger for corporate cast-offs helped lift the price. A bigger test looms: splitting off the main lights business.

Supporters of the presidential candidate Muhammadu Buhari and his All Progressive Congress (APC) party celebrate in Kano March 31, 2015.

Nigeria’s democratic change is a real positive

01 April 2015

Africa’s biggest economy is set for its first peaceful transfer of power. Election winner Muhammadu Buhari, a 1980s junta leader, will find ruling harder now. Meaningful reform will take years. Still, better governance is good news for the populace and outside investors alike. 

A worker checks the authenticity of a yuan banknote at a restaurant in Hefei, Anhui province in this September 30, 2010 file photo.

China doesn't yet belong in global currency club

01 April 2015

The yuan may meet the IMF’s vague terms for inclusion in its quasi-currency. That doesn’t mean it’s ready for a prominent place in central bank vaults. A big question is how the yuan might fare during a period of financial instability in China. Answers may soon be forthcoming.

The offices and studios of Comcast Entertainment Group is pictured in Los Angeles

Comcast's golden lasso forestalls CFO parachute

31 March 2015

The $140 bln U.S. cable operator is pumping $4 bln into a new investment firm to be led by finance chief Mike Angelakis. It’s a novel way to keep a shrewd dealmaker happy and close, but a questionable use of shareholder money. The Roberts family fiefdom strikes again.

ECB

Draghi’s QE is doing all it can for securitisation

31 March 2015

The ECB chief’s bid to boost asset-backed security markets has produced few new deals, and its purchase programme is small. But the falling cost of issuance is tangible enough, and regulatory hurdles are lifting. Besides, politics preclude Mario Draghi from buying riskier assets.

Models parade at the end of Marni's Autumn/Winter 2015/16 collection show during Milan Fashion Week

Yoox and Net-a-Porter make a striking combo

31 March 2015

Europe’s two biggest players in selling fancy clothes online are combining in an all-share deal worth about 3 bln euros. Both should gain, and size matters as Amazon eyes luxury. Yoox of Italy gets clear control and scale, while NAP owner Richemont keeps a toe in a growing sector.

Japan's Prime Minister Shinzo Abe arrives at a news conference upon the conclusion of his tour to Europe in Brussels May 7, 2014.

Japan shows euro zone the limits of bond-buying

31 March 2015

The European Central Bank has barely begun buying government debt. The Japanese experience of massive purchases suggests low expectations are warranted. The Bank of Japan has yet to revive inflation. And it seems even to have lost the power to depress the yen and bond yields.

Videos

Features

Edward Hadas

Brazil has edge on Turkey in recovery strategy

01 April 2015

The two middle-income countries suffer from weak GDP growth, big current account deficits, high inflation and corruption. But they are taking different paths. Turkey’s authoritarianism is popular and destructive. Brazil’s new austerity is unpopular but will help even its critics.

Martin Langfield

Mexico faces hardest task kicking Latam graft

30 March 2015

The Petrobras kickback probe shows Brazil is getting better at dealing with corruption. A Chilean boardroom dispute highlights the role foreign pressure can play. NAFTA has helped set new rules in Mexico, but its one-party history and drug money present huge obstacles.

Andy Mukherjee

Clipping Indian central bank's wings is bad idea

30 March 2015

The Reserve Bank of India is facing a campaign to undermine it. Subjecting its regulatory decisions to judicial review will erode its authority. Removing the bond market from its control serves little purpose. Investors can live with a bossy RBI, but not a weak one.

Columns

Rob Cox

Rob Cox: Eat or be eaten is real Kraft calculus

31 March 2015

It had a chance to buy Heinz two years ago. Instead of securing more of the combined value for itself, it’s now ceding control and renting its balance sheet. While selling to Warren Buffett gives the board cover, it raises questions about the sort of managers shareholders want.

Hugo Dixon

Hugo Dixon: Tsipras needs rupture with far-left, not Brussels

30 March 2015

Even if Greece avoids imminent default, its prime minister will have to break with radical allies before Athens’ position in the euro zone is secure. It is not clear he has the courage to do so. But such a move would make far more sense than a break with euro creditors.