Shares in U.S. lenders have been on a roll, but not because business is booming. The market is hoping rising interest rates will be a cure-all. That ignores risks from deposit flight to investment and trading snafus that could be exacerbated by years of pent-up frustration.
European ministers could keep Greece in the single currency despite the country’s “No” vote. German Chancellor Angela Merkel has the domestic power to do a deal. Yet other member states have an incentive to punish populism. Calm peripheral markets are another reason to be tough.
The aero-engine maker’s brand new chief has halted a share buyback programme. The stock slid 9 pct. The decison flags growing cashflow woes but safeguards a crucial investment grade rating. Rolls-Royce’s Warren East is acting with the kind of boldness the company requires.
Prime Minister Najib Razak denies stealing state funds, and says his predecessor is trying to oust him. There’s little room to cut rates and the ringgit is plumbing 16-year lows. With growth slowing, exports falling, and Greece rocking world markets, Kuala Lumpur is in a bind.
The two U.S. healthcare insurers struck a $37 bln deal ahead of rivals in a race to consolidate an industry rapidly reshaping under Obamacare. Cost savings will fall short of the premium Aetna is offering. It may be a price worth paying to be first in line with trustbusters.
The upstart taxi app has suspended its service in France after a fortnight in which it was the target of violence. Two executives were also detained. Uber’s truculent approach has driven growth. But agents of renewal sometimes have to work with the status quo to change it.
Falling sales over the past six months come as a nasty shock from a handset maker that commanded a $45 bln valuation just months ago. Xiaomi is grappling with a slowing home market and competitors catching up. China’s tech prodigy will have to look elsewhere for opportunities.
The referendum question was as unclear as the consequences of each answer. A solid majority backed the government’s position against a deal with European creditors – but the deal wasn’t really on the table. Whatever does happen, it’s a poor electoral example for others to follow.
Mainland authorities are taking ever-bolder steps to prop up stocks which have dropped almost 30 pct in three weeks. Yet earnings growth is slowing and valuations are still high when compared with other markets. If fundamentals matter, Chinese equities have further to fall.
A convincing anti-euro zone vote means the European Central Bank must decide whether to cut the Greek banks off from crisis loans, risking financial meltdown. In theory the ECB may be able to keep the sector going while the dust settles. But that may be politically impossible.
European creditors are wary of writing off Athens’ debts because it could set a precedent. Yet if Prime Minister Alexis Tsipras resigns after the referendum, a deal should be doable. Few politicians would follow his path of capital controls, economic strife and career implosion.
The Canadian fertiliser giant is willing to bid $10.5 bln for its German peer. It will need to improve its offer and give credible job guarantees to win over the target. But these concessions could become contradictory. A higher price implies Potash will need bigger cost cuts.
The e-commerce group’s soccer club will list on the “New Third Board”, an upstart exchange with $200 bln of companies that could be China’s answer to Nasdaq. It’s a welcome source of capital for start-ups, but a lack of oversight means investments are only for the brave.