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Saturday, 28 November 2015

Stocks and Funds

A tower belonging to the Abengoa solar plant

Abengoa has creditors over a barrel

27 November 2015

The beleaguered Spanish engineering group might survive if lenders take haircuts of two-thirds. In liquidation, losses could mushroom due to the group’s spiralling working capital needs, complex business and slow Spanish courts. Abengoa needs a speedy resolution and more cash. 

The Barclays headquarters building is seen in the Canary Wharf business district of east London.

Barclays money-laundering rap is oddly reassuring

26 November 2015

The UK bank has been fined for cutting corners on a 1.9 bln stg deal for politically sensitive clients in 2011. The temptation for banks to bend the rules for VIPs is just as strong today. But more vigilant regulators are chipping away at the idea that this is business as usual.

Employees work on an assembly line of Hero Motocorp during a media tour to the newly opened plant in Neemrana, in the desert Indian state of Rajasthan, October 20, 2014. REUTERS/Anindito Mukherjee

Indian sale makes Bain Capital rare buyout hero

27 November 2015

The U.S. firm has sold its remaining $116 mln stake in Hero MotoCorp four years after investing in the world’s largest motorbike maker. In rupee terms, Bain doubled its money in four years. As private equity pours into India, it’s a reminder that getting money out remains harder.

Jack Ma, Executive Chairman of Alibaba Group

Jack Ma paper chase is test of newsprint's appeal

26 November 2015

The Alibaba founder is interested in buying Hong Kong’s South China Morning Post. The 112-year old title’s earnings are under pressure, and the financial logic looks thin. But as fellow e-commerce boss Jeff Bezos showed with the Washington Post, newspapers still have trophy value.

Bids and Buyouts

Shipping container cranes are seen at the Patrick port facility in Melbourne June 9, 2009.

Qube edges ahead in Aussie infrastructure fight

26 November 2015

Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.

Hong Kong tycoon Li Ka-shing attends a news conference announcing the annual results of his company Hutchison Whampoa Ltd, in Hong Kong March 29, 2012.REUTERS/Tyrone Siu

Playground weaklings give Li Ka-shing bloody nose

25 November 2015

Hong Kong shareholders rejected the tycoon’s $12.4 bln bid to merge his listed energy and infrastructure units. It’s another sign institutions in the Chinese territory are increasingly willing to exercise their limited powers. Companies can no longer take support for granted.

Ian Read, chief executive officer of Pfizer, smiles at a news conference in New York November 5, 2013.

Pfizer's war chest stealthily rebuilt by Allergan

25 November 2015

The $160 bln mostly stock deal will create a combination gushing $25 bln of operating cash flow annually. An offshore tax address means there’s no reason to keep over $60 bln of cash on its balance sheet. That’s a lot of financial firepower to buy back shares and fuel more M&A.

A company logo is seen at a Pfizer office in Dublin, Ireland November 24, 2015.

Delay in Pfizer split is material adverse event

24 November 2015

The $160 bln acquisition of Allergan will cut taxes and add solid assets, but it’s also causing Pfizer to defer until 2018 a decision on splitting up. Even though the company’s disposals have added greater value than acquisitions, CEO Ian Read seems more eager to bulk up.

Money and Markets

A passerby walks in front of posters for the forthcoming COP21 World Climate Summit in Paris, France, November 2, 2015.

Climate will supplant shale as top energy disruptor

27 November 2015

The world’s politicians may be about to get serious on cutting greenhouse gases at the U.N. Paris confab. And shareholders are pushing Big Oil to disclose global warming risks. The consequences for the industry will be longer lasting than the recent oil production revolution.

Turkish President Tayyip Erdogan makes a speech during his meeting with mukhtars at the Presidential Palace in Ankara, Turkey, November 26, 2015.

Turkey has more friends in politics than markets

27 November 2015

Europe’s recent rapprochement with Ankara is born of necessity. Less porous shared borders will help control the flow of migrants into the West. But investors have a choice. Their ardour will hinge on how much reform latitude President Tayyip Erdogan gives his new government.

Edward Chancellor

Review: Another "Minsky moment" may be on the way

27 November 2015

Hyman Minsky didn’t just predict the global financial crisis 10 years in advance, a new book on him argues. The maverick economist also explained how the cure – bailouts by the Federal Reserve and other central banks - would drive the financial system to the brink yet again.

A Saudi money exchanger counts Saudi riyals in Riyadh.

Dollar peg remains Saudi Arabia’s best option

27 November 2015

Saudi Arabia is under pressure to break its currency peg with the dollar. The inflexible riyal means Saudi can’t devalue to offset weak oil prices. But given Riyadh’s huge forex reserves, the risks of moving to a floating currency still outweigh the rewards.