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Sunday, 14 February 2016

Stocks and Funds

A Deutsche Bank employee in Frankfurt, Germany, January 28, 2016

Deutsche makes investors offer they should refuse

12 February 2016

The German bank is offering to buy back 5 billion euros of bonds. A big take-up means more capital for Deutsche, but could also imply a lack of confidence in the bank’s solvency. Given the potential for bond prices to snap back, it may be better for investors to sit it out.

The moon rises next to the head quarters of Germany's Commerzbank in Frankfurt, March 23, 2015.

Commerzbank picks good time to mend the roof

12 February 2016

The German lender has restored its dividend, which was expected, and strongly improved its capital, which was not. Commerz is now better placed to withstand current volatility. The downside: its costs are too high and its returns remain lamentable.

Richard Beales

Bad finance: Mind the non-GAAP @Twitter and beyond

12 February 2016

The micro-blogging service lost $521 mln in 2015 yet “earned” a profit of $277 mln after various adjustments. Regulators occasionally squawk about unofficial metrics, but departures from accounting convention that lead to more flattering figures are worth watching like a hawk.

New Logan cars get ready to roll out from India's Mahindra & Mahindra's plant in Nashik.

Renault steps up a gear but shares stuck in first

12 February 2016

The French carmaker’s operating profit rose 44 pct in 2015 and should be helped by new models, Europe’s recovery and the re-opening of Iran. Yet strip out the company’s massive holding in Japan’s Nissan, and its own business looks undervalued by as much as a third.

Bids and Buyouts

A screen displays the name of music streaming company Pandora on the floor of the New York Stock Exchange in New York July 1, 2013.

Pandora faces lonely search for a partner

11 February 2016

The internet-radio service is reportedly up for sale. Q4 results show revenue growth slowing, however, suggesting potential matches are few and far between. Add stiff competition from Apple and Spotify and limited access to music, and the company seems destined to remain alone.

A pharmacy employee looks for medication as she works to fill a prescription while working at a pharmacy in New York December 23, 2009. REUTERS/Lucas Jackson

Overdue Mylan deal is not the one investors wanted

11 February 2016

Three months after rival Perrigo refused its $26 bln offer, the drugmaker has agreed to buy Sweden’s Meda AB. Though the $7.2 bln transaction makes strategic sense, the 92 pct premium is hard to justify. Mylan might have been better served by trying to sell, rather than buy.

J. Kyle Bass (R), managing partner at Hayman Advisors, Peter Solomon (L), founder and chairman of Peter J. Solomon Co., and Michael Mayo, managing director and financial services analyst at Calyon Securities (USA) Inc., testify before the Financial Crisis

Keep an eye on the banker stage of M&A cycle

11 February 2016

France’s Natixis is buying control of Peter J. Solomon, a specialty corporate consigliere. The U.S. boutique wants to roll up fellow advisory shops. Veteran dealmakers can recall the fates of Robertson Stephens and Wasserstein Perella, and wonder if history will repeat itself.

A sign advertising the Qihoo 360 Technology Co Ltd is hung with the U.S. and Chinese flags outside of the New York Stock Exchange before the company's Initial Public Offering (IPO) in New York March 30, 2011.

Adtech deal arms China’s web groups against giants

11 February 2016

A consortium including search specialist Qihoo and gaming firm Kunlun are bidding $1.2 bln for Norway’s Opera Software. Despite a fat premium, the offer is not overly pricey. Plus, Opera could help the buyers move into lucrative niches not yet taken by Baidu, Alibaba or Tencent.

Money and Markets

Supreme Court Justice Antonin Scalia testifies before a House Judiciary Commercial and Administrative Law Subcommittee hearing on ?The Administrative Conference of the United States? on Capitol Hill in Washington May 20, 2010.

Antonin Scalia's death challenges U.S. leadership

14 February 2016

The conservative justice leaves behind a Supreme Court vacancy amid a nasty presidential election campaign. There’s already Republican talk of blocking any Obama nominee to replace Scalia. A governance stalemate threatens to rattle already shaky global investors and economies.

Journalists request to ask questions as European Central Bank (ECB) President Mario Draghi addresses an ECB news conference December 4, 2014.

Dear Draghi: Time to buy bank bonds

12 February 2016

Bank shares have slumped and bank bond yields are up. ECB chief Mario Draghi can stop the rout from damaging the economy by buying lenders’ debt. The moral hazard concerns are big, but manageable. Breakingviews imagines a memo from a bank CEO. 

Edward Chancellor

Chancellor: Negative rates, negative implications

12 February 2016

The latest weapon brandished by central banks is supposed to boost economic growth and ward off deflation by punishing cash hoarders. In practice, this radical policy damages credit creation, fuels bubbles, threatens civic freedoms and spooks the living hell out of markets.

Japan's Prime Minister Shinzo Abe addresses reporters on the first official business day of the New Year during a news conference at his official residence in Tokyo, Japan, January 4, 2016. REUTERS/Toru Hanai

Unruly markets could derail Abenomics

12 February 2016

A weak yen and buoyant stocks were key to Japanese Prime Minister Shinzo Abe’s fight against deflation. A flight from risk has reversed those gains and overwhelmed the Bank of Japan’s surprise shift to negative interest rates. The turmoil threatens Abe’s whole economic project.