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Wednesday, 01 October 2014

Stocks and Funds

A shoe and a soccer ball by German sporting goods maker are pictured before the company's annual news conference in the northern Bavarian town of Herzogenaurach March 7, 2012.

Adidas buyback secures injury time for management

01 October 2014

The world’s second-largest sportswear maker is handing back 1.5 bln euros to shareholders. They may welcome a tighter balance sheet. But the move doesn’t address Adidas’ core profitability challenges. Management is still disappointingly short on ideas where it matters.

A model presents a creation from Jimmy Choo during its London Collections: Men show in London June 16, 2014.

Jimmy Choo investment case is a bet on China

01 October 2014

The luxury shoemaker is seeking a London float, giving its private equity owners a partial exit. A mooted $1 bln price tag values Choo at a premium to most peers. The justification could be the potential to grow in Asia. But it’s a market that can spring unpleasant surprises.

A logo is seen on a Coca-Cola bottle in Zurich, February 16, 2011. REUTERS/Christian Hartmann

Coke challenge goes beyond revising pay plan

01 October 2014

The beverage giant has backed off its controversial executive compensation scheme. That’s a win for Warren Buffett, investor David Winters and the company’s other shareholders. But the quibbles with Coke don’t end with excessive pay. Costs loom as the next activist target.

A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014.

Goldman's new conflict rules raise bigger question

30 September 2014

Bankers there face fresh limits on investing in stocks, bonds and hedge funds. Goldman knows how easy it is to cross a line when treading close to it. Why Wall Street dealmakers can own individual securities at all is the real mystery that speaks to a culture loath to change.

Bids and Buyouts

Flags of PayPal and eBay are seen next to a U.S. flag outside a PayPal office building in San Jose, California.

PayPal forced to rev after eBay's belated U-turn

30 September 2014

The $70 bln online auction company has for years resisted setting free its payments business. Apple and Alibaba created more urgency than Carl Icahn and other investors could. EBay squandered a big early advantage, but independence may yet give PayPal a chance to play catch-up.

An employee works behind a logo of Softbank Corp at its branch in Tokyo March 2, 2011

SoftBank and Shrek may lack on-screen chemistry

29 September 2014

The Japanese conglomerate may offer $3.4 bln for movie studio DreamWorks Animation. Softbank’s giant balance sheet can easily absorb the hit-and-miss earnings of film production. But with each big acquisition, it becomes less clear how the group’s parts fit together. 

President and CEO of Encana Doug Suttles addresses shareholders at the company's annual meeting in Calgary, Alberta.

Encana's pirouette demands greater fanfare

29 September 2014

The Canadian driller’s $7 bln acquisition of Athlon Energy cements a commitment to move from gas to shale oil. It’s paying a full price, especially after the recent fall in crude to $94 a barrel. If Encana can get the transition right, though, its valuation will deserve a lift.

Bottles of Penfolds Grange are on sale at a wine shop in central Sydney August 4, 2014.  REUTERS/David Gray

Bid rebuff pours pressure on Treasury Wine

29 September 2014

The Australian owner of Penfolds ended talks with private equity bidders saying a $3.1 bln offer undervalues the company. A 11 pct share price drop suggests investors aren’t totally convinced. There may be room for buyers to return if the still-new CEO can’t turn things around.

Money and Markets

ECB President Draghi speaks during the monthly news conference in Frankfurt

ECB can stomach Greek junk risks

01 October 2014

The central bank seems ready to break its own collateral rules to buy Greek or Cypriot asset-backed debt. That’s a side effect of policy success, not a cause for worry. The ECB needn’t be a slave of rating agencies, and the risks to its balance sheet are manageable.

Sainsbury's shopping trolleys

Victory equals loss in UK supermarket price war

01 October 2014

Sliding revenue at Sainsbury dashes hopes the grocer might circumvent the struggle enveloping UK rivals, including Tesco and Morrisons. A strategic review shows welcome determination to get a grip on Britons’ changing shopping habits. But the falling tide will lower all boats.

A volunteer health worker practises using a personal protective equipment (PPE) suit at a newly-constructed Ebola virus treatment centre in Monrovia, Liberia, September 21, 2014.

Ebola sets clock ticking on West African economy

01 October 2014

Growth may yet survive the deadly epidemic. The last four years’ 28 pct pace isn’t realistic, but controlling the outbreak soon should at least preserve investment. That won’t be easy, given the virus has now spread to the U.S. In saving lives and the economy, every day counts.

George Hay

Sovereign doom loop haunts EU bank stress tests

01 October 2014

The euro zone banking union was meant to start with a robust bank solvency test. Yet national regulators have successfully lobbied the ECB to count deferred tax credits as capital. That restores the state/bank dependency the single banking supervisor is trying to sever.