Stocks and Funds
The iPhone maker’s $615 bln market capitalization is nearing its own record of two years ago, which eclipsed Microsoft’s peak valuation before the dot-com bust in 2000. This Apple share-price runup may not go far enough. But there’s no bubble fantasy math involved if it does.
The flagship brand of French luxury and lifestyle group Kering posted disappointing sales in the last quarter, sending the shares down. Gucci is struggling with an image problem. At least it can point to early signs that its new strategy is bearing fruit.
Investors were energized by the consumer-goods giant’s plan to offload its struggling batteries arm. Spinning off a low-growth commodity business won’t create much value on its own. But it’s a solid step in boss A.G. Lafley’s campaign to simplify the sprawling $225 bln firm.
An unexpected earnings jump propelled shares in the Swedish truck maker up 10 pct. But Volvo is facing an uphill struggle. The outlook for its core European market is weak, and its new cost cutting targets are ambitious.
Bids and Buyouts
The Spanish group is chasing deals worth 1.8 bln euros in three countries including Australia. The spree echoes its 2006 pursuit of airport operator BAA, which nearly dragged it down. But these acquisitions look less risky. Thanks to savvy sales, Ferrovial has cash to spend.
The German sports group is reportedly set to receive a $2.2 bln offer for the unit. Having overpaid for Reebok in 2006, Adidas has since turned it round and may be loath to sell. But Reebok has little strategic use. Fiduciary duty demands a cold appraisal of its financial value.
Turning tail on the $54 bln Shire deal exposes the U.S. drugmaker’s folly chasing a lower tax bill. Investors facing a $1.6 bln break fee should push for other AbbVie flips: boss Richard Gonzalez’s compensation and the company’s governance in the form of an independent chairman.
The Dutch fish and animal-feed giant is about to be gobbled up in a $3.4 bln friendly deal. The buyer is SHV, the family outfit behind the Makro cash-and-carry chain. With no synergies, this deal is better seen as a long-term bet on growing global demand for protein.
Money and Markets
Henry Kissinger’s “World Order” bemoans the lack of one, as the West’s prevailing approach of nation states with limited conflict isn’t reflected in non-Western traditions. However the Vienna Congress innovation allowing intervention only to protect stability might work better.
Plenty of home loans are available, industry data show. But a lukewarm economy has made potential borrowers skittish. With the likes of ex-Fed boss Bernanke complaining about getting turned down, blaming stingy banks is easy. It’s the other side of the equation that needs work.
The latest leadership pow-wow ended with a pledge to reduce political meddling in court cases, and fight legal graft. Yet foreign companies are unlikely to get a fairer hearing from regulators, and the ruling Party remains untouchable. It’s justice with Chinese characteristics.
The best European lenders will pass Sunday’s exercise outright based on their Dec. 31 balance sheet. Potentially some big names will fail that test, but pass on capital raised since. As for banks still deemed outright failures today, their bosses cannot expect to keep their jobs.