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Thursday, 26 November 2015


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.

Andre Esteves, CEO Brazilian BTG Pactual bank in Davos January 24, 2014.

Brazil crisis may have silver lining: rule of law

25 November 2015

Latin America’s biggest economy will get worse before it gets better. The arrest of billionaire banker André Esteves suggests room for further nasty surprises from the Petrobras corruption probe. But feisty independent courts and stronger institutions point to a brighter future.


UK housing market policy gets ever more misguided

25 November 2015

Britain is hoping its Help to Buy scheme will get more punters into the inflated housing market. That’s alongside 2.3 bln stg in subsidies to tempt private sector builders to sell at a discount. Even if this somehow creates 400,000 new homes, the rich gain more than the poor.

The flag of Europe is pictured in front of the ECB headquarters in Frankfurt, August 4, 2011.

Europe's terrible banks look their best in years

25 November 2015

Capital levels, profitability and lending rose in the six months to June, the European Banking Authority says. Bad loan ratios are almost double those of U.S. banks, and more EU quantitative easing could be bad for business. Even so, lenders are proving surprisingly healthy.

A tower at Abengoa solar plant at "Solucar" solar park is seen in Sanlucar la Mayor, near the Andalusian capital of Seville November 17, 2014. Shares in Spanish renewable energy and engineering firm Abengoa rebounded on Monday - after falling sharply last

Abengoa’s creditors face certain pain

25 November 2015

The heavily indebted engineering firm is seeking creditor protection after a new investor backed out of injecting fresh equity. Abengoa is probably viable, but only with a lot less debt. That makes debt-for-equity swaps and writeoffs the likely next step. 

CalPERS gets what it pays for from private equity

24 November 2015

The U.S. pension giant revealed that $24.2 bln of net gains from the asset class over 25 years came at the cost of $3.4 bln in so-called carried interest for fund managers. Private equity is pricey and hitherto opaque, but CalPERS’ analysis so far helps justify the fees.

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.

Britain's Chancellor of the Exchequer George Osborne

UK’s Osborne is less austere than he makes out

25 November 2015

Finance minister George Osborne isn’t quite the budget zealot his Nov. 25 spending cuts suggest. The UK has run bigger deficits relative to GDP than France during his tenure. He has also executed tax and spending U-turns when required. It helps that gilt investors buy the hype. 

A sign for Bank Street in Canary Wharf

Bank regulator's blunder sums up Europe’s troubles

25 November 2015

Lenders’ capital ratios are higher than previously calculated, the European Banking Authority has said. The watchdog’s technocratic remit makes the error galling. Such confusion could deter investment just as the region’s financial institutions are doing more to deserve it.

BHP and Rio look out of touch on China

25 November 2015

Low-cost iron ore miners BHP Billiton and Rio Tinto are accomplished experts digging for the ferro-raw material. They are much less good at consumption estimates. With the ore at 10-year lows, the companies’ investment cases depend on them getting ahead of China’s demand curve.

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.

A Xerox logo on a photocopier.

Icahn Xeroxing the HP breakup playbook for Xerox

24 November 2015

The activist took a 7.1 pct stake in the faded technology icon, which appears to be in a state of permanent restructuring. The $10 bln copier maker has some decent assets inside a disappointing whole. Finding buyers for some, and milking others for cash, looks logical.

uk dmo

Time for Germany to let EU banking union fly

24 November 2015

The European Commission wants a mutualised deposit insurance scheme for banks by 2024. Berlin may be averse to the idea of financing non-German busts. But there are some safeguards, and unpicking the link between banks and states would better avoid trouble in the first place. 



Hugo Dixon

Dixon: How the EU could woo the UK

23 November 2015

The British prime minister wants to rework the UK’s relationship with Europe. Once complete, other EU leaders could launch a charm offensive to persuade Britain it is valued and influential, and to vote to stay in the union. Here’s what Merkel, Hollande, Renzi, et al could say.

Edward Chancellor

Chancellor: The illusion of debt-fuelled earnings

18 November 2015

Low borrowing costs enabled acquisitive drugmaker Valeant to ratchet up EPS with leverage. Earlier episodes of financial engineering - like Japan’s zaitech and the 1960s conglomerate boom - came unstuck after rates rose and stocks fell. It won’t be any different this time.

Rob Cox

Cox: Quarterly reporting to get a major rethink

17 November 2015

From BlackRock’s Larry Fink to presidential contender Hillary Clinton, “quarterly capitalism” has become a four-letter word. Big publicly traded asset managers could change habits by abandoning their own three-monthly results. Watch for that in the coming year.


Quentin Webb

Japan’s investor revolution is delayed, not dead

20 November 2015

Shareholders are souring on the hope that Japan Inc. can become better-run and more profitable. That’s too gloomy. Last year’s returns on equity were humdrum and there have been big disappointments. But real change is underway and the pressure for more is huge.