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Monday, 27 April 2015

BREAKINGVIEWS

IPO

China frothy markets churn up funding opportunity

27 April 2015

Companies are using rising prices to raise equity capital. Buoyant stocks have also made regulators more relaxed about new supply. For a country that has gorged on corporate debt, more equity sounds like a good thing. If investors were more discerning, it really would be.

Ferdinand Piech, chairman of the supervisory board of Volkswagen

Piech exit opens door to VW governance revamp

26 April 2015

The chairman’s resignation ends a worrying spate of boardroom conflict at Volkswagen. But there is a risk. Europe’s biggest carmaker may struggle without Ferdinand Piech’s tough love. Revamping its unwieldy and outdated governance structure can keep the group on the road.

Pedestrians walk past the Time Warner Cable headquarters in New York February 13, 2014.

Time Warner Cable's greed comes home to roost

24 April 2015

When boss Rob Marcus lunged for Comcast’s $45 bln bid, he gave in to the buyer’s demand that it pay no fee if the deal got torpedoed. Now Marcus is empty-handed in a rapidly changing industry. Rival suitor Charter may return, but Time Warner Cable’s negotiating power is weaker.

Executive Chairman of Google Eric Schmidt listens to a question as he speaks at Harvard University in Cambridge, Massachusetts April 25, 2013.

Google's Schmidt again plays adult in DE Shaw buy

24 April 2015

The tech giant’s executive chairman is taking 20 pct of the hedge fund firm off bankrupt Lehman Brothers’ hands. The billionaire was brought into Google to supervise its young founders. Not for him the frivolity of, say, a sports team investment like Steve Ballmer’s.

Britain's opposition Labour Party leader Ed Miliband speaks during the launch of their Manifesto for Young People at Bishop Grosseteste University in Lincoln, central England April 17, 2015.

Labour to gain from "follow the money" UK voting

24 April 2015

People vote with their wallets. The governing Conservative coalition may earn credit for presiding over five years of low interest rates and a strongish pound. But a Breakingviews calculator suggests a weaker record on growth, house prices and stocks could swing votes to Labour.

Ana Botin, Chairman of Banco Santander, gestures at the Ending the Experiment event in the Swiss mountain resort of Davos January 22, 2015.

Santander finds Uncle Sam-friendly way to expand

24 April 2015

Spain’s biggest bank is merging its asset management arm with that of UniCredit, with private equity help. Both lenders gain from meshing cash-generative, capital-light businesses. But Santander does so without adding scale in the United States - where it still faces big regulatory hurdles.

The offices and studios of Comcast Entertainment Group is pictured in Los Angeles

Comcast's boss should live to buy another day

23 April 2015

A collapse of the $45 bln Time Warner Cable deal would leave controlling shareholder Brian Roberts with a second ugly scar. Overconfidence also contributed to a failed tilt at Disney a decade ago. Comcast rebounded with NBCU, which suggests Roberts will be back before too long.

People sit on beds while waiting for treatment at a hospital after undergoing cataract removals from a free eye surgery camp, in the northern Indian city of Amritsar December 5, 2014.

India retirees' stocks push lacks Japan's zeal

27 April 2015

The $125 billion Employees’ Provident Fund is making its maiden foray into equity. The planned 5 percent allocation to stocks doesn’t pack the punch of Japanese pension funds’ recent portfolio shift. But a bolder switch will require overcoming unions’ mistrust of markets.

A Budweiser sign is displayed along side a sign for Goose Island beer at a store in Brooklyn, New York January 14, 2015.

M&A advice can be seen clearly with beer goggles

24 April 2015

Corporate finance has more in common with lager and ale than meets the eye. The bulge bracket in both industries had been losing market share to smaller craft practitioners. The Guinness makers of mergers – Goldman Sachs and Morgan Stanley – are staging a slow pour of a comeback.

A general view shows the HSBC building in the financial district of Canary Wharf in London

HSBC exit from London is far from clear-cut

24 April 2015

The UK-based emerging markets bank says it is looking at where it should best be headquartered. The regulatory, economic and reputational costs of being in London have clearly risen. But HSBC’s realistic alternatives – Hong Kong and Shanghai – both carry major risks.    

A scientist works in a laboratory

AstraZeneca's reliance on one-offs is unsettling

24 April 2015

The pharma group managed to beat expectations in Q1 despite wrestling with patent expiries. One-off disposals of $309 million helped boost operating profit to $1.8 billion. Raising funds makes sense at a time when Astra is challenged, but investors shouldn’t rely on them.

Amazon box

Amazon Web Services delivers profitable twist

24 April 2015

Breakneck expansion at the web retailer’s cloud computing unit recalls Amazon’s glory years. Companies are seeing the benefits of letting someone else handle servers, storage and software. This time, the Jeff Bezos playbook contains a welcome wrinkle: growth and maybe profit.

U.S. Secretary of Defense Ashton Carter walks on his way to meet Japan's Prime Minister Shinzo Abe at Abe's official residence in Tokyo, Japan, 08 April 2015.

Silicon Valley might as well embrace Uncle Sam

23 April 2015

The Pentagon is setting up shop in tech-land’s backyard, essentially taking their long-standing relationship public. With cybersecurity a rising concern, generals and geeks locking arms will do each some good, even if it further stokes consumer suspicions about Big Brother.

Videos

Election

UK election

Who will gain from “follow the money” voting?

Features

Edward Hadas

Review: The politics of anti-inequality

24 April 2015

Anthony Atkinson’s “Inequality” is a UK-centric manifesto to help the poor and restrain the rich. The Oxford academic’s specific proposals are mostly sensible, but they dodge serious questions about the role of the welfare state and the balance of national and global justice.

Robyn Mak

China's cyber crackdown: A guide for the perplexed

24 April 2015

The People’s Republic is squeezing technology companies. New banking rules and counter-terrorism legislation could make it harder for foreign groups to operate in the expanding market. Is security just an excuse to protect domestic players? Breakingviews cracks the code.

Daniel Indiviglio

Bond market shock wouldn't trigger new 2008

21 April 2015

Thinning markets have led even Jamie Dimon to fret over what happens if investors are surprised. Bank exposure has fallen, while funds and ETFs have grown. Breakingviews explains why, despite the potential for price gyrations, lower leverage should help avoid another crisis.

Columns

Edward Hadas

Edward Hadas: Hooray, trading slowed on Friday

22 April 2015

A Bloomberg outage limited activity in some usually busy financial markets for a few hours. That’s no loss. Excessive trading does more economic harm than good and encourages risky leverage. Slower markets would be less wasteful – though people would still find ways to speculate.

Andy Mukherjee

India in depth: A race to write cheques

22 April 2015

Not all state governments will know what to do with an unanticipated $30 billion jump in their share of tax revenue this fiscal year. But that’s a short-term problem. Eventually, shifting spending from New Delhi to sub-national governments should boost India’s growth potential.

Rob Cox

Rob Cox: EU's new trustbuster begins with a bang

21 April 2015

Since becoming Brussels’ antitrust chief, Margrethe Vestager has taken action against the twin monsters of the digital and energy worlds: Google and Gazprom. But her battles on the Eastern and Western fronts of market abuse may leave Europe’s M&A boom plenty of room to flourish.