Oil markets do the splits 31 Jan 2003 The presumption is that future oil prices will fall sharply, postIraq. But there are good reasons why they may not. And it looks increasingly anomalous. Crude oil prices have risen by 55% over the past year. Yet oil firms shares have fallen by 25%.
Ryanair pays KLM E24m for Buzz 31 Jan 2003 KLM could not afford to fund its lowcost subsidiary. And it could do without the distraction from its core business. Ryanair investors had better get used to acquisition risk. The lowcost airline industry is so fragmented that organic expansion won't do.
Morrison gets £750m contingency firepower 31 Jan 2003 As it stands, the group s allshare offer is worth 30% less than Safeway s market cap. It can t expect Safeway s shareholders to be enthused But why should Morrison bid against itself? There will be time to sweeten the deal later on.
Bankgesellschaft Berlin gets two bids 31 Jan 2003 It looks like there is, after all, competition to manage the runoff of Berlin's troubled state bank. But an auction won't help Berliners recover significantly more. It will just confirm how badly Bankgesellschaft was run on their behalf.
SAP is playing the Nokia game 30 Jan 2003 SAP s margins look more sustainable than Nokia s. But its rating 27 times clean 2003 earnings is too rich for a costcutting story. The German software giant is compensating investors for an absence of revenue growth with disciplined cost cutting.
AOL Time Warner singles out AOL 30 Jan 2003 But if, as rumoured, AOLTW wants to float its cable division soon, it may discover it is still overvaluing some of its assets. The media conglomerate's $100bn goodwill writedown has broken records for a corporate loss.
SEC mulls curbs on hedge funds to protect investors 30 Jan 2003 Most regulators are softening their stance towards hedge funds. By contrast, the SEC is considering restricting shortselling. Given the outperformance of hedge funds lately, it is not obvious that extra protection is needed.
HVB lays out its survival strategy 30 Jan 2003 Cutting risk weighted assets by E100bn is Herculean. HVB would be palming off more risk than, say, Abbey National has on its books in toto. Still HVB has to try if it is to shore up its balance sheet without raising equity.
Spain’s two big banks cut back in Latam 30 Jan 2003 The continent s economic problems have produced SCH s and BBVA s first annual loss in at least a decade. So the focus now is on home. Odd, then, that two of their recent property deals have highlighted Spanish risks.
Mobile bears are hibernating 29 Jan 2003 The latest market falls have left relatively intact the autumn rally in wireless stocks. Last year, mobile investors reached a psychological turning point but failed to turn. The sector is priced for growth again.
Hedge funds stuck on fence over E.ON/Ruhrgas merger 29 Jan 2003 If the deal goes through, another one is triggered: coal group RAG will buy a huge chunk of Degussa stock at a 60% premium. Legal wranglings ensure a tight finish. Degussa s current share price implies the odds of completion are 40%.
Sony Ericsson gets E300m cash from parents 29 Jan 2003 The mobile handset maker's operating performance and marketshare target suggest its cost structure is bloated. The joint venture looks like more of a liability than an asset for Ericsson.
UK life assurers in the twilight zone 29 Jan 2003 The insurance industry has weathered a 50% decline in stock prices because its liabilities have declined too. But there may be a limit to its ability to soak up punishment.
Fiat shouldn’t keep car side for sentimental reasons 29 Jan 2003 In the postGianni era, there may be a temptation to honour Agnelli's legacy by preserving Fiat Auto's independence. This would allow GM to wriggle off the hook, which would be a mistake.
Paulson says Goldman has plenty of flab to cut 29 Jan 2003 But by suggesting 80% of staff add little value, he may have scored an own goal. Clearly, the investment bank s chairman no longer believes in retaining capacity for the upturn.
Cazenove delays its IPO 28 Jan 2003 This has been on the cards for ages. The broker s reputation for market savvy would have been shredded had it proceeded. But Caz probably won t mind the delay. Most of the reasons that drove it to seek a listing have evaporated.
Blix report makes US-led war look likelier 28 Jan 2003 Blix's report has widened the gap between the "goslow" approach of Europe, Russia and China, and the "goforit" attitude of the US. The final British position is key. Going to war without UK support would leave the US horribly isolated politically and economically too.
Junk bond market opens for business again 28 Jan 2003 Demand for highyield bonds has strengthened as the default rate falls and other asset classes disappoint. However, falling equities and economic uncertainty may test the resilience of junk.
US hedge funds face end to tax loopholes 28 Jan 2003 To defer payment of tax on fees from offshore assets looks particularly unpatriotic just now. But that doesn't mean hedge funds will be easily pushed into accepting tax reform.
Deutsche Telekom sells cable cheap 28 Jan 2003 By letting a consortium take its remaining cable businesses for E1.7bn, DT has lost 70% compared to Liberty Media's offer of a year ago. DT has saved face with an earnout clause. But the buyers have definitely achieved a keen price.
Potential Safeway suitor keeps clear of scrum 27 Jan 2003 Granted, Marks & Spencer hasn't said anything. But its longtime mergers adviser Morgan Stanley has now popped up on Tesco's lineup. Not leaping into a costly and timeconsuming scramble for Safeway would be wise for M&S. And that doesn't stop it from swooping in later.
Free cash flow yields are no panacea 27 Jan 2003 They are a better proxy for cash than the muchmaligned ebitda. But they are also open to misinterpretation. Free cash flow yields may look attractive in telecoms. But why are dividend yields so low in comparison?
KPN must be joking… 27 Jan 2003 …since its claim for VAT back on its Dutch 3G licence is a E19bn threat to EU governments' finances. They can't afford a rebate.
FTSE fall raises pressure on life assurers to dump stocks 27 Jan 2003 The UK s Financial Services Authority wants to give breathing space to life assurers in breach of solvency requirements. But the industry s switch out of equities into bonds is a longterm trend and may only accelerate.
Vallehermoso in talks to merge with Sacyr 27 Jan 2003 Talk about a stitchup! Sacyr is Vallehermoso's controlling shareholder. It will take a lot to convince it's getting a fair deal. Terms are fuzzy, but it looks like Vallehermoso will offer E1.2bn in stock to acquire unlisted and unknown Sacyr.
Green to bid 300p or more for Safeway – report 26 Jan 2003 That would put pressure on the other bidders especially Tesco, Sainsbury and WalMart to step up to the plate. Because of the antitrust hurdles they face, which Green doesn't, their offers would need to be not only juicier but also deliverable.
Regulator shouldn’t nod through Agricole’s bid 24 Jan 2003 If it did, its credibility would be exploded. Together, Agricole and Lyonnais would dwarf other French banks. The regulator may not want to block the deal outright. But tough conditions should be imposed.
US tables plan to relax rules on European airlines 24 Jan 2003 To preserve unequal Open Skies pacts between Europe and the US, Washington is willing to allow some crossborder deals. It s cleverly timed, but Europe should stick to its guns and demand equal treatment with the US.
Legal & General gains on reserve strengthening 24 Jan 2003 The insurer has moved fast to offer reassurance about the impact on its annuity business of revised estimates of mortality rates. But L&G, which raised funds opportunistically last year, saw new business decline in Q4. The comparatives ahead will be even tougher.
Agnelli’s death spells end of an era 24 Jan 2003 The Fiat patriarch's early promise and flamboyance were not his only legacy. In recent years, Fiat sank deeper and deeper into crisis. The family and the company are now likely to fragment.