Boeing and Airbus need to cut production 25 Aug 2003 The manufacturers are producing aircraft for which there is no demand. Unless the global aircraft fleet shrinks, airlines won't be able to boost their returns.
WPP climbing out of the bath 22 Aug 2003 The advertising giant believes its forecast of a "bathshaped" recession, to end next year, is turning out pretty much as expected. Skilful expectations management has allowed Sir Martin Sorrell's acquisition machine to keep rolling in the meantime and pretty boldly.
Investors should fear Schering-Plough shearing 22 Aug 2003 The world s eighthlargest pharmaceutical company has cut its dividend by twothirds. The US company is the first major pharmaceutical company to cut its dividend in 20 years. Others may well follow.
Tech stocks price in too much growth 22 Aug 2003 Can tech stocks grow annual earnings 12 percentage points faster than the general market over the next four years? That is what it would take to justify their relative price/earnings rating.
Bidders heat up for UK’s Drax power station 22 Aug 2003 Only a year ago, everyone was rushing to get out of UK generation. But rising electricity prices have reversed the current. There are now three firm bids for Drax, the UK's biggest power station. Deregulated energy markets are working smoothly.
Lloyds learns to live with Scottish Widows 22 Aug 2003 Eric Daniels, the UK bank s CEO, seems open to serious offers for the life business. But he is taking care not to look like a forced seller. Sticking with the business and fixing it may not be his first choice solution, but that s what management is all about.
ECB holiday doesn’t stop euro sliding 21 Aug 2003 Everyone knows that Europe grinds to a halt in August. But the ECB has taken that to heart, and cancelled all its August meetings. Investors, though, are pummelling the euro in a backhanded way doing the ECB's job for it.
BA should look at alliance with KLM 21 Aug 2003 KLM is in alliance talks with Air France after finding a potential tieup with BA unappealing. BA should lure the Dutch airline back into alliance talks by softening its uncompromisingly tough line on proposed flight and job cuts.
Retail investors jump aboard stock market rally 21 Aug 2003 Equity funds are once again enjoying steady inflows. This is encouraging, but not a sign that the good times are back. Retail money chases, rather than predicts, trends. Should markets fall again, it will rush for the exit just as fast.
Vodafone clears up Japanese detritus 21 Aug 2003 The $2.2bn sale of its fixed line business to Ripplewood leaves it with a pure play on mobile its ultimate goal. But the structure in Japan is still messy. The cost has been high. And waste products of Vodafone's empirebulding elsewhere remain.
Currency trades drive DaimlerChrysler’s profits 21 Aug 2003 The GermanAmerican automaker admits that over half of its operating profits in the second quarter came from currency hedging. Investors deserve better and more timely disclosure.
Hutch struggles to make 3G headway 21 Aug 2003 The Hong Kong giant's efforts to build a European 3G mobile empire are under strain, especially in the UK. But the group can hang in for a good while yet before it has to reconsider its commitment.
Junk bond market takes a wobble 20 Aug 2003 But if borrowers lose easy access to credit a vicious circle can develop. Investors must closely monitor this. The reason rising government bond yields isn t terribly worrying. And valuations are now more defensible.
Nestle posts strong organic H1 sales growth 20 Aug 2003 Sales rose 5.5% excluding acquisitions and currency swings. This is an encouraging result when compared to the sluggish sales performance of its AngloDutch rival, Unilever.
Zurich Financial posts patchy first half 20 Aug 2003 One year on, and the insurance company's turnaround programme is delivering in most, if not all, areas. Zurich appears to be on track to sustain its return to profitability. The question is what it does for an encore.
Deutsche fined over Hewlett-Packard conflict 20 Aug 2003 Its fund managers are cleared of allegations that they switched votes in the Compaq merger because of pressure from banking colleagues. But they have been rapped for the still serious offence of failing to disclose to their clients the fact that Deutsche was advising HP.
Bayer’s and Glaxo’s Viagra rival gets approval 20 Aug 2003 The US has approved Levitra, a rival to blockbuster Viagra. The companies are relying on it to replace sales lost to generics competition. With nothing else in the pipeline, Bayer needs the drug to succeed.
Canary Wharf bid deadline approaches 20 Aug 2003 The property group wants bids before the end of August. Yet its assets are due to be revalued in September, most probably downward. The independent directors assessing the bids face a tough task: how to extract a fat offer when the share price hangs over an abyss?
No harm in central bankers setting up hedge funds 20 Aug 2003 But often they ran hedge funds beforehand. And central banks should not stop hiring them just because they may return to the day job. When expolicymakers like Arminio Fraga and Sushil Wadhwani set up hedge funds, the fear is they will put their inside knowledge to ill use.
Oil prices may remain high 20 Aug 2003 The fact that prices haven't fallen since the war has encouraged some doomsday theories, such as the notion that production may have peaked. These are intriguing, but mundane reasons, such as terrorist attacks in Iraq and Saudi intervention, may be more pertinent.
Messier’s pay-off in court 19 Aug 2003 A very sorry saga of abdicated responsibilities is emerging. It looks like Vivendi's board did little to prevent the scandalous payout. The US and French legal systems are locked in conflict over the E21m golden parachute for the exchief executive of Vivendi.
Celltech advances potential blockbuster drug 19 Aug 2003 UK investors are still sceptical of the cashburning biotech industry. Profitable Celltech plans to take advantage and pick up more of its moneylosing cousins on the cheap.
Executives cash out as equities rally 19 Aug 2003 Company insiders are taking advantage of the stock market rally by dumping stocks at a tremendous rate. Notably, bank executives are leading the way. So much for the idea that debtfinanced consumption will boost recovery.
Private equity haggles with banks on failing deals 19 Aug 2003 Guy Hands and Investec both fought to retain an interest after their ventures Meridien and Welcome Break went wrong. While Hands fought hard, his attempt was seen to be fair. Investcorp, on the other hand, raised the hackles of the banks.
Jury still out on Deutsche Telekom’s US unit 19 Aug 2003 The acid test is whether the unit can slash capital expenditure without jeopardising revenues. And that looks tricky. Its US mobile business has delivered promised economies of scale. But the operator is still struggling to support a high valuation.
Media rally highlights investors’ risk appetite 19 Aug 2003 Media stocks have stormed away since the end of the Iraq war. Pure sentiment has been in the driving seat. Earnings expectations have tumbled even as prices have risen. Media stocks have rejuvenated shareholders' taste for risk.
New hedge fund money slows in second quarter 19 Aug 2003 The market bounce has left pension funds far less interested in switching out of large equity positions and into hedge funds. That may be temporary. But rising equities wouldn t be dampening inflows if hedge funds had been able to show evidence of outperformance.
Vivendi’s US auction under a cloud 18 Aug 2003 Bidders have criticised the conglomerate's attempt to sell its US entertainment assets for $14bn in cash as chaotic and confusing. It is unlikely Vivendi is confused but it may have trouble making its mind up between upfront cash and a punt on media share prices.
Germany should accept defence consolidation 18 Aug 2003 The government is worried the sale of MTU Aero Engines to a private equity firm could undermine its national security. But it is being inconsistent. It approved a large defence buyout only last year.
DoCoMo buyback puts spotlight on Vodafone 18 Aug 2003 Its British counterpart should be more ambitious. The Japanese mobile group's share buyback at $2.1bn is fairly modest given its rocksolid balance sheet.