Dow Jones Industrial pokes through 10,000 10 Dec 2003 A magic number revisited. The first time the Dow broke through this level was in 1999. This year s rally has been just as sharp. Good news all round? Not quite. For one, the falling dollar has withered returns for nonUS investors.
Russian oil game reopens 10 Dec 2003 With the Yukos/Sibneft merger heading for the rocks, the way may be open for other bidders to reenter the fray. Foreign firms like Exxon, Chevron and Total may already be prowling around both firms. Sibneft looks especially attractive.
Brown promises more of everything – including debt 10 Dec 2003 Britain's Chancellor of the Exchequer has raised forecast government borrowing by £32bn over the next five years. Brown claims this will allow him to meet his Golden Rule. But the margin for error is small enough to be a rounding error.
Asda mulls £2bn bid for Safeway stores 10 Dec 2003 WalMart s UK business doesn't have much of a chance of being allowed to buy the 70 Safeway stores it is angling for. But that may not be the point. By dangling an offer, it may be hoping to raise the bar for Wm Morrison and perhaps even delay a tieup.
Parmalat brings in Mr. Haircut 10 Dec 2003 Creditors seem to be tightening their grip over the group and its E6bn of debt, setting the scene for a lively fight among investors. Enrico Bondi's name makes Italian bankers shudder. That Parmalat's creditors have backed him suggests they fear the alternative more.
Germany uses combined offer to privatise Deutsche Post 10 Dec 2003 The E2bn issue is a mixture of convertibles and shares. Unlike DT/Swisscom which were only converts; and Enel/KPN which were only shares. The size of the issue meant Germany needed to appeal to two investor classes. But the share price has still suffered.
Sterling’s rise may have only just begun 9 Dec 2003 Against the dollar, sterling has hit levels not seen since its ejection from the ERM in 1992. That sounds scary. It also misses the point. Over the past two years, sterling has in fact been one of the world's weaker currencies. On that basis, it is only likely to get stronger.
Hagemeyer capitulates to rescue rights issue 9 Dec 2003 The Dutch business services group s dire creditworthiness was exacerbating its problems by prompting an exodus of customers. After months of shillyshallying, its lenders are now backing a rescue rights issue a solution that was available all along.
Euronext ditches chief executive pact 9 Dec 2003 The exchange has rightly ditched a plan to swap its French chief executive for his Dutch deputy on nationality grounds. Unfortunately it hasn t wholly drawn a line under the past.
Aventis sells blood plasma unit for up to $925m 9 Dec 2003 The French pharmaceutical company ducks out of the lowmargin, lowgrowth plasma market at a fire sale price. The price does not bode well for Bayer s announced plan to sell its similar business.
Safeway bid countdown starts 9 Dec 2003 The UK supermarket will be squaring up for a feisty negotiation with Morrison. But Safeway is going to have a hard time getting its one successful suitor to raise its offer.
British Airways rains on own parade 9 Dec 2003 Oddly, the airline is talking about insolvency just as its shares are shooting back into the FTSE 100 index. One explanation is Rod Eddington wants to puncture the euphoria. After all, he faces weeks of difficult negotiations with the unions.
Merck gives very short R&D presentation 9 Dec 2003 The US drugmaker has updated the market on its pipeline, and it is bare. With massive patent expirations around the corner, and little to replace them, Merck will be biding time for years.
Benetton dresses up profit warning with plan 9 Dec 2003 The Italian clothing retailer has unveiled a plan to revamp its tired clothing lines and raise margins and profits by 2007. But it s hard to see how this is much more than an attempt to gussy up dismal nearterm results.
Nokia’s new structure may conceal its true costs 8 Dec 2003 The Finnish company s rejig will emphasise the cash generated by its phones. That could be a step to greater transparency. But its newlycreated multimedia and enterprise divisions could equally serve as a dumping ground to flatter its mobile phone results.
Now central banks are selling dollars too 8 Dec 2003 Asian central banks are increasing their purchases of euros, at the expense of dollars. This is all part of a longterm structural shift into euros. But the dollars recent weakness may be accelerating the move.
Swiss use convertible to privatise Swisscom 8 Dec 2003 The exchangeable is elbowing aside the block trade as the preferred privatisation tool. Switzerland s SFr1.5bn convert follows Germany's E5bn Telekom deal. It contrasts with less successful block trades like Italy's Enel sale.
BAe keeps lid on directors’ options bonanza 8 Dec 2003 The UK defence company has discreetly loaded up its directors with share options and relaxed the relevant performance criteria, too. The move is difficult to justify given BAe's performance. Major shareholders should have kicked up a fuss.
ITV pay-off not just hypocrisy 8 Dec 2003 Investor disquiet shouldn t focus so much on Michael Green s £1.4m payoff as on the nonexecutive directors who authorised it. The best that can be said is that they were not being dishonourably inconsistent. But they have proved to be consistently wrong.
Formula One sees peace in our time 8 Dec 2003 Bernie Ecclestone and the carmakers have decided that it is better to cut a deal than go their separate ways. What isn't clear yet is who will foot the bill for the peace: Ecclestone or the banks who are his fellow investors in F1.
Cable & Wireless exits US 8 Dec 2003 The beleaguered UK telecom company expects the sale under US bankruptcy law will cost it £300m max. That s much cheaper than expected, and puts an end to a sorry foray into the US. The question now is what will it do with £1.6bn of cash.
French try to limit Bertelsmann’s TV stake 8 Dec 2003 The French regulator s demand to cap Bertelsmann s voting right in M6 smacks of French protectionism. But it may be more of a face saving exercise than anything else. Bertelsmann s RTL looks to be in control of the E3.4bn TV station.
Parmalat fails to get Epicurum cash back – again 8 Dec 2003 The Italian dairy group has missed its second deadline in two weeks for getting its E500m back. Parmalat has calls on its cash coming due. The group was supposed to be gushing with liquidity. It seems some of it is as hard as Parmesan.
Putin’s grip tightens on Russia after elections 8 Dec 2003 The communists were trounced, the liberals marginalized. Putin s allies may even have a big enough majority to change the constitution. Now comes the interesting political horsetrading. This won t be between parties, but within the proKremlin block.
CSFB takes further step from maverick heritage 5 Dec 2003 A radical change to its pension schemes takes CSFB another step away from its past as a guarantor of big bonuses and home to fiefdoms. A chunk of retirement pay will now be linked to the firm's ability to meet return on equity targets.
Capitalia chairman embroiled in Cirio probe 5 Dec 2003 Roman prosecutors are investigating Cesare Geronzi s role in the E1.6bn collapse of Italian food group Cirio. The probe steps up the heat on Capitalia and by extension Cirio s other banks. The risk is that they may have to reimburse bondholders.
Cheap debt masquerades as equity-linked bonds 5 Dec 2003 Exchangeable bonds from BMW and BT look more like efforts to raise cheap debt than serious attempts to flog shares. Investors are buying even though convertible arbitrage is underperforming. They may be doubling their bets or changing their strategies.
Erb collapses with SFr2bn of debt 5 Dec 2003 The Swiss conglomerate s decline is unlikely to inflict much pain on any one bank. Its losses are spread among 80 institutions. But that shouldn t detract from the obvious lesson that tough questions should be asked before lending to companies with weak governance.
Mobile phone makers set for jolly Christmas 5 Dec 2003 But a postholiday hangover may be just around the bend as phone component suppliers report panic orders . Siemens and Motorola are struggling to keep up with handset demand.
Canary Wharf may accept new bid 4 Dec 2003 Morgan Stanley/Glick's 265p a share bid only represents a measly 4% improvement from its original offer. Why the change of heart? Easy they are offering an allcash alternative. For all the carping about private equity firms stealing away assets, cash is still king.