Month: September 2004

Generali’s H1 profits smash forecasts

9 Sep 2004

And for the right reasons. The Italian insurer has shown improved premium income growth and underwriting efficiency. Generali is now well ahead in delivering on its threeyear plan. But that doesn t mean it will enjoy a premium rating any time soon.

EU finance ministers need growth rethink

9 Sep 2004

They re probably right to start thinking more about growth than stability. But encouraging retail banks to merge is a poor place to start. They should focus on pensions, sensible public sector investment and eastward integration. And keeping away from stupid industrial policies.

Biotech isn’t an exception for capital raising

8 Sep 2004

The UK government has appointed Paul Myners, the chair of M&S, to examine relaxing preemption rights for biotech companies. Creating different capital raising rules for favoured sectors sets a bad precedent.

Putin’s job is almost impossible

8 Sep 2004

The Russian president is in trouble over terrorism and Yukos. But he presides over a dysfunctional government. And a dysfunctional country falling population, exploding alcoholism, rebellious regions. Avoiding collapse would be an accomplishment. And a dysfunctional country falling population, increasing alcoholism, rebellious regions. Avoiding collapse would be an accomplishment.

Amvescap settles market-timing probe at last

8 Sep 2004

Boss Charles Brady has survived the affair so far. But he now needs to get the business shipshape pretty fast to be sure of continuing. But it involves a jumbo fine on the asset manager, and has been too long coming.

Credit derivatives become traders’ plaything

8 Sep 2004

The market is now used much more for trading purposes than with a view to transferring credit risk. It may now pose more of a systemic threat to the financial system than it did during the last credit crunch.

Capital guarantees trigger hedge-fund liquidations

8 Sep 2004

The sustained weak performance of hedge funds has forced a gradual liquidation of some fundoffunds to honour capital guarantees. Capital guarantees may not be the great marketing gift for hedge funds that they are often imagined to be.

Old raiders try new tricks

8 Sep 2004

Carl Icahn and Vincent Bollore are back in the saddle taking big blocks of stock and terrorising company managers. The difference is that now they are wearing the whitehats of the shareholder value movement. It may be a more viable longterm strategy.

Stelios runs aground in the US

8 Sep 2004

For a guy who likes things easy, the entrepreneur is having a dastardly time executing plans for his US shipping group Stelmar. Easyjet investors betting on a Stelios buyout better hope he doesn t need the money from Stelmar to make his move.

BA cashes in on £438m Qantas stake

8 Sep 2004

The sale makes sense. There was little point in having that much capital tied up in an Australian airline. That doesn't mean the UK airline will now go on a spending spree. BA is much better off cutting its debt mountain and fixing its business.

BNL capital hike could hamper M&A hopes

8 Sep 2004

The Roman bank could try to dilute a group of rebel shareholders linked to old suitor MPS by launching a capital increase of up to E1bn. Were the rebels to be outflanked, minority shareholders betting on a prompt bid would have to bide their time.

Pharma sells the future to private equity

7 Sep 2004

SanofiAventis has joined the trend of hiving off divisions and selling majority stakes to buyout funds. This may make margins look better over the short run, but it comes at a longterm cost.

Public-private partnerships prove troublesome

7 Sep 2004

The UK private sector hasn't been very good at providing government services. This part of the ThatcherBlair revolution has largely failed. Governments are inefficient builders and operators. But the combination of banks an the private sector is not necessarily better.

Tui calls off Hapag-Lloyd IPO

7 Sep 2004

The tourism company has decided to hang on to its shipping business rather than sell it at a chunky discount. That may be the right decision, but it makes a takeover harder. No wonder Tui waited until after it was safely in the DAX to break the news.

MGM auction nears climax, finally

7 Sep 2004

What has taken Kirk Kerkorian so long to clinch a sale of the film studio to Sony or Time Warner? Its finances are not to be envied. A buyer would have to transform the business, or risk a paltry return on the investment.

British Energy pushed into EGM

7 Sep 2004

Dissident shareholders are forcing the UK generator to put its proposed restructuring to a shareholder vote. But shareholders may be better served by holding off from shooting down the agreement.

UBM should split

6 Sep 2004

Not only is the UK media conglomerate a strategic muddle, it is also undervalued. The departure of its chief architect, Lord Hollick, accelerates the case for a breakup. The trick is to get a premium.

European firms unlikely to start borrowing

6 Sep 2004

Spreads and rates argue for a corporate borrowing spree. But it s stronger balance sheets and share buybacks that are in fashion. The new caution is well founded. Growth is slow and risks are high. Debt markets could stay depressed.

FSA learns the value of surprise

6 Sep 2004

Officers from the UK regulator have mounted spotchecks on some investment banks to ensure bankers aren t telling analysts what to say. With new rules on investmentbanking conflicts only two months old, these tactics mark a new, and welcome, departure.

EDF’s boss to lose job – reports

6 Sep 2004

This is probably a precondition for a successful privatisation of the French utility. Roussely destroyed billions through empire building. The errors of the past will make privatisation difficult. But they also show the necessity of market discipline.

T-Online buy-in inches closer

6 Sep 2004

A management shakeup makes it seem increasingly inevitable that Deutsche Telekom will take control of its internet unit. But DT need not hurry. TOnline is expensive. And its valuation is under threat.

Caz/JP will have to avoid turf wars

5 Sep 2004

The key to success in banking joint ventures like Nikko Citigroup or the old Jardine Fleming is a complementary skillset. The snag with the mooted Caz/JP venture is that it may face competition from its parents. That would cause turf wars.

Caz’s jv scheme little more than an earn-out

5 Sep 2004

Forming a joint venture with JP Morgan may look radically different than a takeover by Lehman. But they are not so different given that the jv would probably include a put while a takeover would be an earnout.

ITV boss treads on thin ice again

5 Sep 2004

The UK broadcaster's honeymoon is long over, thanks to falling audience figures. That may not hit sales this year, but it will the next. This isn't great news for Charles Allen, ITV's chief executive. He is still on probation following last year s shareholder revolt.

German companies named and shamed on pay

3 Sep 2004

Five companies have been shamed for not linking pay to performance. This is the right way to prompt corporate governance reform in Germany. It will encourage compliance with the voluntary corporate governance code and avoid cumbersome legislation.

Intel repents for its optimism

3 Sep 2004

The world s largest chipmaker has admitted that it has been overestimating demand for its chips. Intel s admission shouldn t surprise. And with inventories still growing, there is more pain to come.

EU’s softer stability pact may be better

3 Sep 2004

Peer pressure and market forces have stopped governments from borrowing irresponsibly so far. But the euro experiment is still fragile. The softening of eurozone borrowing limits is reasonable enough. But the new pact will be no more enforceable than the last. The new rules will not be any more enforceable than the old ones. But at least it won't be so obvious that they are being flouted. What's more, peer pressure and market forces will continue to keep governments from really wild borrowing.

Sarkozy gets most of what he wants

2 Sep 2004

He had to give up the cabinet to go run the presidential party. But he leaves without looking foolish. And with Chirac s grudging support. It s good to be outside of the government. Sarkozy can avoid tough calls and gain authority. His agenda will stay the centre of attention.

Westerners are real victims in German reforms

2 Sep 2004

Too much of their money goes to support high living standards for unemployed easterners. But it is the easterners who are on the streets. Much tougher reforms are needed to stop the eastern economic rot. The Germans should follow Ireland, not Italy.

Suez restructuring pays off

2 Sep 2004

Return on capital employed has shot up. And continuing capital discipline has paved the way for returning cash to shareholders. The utility s massive asset disposals are coming to an end. But the programme has served its purpose.