WH Smith turnaround will be tough 14 Oct 2004 The UK group s High Street stores had declining sales last year in spite of promotions that killed the operating margin. The group is slowly rebuilding its margins. But its sales are still falling, and Christmas is expected to be difficult once again.
Cheap phone sales shore up Nokia 14 Oct 2004 The Finnish mobile phone maker is picking up sales in growth markets like China, but only by selling lowend phones. This may work for a while, but Nokia needs to push upmarket phones if it is to recover its allure as a growth stock.
UK pension crisis is not that severe 14 Oct 2004 Sure, the increasing number of old people is causing a funding problem. But the number of kids is shrinking. So the overall "dependency ratio" will only rise a little. What's more, it's reasonable to expect old people to work a bit longer.
European carmakers scramble to restructure 14 Oct 2004 General Motors is the latest to announce it is cutting its costs in the face of rampant Asian carmakers. That's all very well. But capacity needs to be cut too. And that's really hard while governments continue to treat the industry as a political football.
Citigroup performance diluted by investment bank 14 Oct 2004 This raises the question of whether the group s diversity really is as much of an asset as chief executive Chuck Prince says it is. The businesses that have given the financial behemoth a black eye and depressed its value are also dragging down its earnings.
Kremlin uses circular logic to shortchange Yukos 13 Oct 2004 But it's only so risky because the government seems bent on crushing the company. This is yet another nasty twist in an ugly saga. The Russian government has gone for a lowball valuation for the sale of Yukos main operating unit, mainly because it is "risky".
King tries to avoid central banker’s nightmare 13 Oct 2004 The Bank of England boss needs higher rates to check the housing market, but that could damage an already weakening economy. So King is trying to talk his way out of trouble. That's great if it works. But don't count on it.
Carrefour warns on sales, profits 13 Oct 2004 The retailer had a dire Q3 as price cuts failed to tempt shoppers back. Likeforlike food sales at its core French hypermarkets fell 5.5%. Carrefour may be right to cut prices further. But this looks like it will be pretty painful.
SEC proposes ban on IPO laddering 13 Oct 2004 It may be a bit late, but having rules on the books should make it easier for the SEC to enforce and definitively deter the practice. The SEC's next step must be the insidious practice of spinning and here it needs to clamp down on CEOs, not just the banks.
Private equity frenzy over Shell unit may not last 13 Oct 2004 But Shell's unit is bigger and more complicated. The exit isn't straightforward either. The initial enthusiasm isn't surprising. The last financial sponsor to invest in a liquefied petroleum gas business made a killing.
Karstadt and unions play a game of chicken 13 Oct 2004 But since Karstadt has already made a small concession, the pressure is now on the unions to back down. Both sides stand to lose if the struggling German retailer doesn t succeed in cutting costs.
US firms to repatriate billions under new law 13 Oct 2004 Hundreds of billions of dollars in retained earnings could return to the US under a new tax holiday. With overcapitalised pharma companies among the biggest winners, expect some hefty returns of capital to investors.
Brussels takes Germany to court over VW law 13 Oct 2004 The German carmaker ought to be in favour of anything that leads to the 20% voting cap statute being scrapped. True, abolition would make it vulnerable to bids. But it would also help the company reform itself.
Germany tells companies to stop leaking 12 Oct 2004 Part of the problem is the cumbersome nature of decisiontaking at German companies. Hopefully, the law will change attitudes. Selective leaks are endemic in German companies. Take Karstadt the retailer had to preannounce a rights issue because of leaks.
Philips running to stay in place 12 Oct 2004 The Dutch conglomerate s management have stated that this year is going to be one of the better years . But the company doesn't have much to show for a decade of restructuring. Operating margins at 4% are no higher than they were 10 years ago.
‘Hear, hear’ to UK accountants bashing the EU 12 Oct 2004 Europe wants to press on with new accounting standards for derivatives but with getout clauses. Britain s accounting body says hold on. The ASB may not have the power to see off the EU. But it is right to object to political meddling in accounting standards.
There could still be some value in Enel’s stock 12 Oct 2004 Granted, the stock has had a big run. And Enel s margins will come under pressure if electricity prices fall. But Enel s big first year dividend should help cover the risk. And if Wind can be sold off at a premium, investors will be overjoyed.
Merrill’s 3Q heralds return to broker roots 12 Oct 2004 Even though the brokerage and trading businesses underperformed, the investment bank registered as a blip in overall revenues. M&A and underwriting income was proportionately lower than at its biggest rivals. So, too, was trading. Does this make Merrill a safer bet?
Oil panic pushes up risks 12 Oct 2004 The world economy can adjust to oil at $50, or even $80 as the industrial base is ultimately flexible. But the transition would be risky. It would be hard to avoid inflation or recession. But panic is premature. The higher prices oil price may not stick. It would be hard to avoid inflation or recession. But panic is premature. The higher oil price may not stick.
Is Cazenove really being sold for a pittance? 12 Oct 2004 The fact that JP Morgan could pay as little as £100m and end up with a half stake in a JV with Caz may seem to suggest as much. But this misunderstands the nature of the deal. The £100m is only part of the valuation jigsaw. The total value is much higher.
Sainsbury credibility hit by profit warning 11 Oct 2004 The UK supermarket group has revealed another cut in profits. And the information has come out in an unfortunate way. This could undermine CEO Justin King s credibility ahead of a critical review just when he needs it most.
The group still plans to increase capital expenditure by up to 25% despite falling flat screen prices. 11 Oct 2004 While plunging profits at the flat screen producer can be explained away, its strategy cannot.
Man cut-back puts hedge fund on spot 11 Oct 2004 The UK hedge fund group s decision to pull money from Marin, a fund it seeded, may explain why the fund is now curbing client withdrawals. Yet Marin s performance has not been disastrous. Man's move will reinforce scepticism towards the convertible strategies that Marin pursues.
Germany sells E4bn of Deutsche Telekom stock 11 Oct 2004 DT has just irked the minorities of TOnline by withholding a premium from them when squeezing them out. That will make it easier for this huge sale of its own shares to succeed.
Eni boss on acquisition trail for wrong reasons 11 Oct 2004 Vittorio Mincato says the Italian oil and gas company must double in size to avoid being taken over. That is an odd thing to say. Shareholders might well prefer being taken over for a premium to shelling out megabucks on deals.
What’s the best way to break up Gus? 10 Oct 2004 The accepted wisdom is that Experian, its credit checking business, should be demerged or floated. But there s an intriguing alternative: selling Argos. This could be Gus shareholders best bet of getting a premium to current valuations.
Eli Lilly could be next pharma disaster 8 Oct 2004 If the US drugs giant loses an important court case this month, the ruling will blow a hole in its stock. Worse, it could lead to a downward rerating across much of the pharmaceutical sector.
Corporate bond prices look bubbly 8 Oct 2004 Defaults could eat up more than half of current credit spreads. There is not much spread left over to compensate for liquidity risk. Benchmarking investors are reluctant to sell too early into a rising market. When the market finally turns, it will hurt.
French banks can withstand consumer backlash 8 Oct 2004 Finance minister Nicolas Sarkozy wants banks to sit down with customers and agree to more competitive charges. Despite a worrying precedent in the UK, the French banks should be able to get by without surrendering much margin.
Spain’s bulls may have further to run 8 Oct 2004 The IBEX has outperformed European and US indices so far this year, thanks to falling real interest rates and the strength of Latin America. With earnings growth expected to outstrip rivals, and a relatively cheap valuation, the market could climb further.