Fazio hits back at EU critics 14 Feb 2005 Italy s central bank chief argues his banking system is more open than that of other European countries. But there is a big difference between investment and control. Italy has much to gain from allowing foreign banks into its domestic market.
LSE bid not a threat to Takeover Panel 13 Feb 2005 Could the Panel be undermined if foreigners bought the exchange? That s the impression the FSA is giving. It looks like scaremongering. It would depend on a bidder shifting the LSE abroad which is unlikely to happen. Even if it did, the Panel wouldn t lose all its powers.
GM pays Fiat E1.6bn to go away 13 Feb 2005 Both sides have ended up compromising. The Italians have given up the Fiat Auto put option and the Americans have paid over some cash. Fiat has probably done the best deal it could. But it has still surrendered its main safety net. It needs a new strategy fast.
Why is Italy paying premiums for block trades? 11 Feb 2005 The oddity is that the state didn t face much competition for Enel s stake in Terna or Finmeccanica s STM shares. But it was politically essential for Italy to get these deals done. Even so, in a truly free world, investors might have got a better deal.
Fashion for very long bonds is foolhardy 11 Feb 2005 Pension funds want 50year bonds to balance out their liabilities. Governments seem increasingly happy to oblige. Memories of bondbusting inflation seem to have vanished. It could be costly.
Gallaher jumps on bid rumours 11 Feb 2005 There is some logic to a deal and only rarely is there such smoke without fire. The UK tobacco group's stock is up about 35% since September on talk that Japan Tobacco might make a bid.
Danone looks cheap 11 Feb 2005 The French food group enjoys among the strongest organic growth of any consumer goods group and is also a potential bid target. Yet little of this seems to be reflected in the share price.
Ericsson shares looks close to the peak 10 Feb 2005 The Swedish telecoms equipment maker has warned revenue growth will decelerate. Meanwhile, its gross margins have slipped. This looks more like the return of pricing pressure than an unfortunate mix of revenues. If so, the stock is vulnerable.
Rolls Royce boosted by civil aerospace recovery 10 Feb 2005 The British engine maker s profits have jumped as it grabbed an everincreasing share of lucrative maintenance business. But much of the recovery has already been priced in. And Rolls continued heavy investment will make further margin improvements difficult.
Man Utd sends odd signals over Glazer bid 10 Feb 2005 The board ought to be snapping Glazer s hand off given the price he s paying. But it is actually setting obstacles in his path. The reason? The board is afraid of upsetting supporters. Another reason why football clubs are a lousy investment.
UK urged to speed up rights issues 10 Feb 2005 Rights issues carry lower fees than placings, but they involve more paperwork, time and hassle. Now a government review proposes making rights issues easier. Investment banks will find it harder extract fat fees for the alternatives.
Barclays unfairly hit by market quibbling 10 Feb 2005 Pretax profits rose 20%. But the market is disappointed because it was partly due to falling provisions. Moreover, costs are still rising. That's harsh. Lower provisions imply good credit quality. And cost growth, particularly in its investment bank, should reap future rewards.
Unilever grasps half the nettle 10 Feb 2005 The good news is that the consumer goods giant has abandoned its dual chairmanship structure and announced a E500m share buyback. The bad news is it will continue with its dual HQ, dual listing and the same bosses. What's more, trading in 2005 is likely to be tough.
Osmond sees off rival bid for HHG life fund 10 Feb 2005 The entrepreneur killed Resolution s possible counterbid, raising his £1bn offer by 5%. It should cheer other closed funds looking to sell. Next time round, anyone selling a closed life fund should run a properly structured auction.
Don’t bet on Garnier to end the arms race 10 Feb 2005 But that doesn t mean that Glaxo is about to cut its salesforce regardless of what other drugs companies choose to do. The chief executive of GlaxoSmithKline may lament the pharma "arms race" that has caused sales and marketing expenses to soar.
End of French 35-hour week marks liberal twist 10 Feb 2005 The goal is not freer markets, but lower unemployment. But ironically, the main result is likely to be slightly faster growth and very few new jobs.
Daimler seeks cost savings at Mercedes 10 Feb 2005 The German carmaker s luxury marque had a disastrous 2004. And the outlook for this year is pretty grim. A large part of the problem is Smart. It s time Daimler took radical measures with the unit.
Reckitt well placed to lead consolidation 9 Feb 2005 The household goods group insists that it doesn't need to do deals to maintain its remarkable sales and earnings growth. But with a cash pile, considerable debt capacity and a premium rating, it is unlikely to be a bystander in any further sector consolidation.
Baugur dangles £1.2bn before Somerfield 9 Feb 2005 A price of 190p a share for the UK retailer is a pretty chunky premium for a company most investors regard as strategically challenged. Why are the Icelanders prepared to pay up ? Maybe because a deal would help solve the mess at their last purchase: Big Food.
Carly Fiorina quits HP over strategy 9 Feb 2005 Walter Hewlett got it right. The Compaq merger was a mistake and Fiorina pegged her fortunes to it. The promised operational benefits from the deal never materialized. The stock languished. Value was destroyed.
Euronext promises juicy LSE synergies 9 Feb 2005 It's not only trying to whet LSE investors' appetites. It is trying to answer the FSA s concerns about a foreign takeover. But there s still no mention of a price. Perhaps Euronext realises that whatever it bids, rival Deutsche Boerse may trump it.
EU steps up the pressure on Italian banks 9 Feb 2005 The European Commission is putting pressure on the Bank of Italy to drop its resistance to foreign takeovers of domestic banks. About time too. The fragmented Italian market is overdue consolidation. Foreign banks should be allowed to lead the way.
Will second-lien loans replace mezzanine debt? 9 Feb 2005 This new type of loan, suddenly very popular, is like mezz debt but with a few strings attached. These extra strings make it cheaper for companies to issue. But they could complicate future debt restructuring negotiations.
UBS cheery on investment banking outlook 8 Feb 2005 The Swiss bank's record Q4 result shows it's still reaping the rewards of investments made in the bear market when rivals were cutting back. That means UBS can enjoy the benefits of continued buoyancy in the markets without having to throw its cheque book around to hire new staff.
US hedge fund may be fraud victim – WSJ 8 Feb 2005 Ardent, a small US investment firm that recently sold itself, appears to have seen a big chunk of investors cash stolen, the paper reports. The incident may highlight an additional industry risk fraud. Whatever the case, it will fuel calls for additional regulation.
BP shines next to Shell 8 Feb 2005 BP is growing production and replacing reserves faster than Shell. Best of all, it has increased its dividend by 26% in dollar terms. By allocating more cash to dividends, BP has signalled that it believes it can sustain this outperformance.
Renault shares may have further to run 8 Feb 2005 Rising commodity prices may make it hard for the French carmaker to beat its strong 2004 results. But in Carlos Ghosn it will have a respected CEO, who is expected to cut costs. Strip out Renault's Nissan stake and the shares look cheap.
Disclosure is best remedy for fairness opinions 8 Feb 2005 A debate is raging in the US about whether investment banks are ever able to render objective views on deals. Of course they can t. But better disclosure of the methodologies banks use, and the fees they receive, would allow investors to make their own assessments.
US budget shows shortfall in realistic thinking 8 Feb 2005 The 2006 budget proposal does not address the largest fundamental imbalance the lack of funding for socalled mandatory programmes. The US could easily afford the president s expansive vision of what government should do. But not with Bush's idea of low taxes.
Good may yet spring from bad in Yukos debacle 7 Feb 2005 On the face of it, Russia could do what it wanted with Yukos oil assets. Yet reality proved more complicated. This is a good thing. The contortions that the Kremlin has gone through to maintain a semblance of propriety make any similar action more unlikely.