US politicians want to force Chinese revaluation 15 Apr 2005 They are on the right track in seeing a stronger renminbi as a good thing. But not in threatening a 27.5% tariff if Beijing doesn't oblige. Making threats is not a good way to gain Chinese cooperation. And the tariff would be harmful and probably ineffective if implemented.
MG Rover collapses 15 Apr 2005 All hopes of reviving talks to save the British carmaker have finally been quashed. But this should have been obvious from the outset. Labour s decision to keep dripfeeding the company has proven costly.
Instinet a big morsel for Nasdaq to swallow 15 Apr 2005 Even if it geared itself up to the gills, it will be a big stretch for Nasdaq to buy all of Instinet for cash. As a result, Reuters may not get the clean exit many of its shareholders have expected from the sale.
Competition in mobile handsets intensifies 15 Apr 2005 Sony Ericsson and Samsung have both disappointed the market with falling handset revenues. Both companies have been trying to take market share in this area. This doesn t look good for other handset makers.
Apple can’t bear whispers 14 Apr 2005 The group s Q2 net income was 70% higher than what the company had predicted. Yet the group s shares were down. Looks like the most irritating boom time excess, whisper numbers, are back in play.
Banks tap hunger for yield to curb hedge fund risk 14 Apr 2005 Banks that provide capital guarantees for hedge funds are limiting their exposure by buying insurance from investors eager for yield. That fits with a regulatory push to reduce banks exposure to socalled catastrophe risk. But banks should take care who the risk goes to.
Rolls Royce chooses volatility in profits 14 Apr 2005 The UK aircraft engine maker is sticking to its hedging policy although new accounting rules will make its reported earnings more volatile. Rolls Royce s hedges give it greater flexibility. It is right to stick to its guns.
Apax pulls out of Woolies takeover 14 Apr 2005 The private equity house says its due diligence threw up problems: it was unable to confirm key cash items . It was always going to be hard for Apax to turn Woolies around. Investors betting on private equity bids for retail dogs should take note.
Piaggio’s E150m bond will test jittery markets 14 Apr 2005 The maker of Vespa plans to issue a highyield bond to refinance a bond issued by Aprilia, the motorcycle maker it bought last year. Market conditions are hardly ideal. But if Piaggio fails, major shareholder Colannino will foot the bill.
Antonveneta minorities must beware Lodi 13 Apr 2005 Lodi has a real chance of derailing ABN Amro s bid for Antonveneta. But not by offering more. Possibly by offering a complex cocktail including illiquid paper. And conceivably by offering nothing at all.
US delays introduction of option expensing 13 Apr 2005 It is already difficult enough to make valuation comparisons between companies that are heavy issuers of stock options. The proposed delay to new SEC rules will add to the confusion.
Berlusconi sells 17% of Mediaset 13 Apr 2005 Italy's PM, long criticised for his hold over the country s TV, may be trying to win back political favour after his recent dismal showing. His timing is good: Mediaset is up 18% this year. But the E2.1bn sale will barely loosen his grip on the TV group, since he keeps 34%.
Ford shouldn’t be tarred by GM brush 13 Apr 2005 Both US carmakers have issued profit warnings amid rising competition and healthcare costs. S&P rates both equally one notch above junk. But Ford has stronger cash flow generation and is realistic about its problems. GM looks like it deserves to be junked. But Ford doesn't.
Morgan Stanley loses Perella, Meguid 13 Apr 2005 The top two investment bankers are the latest casualties of boss Phil Purcell's purge. This will hurt morale, and possibly business. But with their departures, Purcell now has free rein to implement his vision of the firm one where the brand matters more than the people.
Tiscali’s new business plan is no cinch 13 Apr 2005 The Italian ISP will use its disposals proceeds to pay down debt and invest more in its broadband businesses. But Tiscali may still lack the scale needed to compete effectively in its remaining territories.
Frightened Asian central banks propping up the dollar 13 Apr 2005 Dollar bulls argue that the prospect of higher rates is providing support for the US currency. They think the trade deficit doesn t matter. A better explanation is that worried Asian central banks are propping up the greenback for fear of a collapse.
Wallenbergs pay only lip service to modern world 12 Apr 2005 The new generation of the Swedish industrialist family has thrown investors a chicken bone with the management shuffle at Investor. It is doubtful the investment vehicle has a role to play. Spinning off its holdings in AstraZeneca, Ericsson and others would create value.
Nestle gets its knickers in a twist 12 Apr 2005 The Swiss food group has bungled the controversial elevation of its chief executive to the chair. Nestle may think it is immune to shareholder pressure. It isn t. It needs to get its act together before it finds itself in a real crisis.
Heineken family ousts boss 12 Apr 2005 Ruys may be unlucky to have carried the can for three tough years, during which shares in the Dutch brewer underperformed the market. But Ruys did make mistakes, particularly with acquisitions. What s more, the new management structure is clearly positive.
M&S still going backwards 12 Apr 2005 There are glimmers of light in the UK retailer's trading update. The decline in sales is slowing and clothing volumes are up for the year. But unless chief executive Rose manages to steady the ship this year, he will have only himself to blame.
Barclays orchestrates swoop on Somerfield 12 Apr 2005 By pooling its consortium with Baugur, the UK bank has removed one bidder for the supermarket and probably got the price down. This looks nifty. But Barclays s team must hope the ghost of the last Somerfield buyout when it was called Isosceles won't haunt them. This looks nifty. But Barclays s team must hope the ghost of the last Somerfield buyout by a vehicle called Isosceles won't haunt them.
UK considers 50-year inflation linked bond 12 Apr 2005 The government wants to help insurers match their liabilities. Investors should be grateful inflation makes ultralong bonds highrisk. But the measurement of inflation can be quite political. Investors have to be willing to believe that the statisticians will stay honest.
MCI’s board looks flat-footed 11 Apr 2005 Its reasons for rejecting Qwest s superior offers for the company, opting instead for Verizon s, always looked a bit flimsy. Now that Verizon has paid a higher amount in cash to buy Carlos Slim Helu s 13% stake, the board looks downright foolish.
Weather Fund close to nabbing Wind in E12bn bid 11 Apr 2005 Sawiris, the Egyptian entrepreneur who controls Orascom, seems to have beaten rival suitor Blackstone to bag the Italian mobile operator. Synergies between Wind and Orascom will be scarce. But Sawiris' edge over private equity is that he can afford to be more flexible.
Lazard partners don’t make out like bandits 11 Apr 2005 Strip out Wasserstein and they don t just collect less at the IPO than Greenhill s partners did. They re also worse off than Cazenove s. That s as it should be. The partners mortgaged the firm buying it from its owners. They ll have to earn that goodwill back with their sweat.
RBS faces dilemma in Bank of China deal 11 Apr 2005 The Scottish bank is among the contenders to take a stake in BoC. And it could afford to buy as much as 20% without having to issue equity. But a deal would gobble up cash that could instead be used for boosting RBS s capital base and share rating.
Wall Street partnerships bite back 11 Apr 2005 The Morgan Stanley row illustrates the downside of replicating a partnership by loading staff up with equity. When the stock performs, the arrangement works. When it doesn t, present and former troops agitate for change.
Centrica needs a gas deal 11 Apr 2005 The UK energy group's gas output is falling. That gives it less ability to cushion customers from spikes in wholesale gas prices. Acquiring more production capacity, for example by merging with Norsk Hydro, would make sense. The snag is that it's a seller's market.
Debenhams LBO backers make killing 10 Apr 2005 The private equity groups have trebled their investment making this one of the most successful big UK buyouts ever. The secret of their success? Turning around the retailer fast, and riding the credit boom.
Alcatel’s COO, Philippe Germond, to quit 8 Apr 2005 This comes one week after the French telecom equipment maker announced plans to split the role of chairman and chief executive. This change would permit Serge Tchuruk, Alcatel s 67 yearold boss, to hang onto power until 2008.