European stocks still cheap despite rally 16 Jun 2005 The eurozone has been the best performing major market so far in 2005, despite grim economic news and political turmoil in the EU. But the boost to profits from the weak euro has more than made up for the effects of slower growth.
EU crisis still at phoney stage 16 Jun 2005 "No" votes on the constitution have changed the mood from grudging cooperation to blatant national selfpromotion. Witness the budget spat. The EU s institutions including the euro can withstand a lot. But this orgy of negativity could turn the phoney crisis into a real one.
Oligarchs and banks trade places in Russia 15 Jun 2005 Capital flight is taking half of the trade surplus out of the country, according to Fitch. But foreign loans almost compensate. That swap provides portfolio diversification for both sides. But it is not so good for Russia.
Lodi raises Antonveneta bid 15 Jun 2005 The Italian bank clearly has no intention of folding to ABN, in spite of the Dutch group s sweetened offer. ABN's best hope now lies with regulators and the courts, which have the power to derail Lodi s bid.
Thales and Finmeccanica deal could be a mess 15 Jun 2005 In theory, a tieup between the French and Italian defence groups would have industrial benefits. But navigating the political sensitivities and squaring Alcatel, another big shareholder, is likely to lead to a convoluted compromise.
PartyGaming cuts IPO range by 18% 15 Jun 2005 A UK listing was meant to give the online poker company credibility. Instead it has turned online gaming into a regulatory cause celebre. It s no surprise PartyGaming s lofty $10.5bn price tag has been cut. The wonder is that it hasn t been hacked further.
Lazard confirms Braggiotti’s resignation 15 Jun 2005 A large chunk of Lazard s M&A revenue appears to be walking out of the door. This isn t what investors bought into the IPO for. Equally worrying, European M&A is now being run by a committee which presents scope for yet more squabbling.
CDU to put WestLB stake up for sale 15 Jun 2005 This move by North RhineWestphalia s incoming government could herald the first privatisation of a German Landesbank. If the CDU wins national elections in September, it could presage a muchneeded shake up of Germany s public banking sector.
JP Morgan folds in Enron deal 15 Jun 2005 This time around, JP Morgan swiftly calculated that the benefits of a quick cavein outweighed those from a protracted fight. This is sensible given its costly missteps over WorldCom and the outcomes of other court fights, like Morgan Stanley s against Perelman.
Philips warns of European consumer slowdown 15 Jun 2005 But the Dutch conglomerate has retained its 56% sales growth target for this year and higher operating margins in 2006. The group looks like it is setting itself up for further disappointments.
Lehman defies bumpy markets in Q2 14 Jun 2005 While earnings are down 22% sequentially, the investment bank still managed to beat expectations and lift EPS by 10% from a year ago. Given the environment, that s pretty good. And compared to Morgan Stanley s warning, it looks downright enviable.
GLG admits to flawed trading model 14 Jun 2005 Two of the hedge fund's portfolios lost 15% and 9% last month. So why did GLG say in May that everything was "fine" and it had no concerns? Next time it seeks to reassure investors, they may get worried.
Eurotunnel AGM promises drama but not denouement 14 Jun 2005 There will be little fundamental change for the channel tunnel operator, whoever wins Friday's boardroom battle. The saga won t begin to end until either Eurotunnel defaults, or Paris and London get worried enough about its safety to intervene.
Does wind power make financial sense? 14 Jun 2005 Power companies and institutional investors are pouring money into wind power in the expectation of up to 30% returns. But the economics of the industry remain heavily dependent on government support and the vagaries of the wind itself.
Don’t blame US deficit on excess savings elsewhere 14 Jun 2005 One fashionable theory is that the trade deficit is caused by a savings glut abroad. But savings are falling in Japan and investment is high in the rest of Asia. The main cause of the US deficit is a consumption glut at home.
BNPP buys Commercial Federal for $1.4bn 14 Jun 2005 This is the latest in a series of midsized deals by the French bank in the US. It makes strategic sense overall. And this particular deal also washes its face financially.
ABN sweetens bid for Antonveneta 13 Jun 2005 The Dutch bank is betting that raising its bid to E7.6bn will persuade investors allied to Lodi, a rival bidder, to switch sides. ABN is also extending its offer period in the hope that Lod''s bid will be hampered by regulators and prosecutors.
Munich Re faces dilemma over HVB offer 13 Jun 2005 The German reinsurer wants to reduce its 18% stake in the German lender, which has just received a E15bn bid from Unicredito. It may be tempted to sell some stock in the market before accepting the offer. But if that undermines the deal, Munich Re will regret it.
EADS and Boeing set for Paris dogfight 13 Jun 2005 The FrancoGerman aerospace group is locked in a bitter battle with its US rival for dominance of the commercial aircraft market. But EADS is fighting on two fronts: it's also trying to break into the US defence market. It will be hard to win on both.
Morgan Stanley parts with Purcell 13 Jun 2005 The CEO survived sustained attacks while results were good. But with Q2 results likely to disappoint, his position became less secure. Morgan Stanley needs to appoint a credible successor to Purcell soon. But it isn't going the right way about it.
Inmarsat doesn’t deserve a premium rating 13 Jun 2005 At the top of the indicative price range, the satellite operator would come to the market at a premium to rival operators. True, Inmarsat has strong growth prospects. But it has historically failed to make the most of its opportunities.
Citigroup pays $2bn to put Enron to rest 10 Jun 2005 As it did with WorldCom, the financial giant is taking the lead in drawing a line under its involvement with the bankrupt energy group. This should set a precedent for other banks facing Enron claims, though one based less on a precise formula than a backroom fight.
Equity capital markets face capacity test 10 Jun 2005 European governments want to raise E12bn from stake sales in the next five weeks. The private sector may auction nearly as much equity. This would require raising equity at a runrate 25% above last year s average. As market conditions are now tougher, this could be tricky.
Reuters stubs its toe on Instinet brokerage sale 10 Jun 2005 A US fund has raised the suspicion that Reuters was in such a rush to sell Instinet that it failed to get the best price for the unit. But the criticism is at best a halftruth. Delaying the deal to get more for a small part could have jeopardised the whole.
Has UK power deregulation worked too well? 10 Jun 2005 The wholesale price of electricity has hit record highs, but for gasfired plants the spreads over fuel costs have fallen to record lows. Spreads will need to rise soon if new capacity is to be built in time for when it is needed.
Unicredito bid puts Fazio in bind 10 Jun 2005 If Germany doesn t object to an Italian bid for HVB, it will become even harder for the Bank of Italy to stop foreign banks buying in Italy. With the EU, investors, regulators and prosecutors turning against Fazio, the central bank boss is increasingly isolated.
UK retailers suffer collective madness 10 Jun 2005 Almost all chains, even the unsuccessful ones, are expanding. That s provoking price cuts and profit warnings. Too many stores are chasing dispirited consumers. But jumping off the growth rollercoaster is also risky.
UK steps up campaign on tax avoidance 10 Jun 2005 Nobody objects to a clampdown on some of the more egregious abuses. But many of its proposals are badly drafted and poorly thought out. Clearly the government needs the money. But the tax system depends upon clear rules consistently applied. That is now under threat.
NTL shares sink on talk of Telewest bid 9 Jun 2005 The fear is that the cable operator will overpay for its rival. It will certainly need to find huge synergies to make the deal stack up. But that won t worry many of NTL s biggest shareholders, since they also happen to be among the biggest shareholders in Telewest.
Resolution goes public in Britannic merger 9 Jun 2005 The closed lifefund consolidators have few other options right now there is a sellers strike among the funds they might buy. This £2bn merger makes sense financially and strategically. The snag is that it appears to have two ambitious chief executives.