German property-fund reform may come too late 23 Jan 2006 The liquidity crunch facing openended real estate funds including KanAm and DB Real Estate has generated sensible suggestions for reform. But that might not repair the reputational hit to the funds industry, which sold these products when equities were out of favour.
Fiat stake sales could be first of many 23 Jan 2006 Two banks have sold 6.3% of Fiat acquired in September s E3bn debtforequity swap. Other banks with equity are likely to follow. After all, they did not gain control of Fiat. And the stock has rallied since the autumn.
Ford distances itself from GM in Q4 23 Jan 2006 The US carmaker is often mentioned in the same breath as General Motors. But Ford's troubles are not as severe as its rival's. Ford s cash pile is larger and its cash burn lower. But its future is also precarious, particularly if GM were to file for bankruptcy.
Blank has all Lloyds TSB needs in a chairman 23 Jan 2006 The UK bank has identified the right man to head its board. Sir Victor Blank has a track record of tackling underperformance head on. And he is overseeing the breakup of UK retailer GUS. That s exactly the strategy Lloyds should be pursuing.
Blackrock too pricey for Morgan Stanley 23 Jan 2006 Does John Mack want to build an empire or create value for shareholders? If he wants the latter, buying Blackrock would be questionable. But a spinoff and merger of Morgan s asset management arm with Blackrock would reap many benefits. He should pursue this option.
Icelandic bid for Easyjet is a stretch 22 Jan 2006 FL Group isn t a private equity firm; but it would have to behave like one if it bid for the UK lowcost carrier on its own. And there s the rub. Private equity and airlines tend not to mix.
Tech has-beens spring to life 20 Jan 2006 Motorola, Apple, HewlettPackard, and AMD were all recently regarded as the walking dead by the market but no longer. Quicker product cycles and the growing importance of design means faster and greater market shifts in technology.
Steve Jobs kissed goodbye to $2.5bn 20 Jan 2006 How come? After all, the Apple chief s Pixar stake is worth $3.6bn. And he ll pick up another $800m when his restricted Apple stock vests. But had Jobs not exchanged his underwater Apple options before the iPod s success, these options would be worth $3.3bn.
GE needs to prune portfolio more vigorously 20 Jan 2006 A complete breakup of the mother of all conglomerates wouldn't make sense. GE trades at a premium to the sum of its parts. But GE should sell businesses like equipment leasing, consumer appliances, lighting and even media.
Wall Street’s top earners may be outed 20 Jan 2006 Under proposed SEC compensation reforms, companies may have to disclose the pay of up to three employees earning more than top executives. Masters of the universe may be peeved to be outed among the three, and peeved not to be. Executives may be tempted to bump up their own pay.
Trader’s dismissal casts doubt on CDO controls 20 Jan 2006 Given CDOs are a large, fastgrowing market where instruments are hard to price, this should be worrying to all participants. Deutsche Bank only found an alleged overstatement of Anshul Rustagi's book after it had lasted for over a month and once he went on holiday.
Swisscom’s boss walks the plank 20 Jan 2006 It's not surprising Jens Alder has gone, after the Swiss government publicly rubbished his plans to make costly foreign acquisitions. The new boss should learn from Alder's mistakes: manage the government relationship better, and come up with a more valuecreating strategy.
Belgacom releases bad news cack-handedly 19 Jan 2006 The Belgian telecoms operator has delivered another blow to telecoms investors: internet TV will be more of a drain that it thought. What s more, it delivered the news at an informal analysts dinner. That raises doubts over its managers' judgment.
Gilt market squeeze reflects foolish desire 19 Jan 2006 The yield on UK 50year inflationlinked bonds has halved in four months, to a tiny 0.5%. Yet buyers are screaming for more. Why the irrational frenzy? Because pension funds want to eliminate inflation risk when they would do better to manage it.
Renault must close investment-trust discount 19 Jan 2006 The French carmaker trades 25% below the sum of its parts. Twothirds of its enterprise value comes from stakes in Nissan and Volvo. These holdings aren't just an inefficient use of capital; they entrench management. Renault's dynamic boss, Carlos Ghosn, should cut them.
Debenhams IPO would be great for private equity 19 Jan 2006 The mooted £3bn valuation for the UK retailer would imply pretty chunky multiples, at a premium to rivals like Next and M&S. But if they pulled it off, Debenhams privateequity owners would have quadrupled their money in just over two years.
Daimler insider probe may raise questions for Kopper and Deutsche 19 Jan 2006 If correct, did this influence Deutsche s decision to sell a E1.4bn block of Daimler shares? The German press says Daimler's chairman is suspected of having passed information about CEO Schrempp s impending resignation to Deutsche.
LBO financing to get cheaper thanks to CLOs 19 Jan 2006 Collateralised loans are shaking up the leveraged loan market, making it harder for banks to justify fixed pricing for LBO deals. If the market adopts the US model, financing attractive LBOs could become 100 basis points cheaper. But the cost of riskier deals will rise.
Disney needs Pixar 19 Jan 2006 Anyone who saw the hash the US media giant made of its own animation will understand why it is reportedly buying Steve Jobs' studio. This would certainly be a strategic coup for Disney. But at $7bn, it would be paying a very full price.
Draghi sets good example on conflicts 19 Jan 2006 By selling his Goldman shares, the new Bank of Italy boss puts himself in a strong moral position to clean up the country s banking system. If only Berlusconi had taken a similar approach to conflicts of interest when he became prime minister.
Gardening leave takes root on Wall St 18 Jan 2006 JP Morgan, Morgan Stanley and Citi all make US bankers lie fallow if they jump ship. It's a European import the industry could do without. Rather than slowing turnover, it simply bakes more cost into an already bloated system.
Europe not such a laggard after all 18 Jan 2006 Compared to the mighty US, at least. Careful numbercrunching from Goldman Sachs shows almost even percapita growth for the last decade. And European equities have actually provided a slightly higher total return. They re still cheaper.
Livedoor may be canary in tech coalmine 18 Jan 2006 The hyperbolic rise of Tokyo s favourite internet stock has spooky parallels with those of Softbank and Hikari Tsushin in the late 1990s. The unwinding of Softbank and Hikari signalled the end of the last tech bubble. What do Livedoor s problems say about internet 2.0?
Google’s latest deal confirms VC strategy 18 Jan 2006 Though dMarc seems an old economy company, the deal is more like a VC investment. Google might pay anywhere from $100m to over $1.2bn. Google is sensibly using incentives as part of its acquisition strategy. But on the other hand, it seems to be punting with its cash.
US bank earnings fizzle badly 18 Jan 2006 It's not just the flat yield curve hurting the bottom line. Mortgage growth is declining, credit losses rising and fee income flattening. That's the message from Wells Fargo, Fifth Third, NCC and others. The answer to these woes may very well be another round of consolidation.
Google’s latest deal confirms VC strategy 18 Jan 2006 Though dMarc seems an old economy company, the deal is more like a VC investment. Google might pay anywhere from $100m to over $1.2bn. Google is sensibly using incentives as part of its acquisition strategy. But on the other hand, it seems to be punting with its cash.
Gas Natural’s bid looks increasingly stingy 18 Jan 2006 After Endesa s stellar results, it s getting harder for Gas Natural to argue against raising its bid. The Barcelonabased bidder should make a more generous offer.
JP Morgan must address volatile trading results 18 Jan 2006 Trading revenue fell 63% in the last quarter. Yet other investment banks have delivered much more stable returns from this line of business. JP Morgan s new chief, Jamie Dimon, should prioritise getting to grips with the problem.
Equity panic shouldn’t endure 18 Jan 2006 Investors have been shaken by bad ethics in Japan, weak revenue trends in tech and lawsuits in pharma. The mood is suddenly grimmer. But this is not enough bad news to cause more lasting concern. The real froth is in the debt markets.
Deutsche to disown comments on credit trader 17 Jan 2006 Its executives reportedly told the FT that occasional losses were the price for excelling in fastgrowing areas like CDOs. After a trader s alleged £30m overstatement of his position, to let that stand would have done little to discourage dishonest conduct.