VW boss’s job extension comes at a price 3 May 2006 Pischetsrieder will stay in the driver s seat until 2012. That s good news. It ends months of fights, and management can return to business. The bad news is that he made further concessions to the unions over job cuts. The 2008 performance targets look increasingly out of reach.
BAA delivers flimsy defence plan 3 May 2006 The UK airports operator rightly believes Ferrovial s current bid doesn t deserve a stronger defence plan. But BAA can t afford to sit on its hands. Sooner or later it may well have to beef up its defences.
New French poison pills are unwarranted 3 May 2006 Bouygues has already got authorisation to issue warrants in the face of hostile bids. Suez and Saint Gobain are set to follow. It s a feeble gesture in the wrong direction. Thankfully, big names such as Total and Societe Generale are staying away.
Ethanol boom leads to drunken speculation 2 May 2006 High oil prices and US clean air regulations have temporally made distilling corn into fuel more profitable than refining gasoline. And there s a better longterm story turning agricultural waste into ethanol. But investors are combining and confusing the two stories.
Morgan Stanley’s Roach leaves bear’s lair 2 May 2006 Whereas Roach foresees an end to global imbalances, the remaining bears grumble about the global bubble. The bank's chief economist has become more optimistic about the global economy.
EMI shouldn’t pay much more for Warner 2 May 2006 The US music group s shares are up 38% over three months in anticipation of a takeover from its UK rival. While there is commercial logic in a deal, tilting the terms further in Warner s favour would stop EMI keeping any of the value.
Emerging-market mobile assets go through the roof 2 May 2006 Investcom, an African operator, has just sold for $1100 per user. That's over twice what Turkey's Telsim sold for in December. Cashrich Middle Eastern buyers seem to be driving rocketing valuations. Meanwhile established European groups are being sidelined.
Aramark MBO fraught with potential conflicts 2 May 2006 The CEO and his mates control almost half the votes. while the caterer s 2001 underwriters Goldman and Morgan are financing the $5.8bn deal. These are manageable conflicts, but only if the special committee of directors does a good job. This isn't always the case.
Austrians bail out Bawag 2 May 2006 It was the attempted coverup that brought on the liquidity crisis. Ironically, it was not the huge losses it made on derivatives trades that nearly sunk Austria s fourth largest bank.
Bolivian nationalisation adds to pressure on oil prices 2 May 2006 But history suggests their own economies will suffer the most. Longerterm, weaker supply is likely to lead to even higher oil prices. High oil prices are tempting populist leaders such as Bolivia s Morales and Venezuela s Chavez to sieze control of their energy industries.
Dollar could be slipping from Fed grasp 2 May 2006 Bernanke says he doesn t want to sound too dovish. That refinement of the Fed chairman s view stopped the dollar s fall for a few hours. But the lure of higher US rates may be losing its power. Oil exporters, who are not dollarfriendly, have become the crucial US creditors.
Oil investors should beware of the super contango 2 May 2006 Rising crude prices and a flood of speculative money has ensured that the oil show has played to packed audiences. A steepening of the oil market s current contango into a super contango could see investors suddenly rushing for the door.
Credit Suisse’s investment bank bounces back 2 May 2006 The former CSFB flew in Q1. Revenue growth outshone US peers without the soaring costs which marred last year s results. That will go some way to rewarding dogged investors. But the division needs to show stamina and speed to help close the group s discount.
Money, not, morals behind cut in world’s biggest IPO 1 May 2006 It isn t just unease about Russian corporate governance that has pushed Rosneft to halve to about $10bn its planned stock market listing. Rosneft no longer needs to raise so much cash, thanks to high oil prices. That s just as well as investors will demand a big discount.
Galbraith’s lasting contribution: the bezzle 1 May 2006 The Harvard economist supported many lost causes, such as price controls and big government, during his life, which ended Saturday. His caustic commentary on Wall Street and analysis of speculative manias, however, deserve to be remembered.