Moody’s and S&P have little to fear from reform 14 Jul 2006 Government regulation currently limits entry into the ratings business. Washington intends to change these rules. But the market share of leading raters is unlikely to decline. That's because the business is a natural monopoly.
SG’s Cowen IPO debuts poorly 13 Jul 2006 The boutique broker s stock dropped 5% on its debut. And that was after the French bank cut the price by almost a fifth. That should dampen enthusiasm for upcoming share sales from rivals like Evercore Partners and Keefe Bruyette.
Japan’s zero-rate policy has served its purpose 13 Jul 2006 When money was first made free in 1999, deflationary decline was a real threat. That has been avoided, with massive government spending. Now the economy is strengthening and prices are rising, it's time for normal service to resume.
Shock EU ruling on Sony/BMG threatens EMI deal 13 Jul 2006 An EU court has annulled the Commission s 2004 clearance of the music deal. Sony and BMG may have to renegotiate the whole thing. That's not just a bore for them. It potentially puts the EMI/Warner deal in jeopardy.
Aviva sweetens the pill on $2.9bn AmerUs deal 13 Jul 2006 A betterthanexpected trading update and lowerthanexpected price may ease some worries about the UK insurer s US buy. But it s still hard to get very bullish about a deal that gives Aviva no more than a toehold in a huge, highly competitive market.
Ford finally wakes up 13 Jul 2006 It s been six months since rival General Motors halved its dividend and directors pay. Now Ford, belatedly, is following suit. But this is a baby step. Its restructuring plan is too optimistic and too slow in coming.
Oil majors change nationality 13 Jul 2006 Fifteen years ago, all the listed oil majors were Western. Now, with Rosneft s IPO, less than two thirds are. The fall of the West s oil dominance will accelerate. The question for investors is how to extract better governance in return for capital.
Brown avoids the obvious in BoE appointments 13 Jul 2006 The choices are a reasonable response by Brown to his critics. But the selection process for the MPC is still murky. The UK Chancellor didn t go for a big City name or even an active monetary economist. But Sentance and Besley are both wellregarded.
Eurotunnel should level with shareholders 13 Jul 2006 Talks are bogged down because the board is reluctant to tell investors the ugly truth. Its latest wheeze: to file for protection. This may be understandable given the directors came to power on a shareholder revolt. But shareholders may get less in the long run.
Burberry fights for luxury credentials 12 Jul 2006 New boss Angela Ahrendts plans to diversify the fashion group s range and tap highgrowth markets. That's a step in the right direction. But her real challenge is to fix the share price. Burberry is a luxury stock but one with the rating of a highstreet retailer.
Rosneft investors: don’t expect miracles from Rudloff 12 Jul 2006 As the only nonRussian independent director at the oil group, the Swiss banker may push for governance norms. But will Rosneft listen? Rosneft hasn t been solicitous to investors during its IPO. There s no reason to believe it will change afterwards.
Volatility to rise on naked short clampdown 12 Jul 2006 There currently exists an unspecified number of longstanding naked short positions which are exempt from current regulation. The US regulator wants to get rid of them. But that could mean a rise in the number of short squeezes.
Greed triumphs over fear in Rosneft IPO 12 Jul 2006 The Russian oil group seems to have persuaded some institutional investors to pay top dollar for its shares. But that s more to do with not wanting to be left behind than anything else.
Airbus valuation still a mystery 12 Jul 2006 Why did Rothschild value the aircraft maker 35% below market guesses? Popular theories focus on Airbus cash advances and currency hedging. But neither seems fair. The worry is that Airbus faces deeper problems.
Another banking boutique debuts 12 Jul 2006 The peak in the return of the boutique axiomatically follows the boom in M&A and a rise in dissatisfaction with the megabanks. The latest creation has the added irony of including Stephen Crawford, who pushed for a bigbank merger while Morgan Stanley president.
Why isn’t US trade deficit growing? 12 Jul 2006 At 2% of world GDP, it is still dangerous. But the gap hasn t increased for eight months, despite a 20% rise in the energy import bill. Strong airplane exports play a big part. But optimists should beware. There was a similar pause in the first half of 2005. Strong aircraft exports play a big part. But optimists should beware. There was a similar pause in the first half of 2005.
Time Warner rolls the dice on AOL shift 11 Jul 2006 The internet arm's plan to move away from charging highspeed subscribers has erased some $2.6bn of market value. But this may be an overreaction. AOL's gamble to replace this jurassic revenue stream with highermargin advertising is right on.
Xstrata persists in $16bn Falconbridge pursuit 11 Jul 2006 The UKlisted miner has increased its cash bid for the Canadian counterpart by 12%. That is 10% more than the value of the rival Inco offer. The story isn t over yet, though. Inco and its new partner Phelps Dodge could fight back. But risks of victory rise with the bids.
Matalan MBO puts minorities on the defensive 11 Jul 2006 The chairman and 53% shareholder is planning a bid for the UK retailer. But in doing so, he has already angered other investors. In this unusual situation, there s only so much the board can do. But they can at least hold out for a fair price or just say no.
UK government looks for pennies from heaven 11 Jul 2006 Involuntary contributions from the dead and forgetful aren t something for nothing. They re a manipulation of the money supply. Well, it wants to take £400m from dormant bank accounts to fund good causes. The sum is small and the economics are poor. Involuntary contributions from the dead and forgetful aren t something for nothing. They re a tax.
Lucent warning ups pressure on Alcatel 11 Jul 2006 It's a little worrying that Lucent's customers are seen to be delaying orders. This is beginning to hurt the US telecoms group's business. Alcatel itself is already financially weak. It is taking a risk by merging with a company that is possibly even weaker and deteriorating.
M&S deserves more credit 11 Jul 2006 The UK retailer s shares have lost momentum and longstanding shareholder Brandes just cut its stake. M&S may be getting into the really tough bit of its recovery. But the market still isn t valuing it for what it s doing.
US fiscal gains could reverse quickly 11 Jul 2006 Bush is now forecasting a $300bn federal deficit this year. That s $80bn less than forecast six months ago. The improvement is genuine, but it s based on high profits and market gains. These would disappear in a slowdown as happened in 2001.
Brussels should ditch mobile retail price cap 10 Jul 2006 International mobile calls are too expensive. But that s no reason for the EU to cap retail prices. That would be a step too far. Capping wholesale rates would be better. It would encourage competitors to get a market slice and leave Brussels scope to turn up the heat.
Standard Life squeezes institutions in £4.7bn IPO 10 Jul 2006 The UK insurer made a success of the offering by encouraging members not to sell but buy new shares. That limited supply to institutions. Retail investors were right to stay in on this occasion. Standard Life looks a good value play with inbuilt defensive characteristics.
GM tie-up could spread Renault’s management too thin 10 Jul 2006 Carlos Ghosn might be the best car company manager alive. But he is already running two car groups whose problems appear to be mounting. Running a third would stretch Ghosn even thinner. And he may not even be the right person for the job.
P&O might sail back into the stock market 10 Jul 2006 But not as it was. It s DP World, which bought out the ports operator in February, which is thinking about a London flotation. Still, UK investors would be likely to baulk at paying the current private market price for ports. Arab buyers could be more willing.
LaBranche’s loss shouldn’t worry Wall Street 10 Jul 2006 The NYSE specialist issued a stonking profit warning following May and June's equity volatility, raising questions about other brokers. But most of them are more diversified than this miniSalomon Brothers. That should shield their earnings from similar losses.
What does Warner Music really want? 9 Jul 2006 The obvious answer is that the US record company is trying to buy its UK rival rather than be bought by it. But if that s what it wants, it has an odd way of going about it.
Timing options grants hurts shareholders 7 Jul 2006 SEC Commissioner Paul Atkins says companies can save shareholders money by granting options just before releasing good news. He assumes that the option grants would be small. But the scandal over backdated options suggests that isn t the case.