When will oil re-tell the sugar story? 18 Aug 2006 The price of the sweet stuff has fallen by a third since April. New supply has more than matched rising demand, scaring off speculators. Hydrocarbons will follow carbohydrates, but not right away. For sugar, planting to market only takes a year. The oil cycle is much longer. The price of the sweet stuff is down almost 40% since February. New supply has more than matched rising demand, scaring off speculators.
Stock market poised for a flight to quality 18 Aug 2006 Value stocks have done well in recent years. But they ve underperformed this summer as investors became more risk averse. As profits peak and the economy slows, US quality stocks are set to outperform.
Naps kill Boeing’s $1bn in-flight internet system 18 Aug 2006 The US aircraft maker s inflight internet service, Connexion, was an engineering marvel that overcame tremendous technical problems. But the programme was killed by a simple problem. Most passengers prefer lowtech pursuits like sleeping.
Ryanair threat against UK looks duplicitous 18 Aug 2006 Michael O Leary, the outspoken boss of the lowcost airline, is clearly angry about the way BAA has handled extra airport security. But it is hard to avoid the impression that the real reason for his outburst is to try to force a breakup of BAA.
Teck drops bid for Canadian miner 17 Aug 2006 Investors seemed happy to let the zinc miner chase its nickelproducing Inco as long as Phelps Dodge was the only other bidder. But CVRD s cash offer threw a spanner in the works. Teck s shareholders weren t willing to back a bidding war against a much larger rival. Investors seemed happy to let the zinc miner chase nickelproducer Inco as long as Phelps Dodge was the only other bidder.
Debt quality starts to slide 17 Aug 2006 In the last two months, 16 companies have fallen into junk, while only four have risen up to investment grade. The totals aren t huge, but so much deterioration in prosperous times is alarming. If a recession comes, a debt disaster could follow.
Providence won’t find it easy to win big on NTL 17 Aug 2006 The private equity house has made a mint from a string of European telecoms and cable deals. But NTL, the UK cable operator, would be far bigger than Providence s past deals and won t be as cheap.
Terrorism threat a red herring for BAA’s £12bn financing 17 Aug 2006 The financing for Ferrovial s takeover of BAA isn t in jeopardy despite losses from flight cancellations. The real hurdle will be convincing existing bondholders to migrate their bonds into the new financing structure.
Peltz’s biggest challenge still lies ahead 17 Aug 2006 Activist investor Nelson Peltz appears to have scored a victory at Heinz by getting board representation. But a much bigger struggle lies ahead in revitalising the troubled ketchupmaker s operations. But a much bigger struggle lies ahead in revitalising the ketchupmaker s operations.
Google debuts free Wifi 16 Aug 2006 The internet company claims that providing free wireless access in Silicon Valley is just an experiment. But its real strategy is to profit in new ways through targeted local advertising.
Poor performers can’t rely on buyout exit 16 Aug 2006 Private equity may be swimming in cash, but that doesn t mean they ll buy everything that s up for sale. Betting the company on a private equity sale is a dicey strategy, as shareholders of Jones Apparel and Bally s have learned the hard way.
Lebanon truce doesn’t reduce global risk 16 Aug 2006 Investors have been almost as enthusiastic about the ceasefire as Iran and Syria, but for opposite reasons. To many in the Middle East, it looks like the US agenda is failing. That makes further conflicts and squeezes on oil supply more likely.
Thames Water £7bn auction impaired by regulators 16 Aug 2006 Poorly run companies deserve the ultimate market sanction takeover by a bettermanaged competitor. Badly managed Thames Water is now for sale. Regulators are doing a disservice by only allowing financial bidders for the group.
Investors prefer bonds 16 Aug 2006 Fund managers are more comfortable with bond valuations, according to a Merrill Lynch survey. But with yields low relative to inflation, there s little room for error in their calculations.
Suntrust’s stumble could herald rising bank woes 16 Aug 2006 Investors weren t convinced by the Atlanta bank s explanation that a $200m troubled loan was just a one off. The stock dropped 4%. This could mark the start of a broader credit downturn. With loan demand falling too, US bank earnings look vulnerable.
NTL bid talk looks premature 16 Aug 2006 Private equity has European cable on its shopping list. But that doesn t mean the UK s NTL will fall to a buyout soon. With synergies and rebranding gains in the pipeline, buyout groups may need to pay richly. That could make a deal hard to stack up.
Utah should leave securities rules to the SEC 15 Aug 2006 The state s attempt to crack down on naked shorting suffered a blow as Wall Street s trade group delayed a new law. Many areas of law are better left in the hands of the states. Securities legislation is not one of them.
Rosneft bankers stand by their client 15 Aug 2006 The underwriters of the Russian oil giant s IPO have exercised 58% of their overallotment option, paying more than the market price. Investment banks don t always accept losses so readily. But the cost of loyalty is minimal. And Rosneft is no ordinary client.
Bernard Taylor proves his deal-making credentials 15 Aug 2006 The former JP Morgan vicechairman has sold his virtually nonexistent boutique for a chunky stake in Evercore worth up to $50m. Now Taylor s task is to show he can build Evercore s European arm into another Greenhill. If he can, even Evercore will be a winner.
A hedge fund strategy goes retail 15 Aug 2006 Variance swaps pay out when actual volatility proves greater than implied. That doesn t happen often, so writing them has been lucrative. Dresdner has created funds that bring these swaps to conventional investors. It looks like a good arbitrage play, as long as it lasts.
Dell starts to emit black smoke 15 Aug 2006 The PC giant has recalled 4.1m batteries due to a risk they may catch fire the largest recall ever by a computer company. Dell s business model has come apart due to falling PC prices and rising customer demands. This is another large kick to Dell.
PepsiCo new chief is sign of the Indian times 15 Aug 2006 Indra Nooyi is a NRI, nonresident Indian an increasingly successful and important business community. If India could reap this talent, the economy would grow even faster. But even NRI Lakshmi Mittal is finding it hard to invest there.
Paulson keeps Goldman’s Washington axis alive 15 Aug 2006 If the exGoldman boss taps his longtime pal Robert Steel at the Treasury, he d maintain the company's status as a political uberinsider. But with the rapid evolution of Goldman s culture, it is questionable whether the firm s stature in Washington can continue postPaulson.
UBS’s fixed income repairs bear fruit just in time 15 Aug 2006 The Swiss bank's investment in fixed income shows signs of paying off in Q2. It picked up the slack from a slower equity performance. Just as well. With more difficult conditions ahead, UBS needs to show it can take profits wherever they are available to retain its premium.
Telecoms chiefs feeling the heat 14 Aug 2006 Deutsche Telekom s chief is the latest to feel the pressure. It s also been tough in the UK, France, Spain and Switzerland. The stocks are performing poorly, so it s no surprise that investors are miffed. But executive blood may not be the solution.
Eurozone good news keeps on coming 14 Aug 2006 The annualised growth rate of 3.6% in the second quarter was the best since 2000. But past easy money and big government deficits helped. With those supports eroding, it s easy to be gloomy. But more jobs could come to the rescue.
Trade growth adds risks to the world 14 Aug 2006 World trade continues to increase much faster than GDP. That should make the world richer and safer. But uneven exchange rates have encouraged bad investments in both the US and its trading partners. So more trade means more future pain.
Mining M&A manna for arb funds 14 Aug 2006 Betting on mergers hasn t been a lucrative strategy for hedge funds of late. The multiparty fight for Canadian miners should give a boost. The battle has caused wild gyrations in the bidders share prices. The bad news is this profitable play seems to be drawing to a close.
Can hedge funds get a hold on Ahold? 14 Aug 2006 Centaurus and Paulson want the E11bn retail group to sell its US businesses. They say that would add 30% to the share price. With only a 6.4% stake, the funds clout is limited. But if their case is good, they should be able to get other shareholders onside.
Local governments unlikely to find lucre in forex 14 Aug 2006 Several UK local council funds are investing billions in foreign currency funds according to a report. When local governments get involved in exotic investments the results are often interesting. The returns usually aren t.