Credit buyers could lose in insider trading battle 15 Dec 2006 Why has a massive collection of trade groups pledged to fight against insider trading? Because it could be a big problem. But it will be hard to stamp it out, especially in Europe. Investors and traders will have to get used to working with less information.
Locusts give German media its solution 15 Dec 2006 It's ironic ProSiebenSat ends up with private equity after regulators nixed the German solution politicians sought. But KKR and Permira have come up with a German solution of their own.
Bernanke kowtows in China 15 Dec 2006 The loosetalking Fed Chairman acted has dropped references to China subsidising exports with its cheap currency. This would have fuelled protectionism in the US and also ignores how China s policy also brings both liquidity and low interest rates.
BT downplays consumers in effort to protect rerating 14 Dec 2006 The UK telecoms group is trumpeting low exposure to the residential market. It is saying even its consumer arm is now focused on business. The former incumbent is happily abandoning its past. This shift should help the wellperforming shares hang on to their gains.
Stock markets highs not really justified 14 Dec 2006 Some bulls think a 17.5% increase in global share prices this year is fair, since profits have kept up with prices. But they re missing all the ways that liquidity helps profitability. Take that away, and shares are just another overvalued asset class.
Senator’s illness jolts Washington 14 Dec 2006 The grave illness of Senator Tim Johnson raises the prospect that Democrats could lose their onevote edge. While VicePresident Cheney might be empowered to break 5050 ties, Democrats may still control the agenda.
BP faces more civil charges over old US trading slip-ups 14 Dec 2006 Regulators everywhere are worried about possible market abuse by large energy firms, be they US, European or Russian. BP s problem is that a series of US cockups keeps it in the regulatory glare and harsh light is never flattering.
Russia’s western apologists should stop apologising 14 Dec 2006 With all the money sloshing around Russia, it s not surprising that bankers are making excuses for the country s bullyboy tactics. But with Gazprom throwing its weight around and journalists being murdered, there s too much to apologise about.
Sly Bailey’s revamp is all smoke and no Mirror 14 Dec 2006 The Trinity Mirror boss is selling bits of the UK newspaper group. But its flagship title is struggling, and the timing of a sale looks odd. Still, Bailey had to do something. As the sector gets tougher, it is a good moment to build up investor goodwill.
Permira walks away from EMI 14 Dec 2006 It seems the private equity group just couldn t make the numbers work and got cold feet. That's not too surprising. The music market is still struggling. And the regulatory risks on a future breakup of the UK music group look higher than ever.
Turkey should diversify its friends 13 Dec 2006 Rebuffed again by the EU, it needs a trade deal with China. This would increase its bargaining power, and bring fresh growth opportunities. For China, Turkey s EU customs union offers a way round possible EU trade barriers.
Siemens scandal could hit von Pierer hardest 13 Dec 2006 At first, allegations of bribery at the German group looked bad for boss Klaus Kleinfeld. But now it s his chairman who s in the spotlight. This could result in von Pierer being forced out. Were that to happen it wouldn't necessarily be a disaster for Siemens.
Hedge fund trackers aren’t perfect, but welcome alternative 13 Dec 2006 Merrill is joining Goldman in the race to build new hedge fund clones. They re using derivatives to gain absolute returns without big fees. Eddie Lampert and other top managers have little to fear. But marginal firms and funds of funds have plenty of reason to be nervous.
Hutchison may flog $14bn family silver 13 Dec 2006 This will disappoint those who thought the era of big disposals was over. And it will do nothing to close Hutch's sumoftheparts discount. The Hong Kongbased conglomerate may be about to sell more assets to fund losses at its 3 mobile unit this time its Indian interests.
Italy the real loser in failed E25bn Autostrade deal 13 Dec 2006 The Italian motorway company and Spain s Abertis have shelved plans to merge after the government in Rome made it practically impossible. This is a bad outcome for Autostrade shareholders. But it s even worse for Italy s image.
ECB is wrong about hedge funds 13 Dec 2006 Its proposal for a global register of hedge funds would serve no useful purpose and could make worse the problem it is supposed to solve. To the extent hedge funds do pose a risk to financial stability which is arguable the ECB should take a leaf out of the UK s book.
Google, Morgan Stanley, create novel options 13 Dec 2006 Google hopes to boost morale by making vested employee stock options liquid and tradeable through an online auction. But the clearest winner is Morgan Stanley, which will snare other business by serving as Google's sole auctioneer.
Is Lehman underpaying its chief executive? 13 Dec 2006 The board is slashing Dick Fuld s stock bonus by 27%. That's odd given Lehman is poised to grow profits by nearly a fifth this year. But look again revenue and income growth this year has lagged rivals. So has its stock price. The board s impecuniousness is deserved.
Apple’s online music sales bogging down 12 Dec 2006 The tech group s iTunes music store dominates the market. Yet sales have actually fallen by 65% since January, according to a new report. This appears too large to be strictly seasonal. The wall protecting Apple s iPod from competition may be smaller than commonly thought.
Are edge-seeking hedgies the new NM Rothschild? 12 Dec 2006 Like the 19th century financier, hedge funds are tapping into experts and lobbyists for advance word of marketmoving news. This may resemble pay for inside dope, which wouldn't be right. Yet a great moral imperative also resides with those peddling info.
Albert Frere’s intentions set Paris abuzz 12 Dec 2006 The Belgian financier is a power broker in the SuezGdF merger. He has upped his stake in Lafarge. Markets wonder what he will do next. Frere has E14bn invested in French companies, and more than E3bn in cash to spend. And he has never been known as a handsoff investor.
Wal-Mart sneezes, Best Buy catches flu 12 Dec 2006 The struggling retail giant s costcutting push into electronics has made life hard on speciality retailers. It s unlikely to help WalMart and already wounded Best Buy. The only winners are US consumers.
Sabre LBO is double-edged sword for private equity 12 Dec 2006 Terrorist attacks and other threats can throw travel services companies into chaos. Sabre Holdings, Travelocity s owner, is no exception. While investors have partly discounted the company s value for this reason, lenders should be wary of financing a $5bn bid.
Why breaking up BAA may not make sense 12 Dec 2006 The UK s OFT is urging a breakup of the owner of Heathrow and Gatwick. But that would just create a series of local monopolies. What BAA needs is tighter regulation to make sure it doesn t abuse its monopoly power.
Sistema dusts off Soros’s Russian telecom plan 12 Dec 2006 The billionaire came unstuck in 1997 with his $1.9bn Svyazinvest investment. He hoped to cash in on Russian telecoms restructuring. Now a Russian company is trying again. Sistema is better placed than Soros was. But there are still some big risks.
Paulson and Bernanke visit the wrong country 12 Dec 2006 The US treasury secretary and the Fed chief are going to China to talk about its $200bn trade surplus with the US. That s worth worrying about, but the oil exporters surplus is $500bn, more than twice as high. And they are less well disposed to the US.
Wall Street poaches again from the gamekeepers 12 Dec 2006 JP Morgan's hiring of Stephen Cutler as general counsel follows the trend of recruiting senior SEC lawyers to lofty Wall Street perches. Cutler is like an insurance policy for when disaster strikes. JPMorgan could also use a rethink of its legal tactics.
US protectionists take on Russian Oligarchs 12 Dec 2006 The takeover of a small US steel company by Russia s Evraz hardly threatens US national or economic security. What s likely to be judged is Russian reciprocity toward western investment. The Kremlin s recent illtreatment of Shell doesn t help.
Macquarie surpasses BC Partners with E1.4bn Techem bid 12 Dec 2006 Infrastructure investor Macquarie is paying richly to top a bid from buyout firm BC Partners. It has also raised its Techem stake to 27%. Macquarie s advantage is that it holds assets for longer and has lower return expectations. It may be hard for BC Partners to beat it.
Goldman’s earnings flattered by one-offs 12 Dec 2006 There s no question the investment bank has had a fantastic year. But its fourthquarter showing isn t as impressive as it first appears. Equities aside, Goldman s operating businesses look flat. The firm had to rely on proprietary investments in Asia to beat estimates.