Apple takes on mobile carriers with iPhone 10 Jan 2007 The tech company is likely to grab a sizable chunk of the market for mobile phones with its impressive new gadget. Moreover, Apple is going where other handset makers like Nokia went before and failed bypassing operators to sell content.
Northwest enters US Airways’ airspace 10 Jan 2007 Delta has done its best to keep US Airways on the tarmac. But its rival s sweetened $10.2bn offer has doomed Delta s goitalone strategy. After its overpriced acquisition of Skype hurt confidence in management and left investors puzzled, this looks like a smart deal. This may explain why Delta is cuddling up to its other rival in the bankruptcy court, Northwest.
Japan’s nanny approach to credit may provide model 10 Jan 2007 New rules on interest rates, credit limits and excessive lending hurt the financial industry. Citigroup s closing 80% of Japan branches. However, the rules protect consumers from themselves. That could be healthier in the long run for the nation s economy.
Ebay’s StubHub purchase is the anti-Skype 10 Jan 2007 The online ticket broker which cost it $310m fits perfectly with Ebay's mission of matching buyers and sellers electronically. After its overpriced acquisition of Skype hurt confidence in management and left investors puzzled , this looks like a smart deal.
Portugal Telecom investors likely to miss out on E2bn-E3bn 10 Jan 2007 They should have got a big premium given a hostile bid and a rising telecoms sector. In fact, they ll probably sell out for a miserly price. Portuguese nationalism and arcane takeover rules are the main culprits. The big winner is Sonaecom which looks set to get a bargain.
Venezuela’s antics all too typical of the region 9 Jan 2007 President Chavez plans to nationalise the country s utilities. The likely result is a ripoff for shareholders, including foreigners. It fits right into a Latin American pattern of poor property rights and poor growth. Investors should respond with a big discount.
Apple’s Jobs not clear of options scandal 9 Jan 2007 The company s faithful are wondering how they can get the new cell phoneiPod Steve Jobs unveiled at his annual MacWorld love fest. Investors should be more exercised over another question. Will prosecutors investigating options scandals make an example of Jobs?
Trade confabs rarely live up to promises 9 Jan 2007 Executives at boondoggles like this week s consumer electronics gig and the Detroit car show make grand promises about rosier futures. But market demand for their showcased gadgets and fancy car models rarely materialise. Executives would do better to stay mum.
Citigroup seeks private equity middle ground 9 Jan 2007 Citi s new $3.3bn fund doesn t have enough firepower to compete with the big dogs. Its biggest check probably won t exceed $330m. The main purpose of its new private equity fund will be to coinvest. For a firm that desperately needs focus, it s not the worst strategy.
A buyout won’t fill the Gap’s holes 9 Jan 2007 The clothing retailer hired Goldman Sachs to explore its options. Given its struggles, its founders may be keen to sell out. A buyout would be doable. But decent returns are dependent on something private equity has avoided of late hard operational work.
Nasdaq’s LSE attacks falling on deaf ears 9 Jan 2007 The US exchange has switched its attack to the LSE s high trading fees in an attempt to sow doubts over its standalone valuation. But the war of words only highlights the gulf between what Nasdaq s prepared to pay and what hedge funds seem willing to accept.
M&S widens gap between the good, bad and ugly 9 Jan 2007 The recovering UK retailer grew 9% over Christmas, while others suffered bankruptcy, profit warnings and plummeting sales. Expect an even greater divergence between winners and losers in 2007 and a shakeout of those perching nervously in the middle.
Hedge fund bluff backfires on Jana 9 Jan 2007 Jana Partners bid $1.8bn for Houston Exploration in June. Now it s accepting an offer some 15% less from a rival oil group. What gives? The fund s hopes to flush out a buyer to pay more failed. What s harder to fathom is why Houston didn t bite Jana s hand off.
Suez shareholders won’t necessarily miss a bid battle 9 Jan 2007 Sure, Pinault is likely to shut up now he has been given a threeweek deadline to come up with a firm bid for the utility. But the French billionaire would only be out of action for six months. The timing works pretty well for any bid battle and French politics.
Trade deal would give investors insurance 9 Jan 2007 The Doha round is showing feeble signs of life. A successful deal wouldn t move markets. They are already quite global. But protectionism is a genuine threat. And a healthy trade system offers some protection against it.
Cairn India IPO tanks 9 Jan 2007 Shares in India s largest IPO fell 14% on debut. The dip in the oil price since pricing is only partly to blame. It s hard to escape the conclusion that Cairn, the exploration company s parent, was simply too greedy.
GE says no to club deals 9 Jan 2007 The industrial conglomerate s dominance allows it to prohibit LBO firms from ganging together in the $10bn auction of its plastics business. But as long as liquidity remains abundant, private equity bidders should have little trouble raising the $3bnplus equity cheque.
Caremark directors wrongly snub $25bn offer 8 Jan 2007 The benefits manager s board has nixed a hostile bid from rival Express Scripts in favour of an inferior $22bn offer from drug chain CVS. Their concerns an Express bid would trigger antitrust concern and leave the company overleveraged don t stand up to much scrutiny.
UK house boom brings speculation to the masses 8 Jan 2007 Homeowners are now participating a highstakes financial gamble. The house priceincome ratio is 10% higher than at the 1989 peak. Prices are rising at a 10% rate, but a crash is still possible. The national housing hedge fund is a big headache for the Bank of England.
Highbridge solves the diversification riddle 8 Jan 2007 Money managers can have trouble expanding into new asset classes. Hiring s a crapshoot. Acquisitions are costly, and difficult to integrate. Highbridge Capital s purchase of a stake in commodity trader Louis Dreyfus via its flagship fund looks like a brilliant solution.
Hedge fund failures crave a second chance 8 Jan 2007 Amaranth s founder wants another try months after his hedge fund s spectacular collapse. With investigations under way this looks early. However, Wall Street has allowed busted investors a new lease of life. As they won t get a third chance it may even improve performance. However, Wall Street has allowed busted investors a new lease of life. If they won t get a third chance it may even improve performance.
Grain rally result of bad energy policy 8 Jan 2007 The US subsidises domestic production of biofuels. It has to, since the products couldn t survive in a free market. The boondoggle has helped farmers with higher corn and soybean prices. But the country would be better off with imported ethanol.
Putin’s thumbs are on Europe’s gas-pipe in Belarus 8 Jan 2007 But this is a futile gesture by Belarus and won't stop Russia, which has already tightened its grip on Europe's gas supplies. Belarus has cut off Russian oil supplies to Poland in protest at Russia's decision to hike its gas prices and take control of its pipeline.
France should scrap its wealth tax 8 Jan 2007 Chirac wants to cut the corporate tax rate. He s a lame duck, but it s good to hear any French leader talk sensibly about tax competition. If only the presidential contenders would speak out. Abolishing the wealth tax would be a good place for them to start. Don t count on it.
Don’t bet on a British Airways LBO 8 Jan 2007 Talk that the UK airline may now become a takeover target may be just another sign of exuberance in the buyout market. BA may have solved the pension deficit problem. And it is throwing off cash. But BA is not a straightforward target.
Exchange-traded credit derivatives don’t threaten Wall Street 8 Jan 2007 New products due to be launched by Eurex and CME may succeed but only if the biggest dealers support them. They'll do that for the least profitable products. If the exchanges compete for high margin business, dealers will boycott new contracts.
Green’s retreat puts HSBC’s CEO on the spot 8 Jan 2007 The move strengthens his grip. But it puts him further in the firing line with investors frustrated at its underperformance. The bank s chairman, Stephen Green, has ceded some of his predecessors wideranging powers. That s a mixed blessing for CEO Mike Geoghegan
Korean markets look to be more volatile in 2007 5 Jan 2007 Credit Suisse lost $120m when Korean stocks hit a flat calm in 2006. The markets are likely to be less docile this year. A fiscal gamble in the half will be succeeded by a highstakes Presidential election.
Amaranth exposes shortcoming of high water marks 5 Jan 2007 High water marks are intended to keep hedge fund managers focused on risk control. But they also encourage losing funds to take on greater risks. If bets turn sour traders can always jump ship.
Alliance & Leicester quick to adopt Basel 2 5 Jan 2007 That s hardly surprising. The capital accord is easy on mortgage lenders. It hands the UK bank a chance to create value by freeing reserves. Early adoption may help underpin A&L shares, which flagged as bid talk waned. It might renew interest from suitors less favoured by Basel 2.