Unilever finally clears the U-bend 2 Aug 2007 A year ago critics claimed only a breakup could save the AngloDutch consumer group. Now profitability is rising, and so are the shares. Boss Patrick Cescau still has a long way to go to. But he has won the benefit of the doubt and Unilever s stock could rise further. Boss Patrick Cescau still has a long way to go. But he has won the benefit of the doubt and Unilever s stock could rise further.
Nasdaq opts not to fight futile battle 2 Aug 2007 The US exchange s decision to support the E5.8bn LSE/Borsa Italiana tieup looks canny. A vain novote would have brought no benefit. Nasdaq probably still covets the LSE. Yet the balance has changed. A merger may now seem more appropriate than a takeover.
Cartels may hurt airlines more than passengers 2 Aug 2007 BA and Korean Air Lines have to pay $850m for agreeing on fuel surcharges. That probably dwarfs the gains from breaking the law. Pricesignalling is hard to avoid in commodity industries. Companies just have to remember to do it legally.
Macquarie fails to learn from the past 1 Aug 2007 Two of the Australian bank s credit investment vehicles could suffer serious losses, despite its trumpeted expertise in risk management. Its funds have been hammered by the same hazard that caused many of the fund failures of the past 10 years liquidity risk.
ICI should think twice about Akzo’s 650p offer 1 Aug 2007 On a standalone basis, it s hard to value the UK paint group at more than 520p. Even with big synergies, the Dutch offer looks pretty full. No wonder a big Akzo shareholder is balking at the bid. If ICI is too stubborn, its shareholders could end up losing out.
India needs to stamp on brakes, not tap them 1 Aug 2007 The Reserve Bank of India increased its cash deposit rate to 7%. That will remove only a little liquidity from the system. Indian inflation is higher than it looks and the money supply is rising much too fast. Without more restraint, it could end in a crash.
Blackstone doesn’t deserve sell-side’s love 1 Aug 2007 Almost all the Wall Street analysts that cover the private equity firm kicked off their research with a buy rating. These calls might please Blackstone, which pays lucrative fees to investment banks. But they ignore the challenges the LBO shop faces.
RadioShack still needs tuning 1 Aug 2007 RadioShack shares have surged in the past year on high hopes of a turnaround. But its latest results were a disappointment. While the company has trimmed costs, it still has a long way to go to win back customers. Investors should tread carefully.
Nervous investors ignore strong economy 1 Aug 2007 Markets are hypersensitive to credit problems that s why they suddenly tumbled on Tuesday. Healthy economic releases were brushed aside. That makes sense as long as liquidity is what matters. A strong economy could even be bad for markets, because it makes rate cuts unlikely.
Deutsche’s exuberance may fall on deaf ears 1 Aug 2007 The German bank has defied downbeat forecasts. It raised Q2 profits by a creditable 32% and thinks it can ride out the current market storm. But given Deutsche s reliance on investment banking for growth, that may not be enough to persuade investors to close its discount to peers. The German bank has defied downbeat forecasts with a 32% increase in pretax profits. It thinks it can ride out current market storms. But given Deutsche s reliance on investment banking, investors may not be persuaded to close the shares' discount to peers.
Morgan Stanley is right to hive off MSCI 1 Aug 2007 The data and riskmanagement company is little more than a blip on the Wall Street giant s earnings. But as a standalone business, MSCI should command a higher multiple than its parent, and could be worth as much as $3bn.
Cadbury should spin-off drinks unit 1 Aug 2007 The UK confectioner wants to sell the US business, which makes 40% of revenues, to private equity. But buyers may have lost their appetite. Yet Cadbury can split in two whatever happens to equity markets. It might take longer but investors can sell later if a buyer returns.
Private equity should heed Walker warnings 1 Aug 2007 Strange but true, some buyout groups have reservations about the largely commonsense disclosure guidelines proposed by Sir David Walker. Surely, even those not persuaded by the carrot of public acceptance ought to be wary of the stick of public shaming, or even legislation?
Imperial Tobacco rises above credit wobbles 1 Aug 2007 While other deals unravel, Imperial s E16bn offer for rival Altadis looks safe. Banks have given its debt package a tight guarantee. One reason is its stable cash flows. Another is that the banks get flexibility in timing and pricing Imperial s huge E8bn rights issue.