HBOS’s second wobble panics investors 27 Feb 2008 First, the old Halifax business lost its way in the UK mortgage market. Now the old Bank of Scotland business has seen impairments shoot up because of risky corporate lending. Hornby, the CEO wunderkind, needs to get a grip.
Dollar bears have better case than bond bulls 27 Feb 2008 The US currency crossed the $1.50euro line. It s a vote of no confidence in the country s willingness to avoid persistent inflation. The 3.8% yield on 10year treasury bonds says the opposite. The exploding government deficit could shake the bond market s confidence.
Goldman appoints two new vice chairmen 27 Feb 2008 That title at an investment bank can mean a great many things depending on where you are. One thing it rarely translates into, however, is a promotion to the top job. So what do you say if you re Michael Sherwood or Michael Evans? Thanks?
Tiscali’s days are numbered 27 Feb 2008 The European broadband operator disappointed investors by waving off its chief executive Tommaso Pompei without having a sale lined up. Tiscali s existing strategic plan is ambitious, and financially the group is stretched. If it wants to create value, a sale looks inevitable.
Fannie and Freddie shouldn’t be given free rein 27 Feb 2008 The US mortgage giants regulator has taken the brakes off their ability to buy more home loans. The move might lubricate the jammedup market, but in the long run it could make the two conflicted groups even tougher to control and increase taxpayers potential exposure.
Citadel might go public – the Egyptian one 27 Feb 2008 Sorry, Ken Griffin. A $7bn Cairobased private equity group bearing the Citadel name may beat you to the markets with an IPO. That is, unless a big private equity rival looking for a regional presence in the Middle East doesn t preempt a public offering.
Blackstone’s energy success may be tough to repeat 27 Feb 2008 The buyout shop has teamed up with Petroplus and First Reserve to buy US refining assets. It has a profitable history in the sector. But refineries look pricier than when Blackstone bought Premcor in 1997. And without much leverage, its returns could be hard to replicate.
Dubai tightens screws on Colonial 27 Feb 2008 The emirate s sovereign wealth fund has offered shareholders in the troubled Spanish property firm a miserly cash premium or a bond that pays no cash for four years. It s not so great for Colonial shareholders. But they don t have much bargaining power.
SWFs shouldn’t become politicians’ plaything 26 Feb 2008 A proposed law in California would stop the state s two pension funds investing in private equity groups with ties to undesirable sovereign funds. Such populist attacks risk undermining attempts by international policy makers to integrate SWFs in the global financial system.
Personal view: Libertarian banking 26 Feb 2008 Liechtenstein has been roundly criticised for its protection of German tax cheats. Martin Hutchinson doesn t think the critics have the moral high ground. He argues that bank secrecy is a civil liberty worth protecting.
EU should avoid a French energy stitch-up 26 Feb 2008 In order to merge, SuezGDF must sell Belgian gas subsidiary Distrigas. The likely buyer is EDF. The French government then would control both the French and Belgian energy markets and undermine Brussels attempt to jolt the continent s stagnant utilities.
Environmentalists can’t stop the coal boom 26 Feb 2008 With prices double their yearago level, producers are enjoying a bonanza. It won t stop soon. India and China are both major coal users with few alternatives. Environmentalists may bleat, but the World Coal Institute s 2030 production target may be very conservative.
UK property bulls should put money where mouth is 26 Feb 2008 Most real estate bosses say the 12% fall in UK values since summer won t get any worse. If they mean it, they should buy property derivatives, which are forecasting the same fall again in 2008 they could earn a tidy profit if Armageddon is avoided. If not, then talk is cheap.
Listed hedge funds may outshine private equity – for now 26 Feb 2008 Shareholders liked OchZiff's earnings, and sent the stock up more than 7%. That makes sense hedge funds should be able to profit from volatile conditions. Buyout firms depend more on bullish markets. So rare public examples like Blackstone may struggle to impress shareholders.
Branson can’t put his Money where his mouth is 26 Feb 2008 Virgin boasted its brand, management and liquidity could revitalise Northern Rock. If Branson believed his own hype, he would use those resources to buy another troubled UK lender. But he probably won t. That exposes the Rock bid as a ploy to profit from government largesse.
Credit storm reaches Hungary 26 Feb 2008 When liquidity flows were abundant, Hungary and its central European peers could run big trade deficits without any trouble. But inflation is rising, foreigners are retreating and the central bank has abandoned the forint s trading band. Stagflation is likely to come next.
Sarkozy’s attacks on Bouton could backfire 26 Feb 2008 The French president wants the boss of Société Générale to go. It s not necessarily a bad idea the Kerviel trading scandal raises serious doubts about the French bank s culture. But Bouton could become a symbol of resistance to meddling by the increasingly unpopular Sarko.
Visa’s huge IPO comes with caveats 26 Feb 2008 The $19bn offering will be at a discount to rival MasterCard whose stock is up nearly fivefold since its IPO in 2006. Going ahead with the Visa deal underlines how robust the card business is. Still, a weak economy and tightening by lenders could drag on both groups' growth.
StanChart speeds evolution to predator from prey 26 Feb 2008 The emerging markets bank looks to have raised acquisitions up its agenda. It looks an even more credible bidder as record results supported its premium rating and capital ratios. That s a big turnaround from two years ago, when investors viewed StanChart as a perennial target.
Liechtenstein will struggle to withstand twin assault 25 Feb 2008 The Alpine tax haven's reputation for bank secrecy will be badly damaged by revelations that the UK, as well as Germany, has paid for stolen bank details. The tactic is legally defensible and will make current and future cheats think twice.
Should property companies diversify or specialise? 25 Feb 2008 Big UK real estate investment trusts mostly run diversified portfolios. That's worked well Hammerson's asset value only fell slightly in the second half of 2007. But Land Securities is splitting up in the middle of a downturn. That may sound crazy, but investors could benefit.
Tech M&A gets more violent 25 Feb 2008 Add Electronic Arts unsolicited $2bn bid for smaller video game rival TakeTwo to Microsoft s tilt at Yahoo, and tech is looking like a hotbed of hostility. Huge potential synergies, a maturing industry and disgruntled shareholders all add fuel to the fire.
Is there more than rhetoric to Obama’s protectionism? 25 Feb 2008 The Democrat s enthusiasm for trade protections is red meat for Democrat voters in Ohio, a state badly affected by US deindustrialisation that holds its primary next week. But his votes on CAFTA and a Peru trade deal suggest his election might genuinely erect new barriers.
Easy money turns small grain shortfall into crisis 25 Feb 2008 For rich consumers, expensive wheat is a bother. In poor countries, it can be disastrous. Governments and aid agencies are scrambling to keep up. Part of the problem is the financial system s still ample liquidity. Cheap credit pushes the marketbalancing price way up.
Nordbank may not open subprime lawsuit floodgates 25 Feb 2008 The German bank is suing UBS for misselling CDOs. As a sophisticated investor which trod this road before, it s hardly a textbook victim. So a loss might not discourage other plaintiffs. But even investors with stronger cases might have trouble winning big this time around.
Hellman & Friedman keeps it simple, gets buyouts done 25 Feb 2008 The buyout house has announced two $1bnplus deals since the credit crunch began a better record than other top funds. The firm s formula is simple: not bingeing on oversized deals and doing deals alone. That seems to be helping in today s tougher times.
SWFs go cap in hand…to themselves 22 Feb 2008 Gulf International Bank is raising $1bn to offset losses related to US subprime. They didn t have to go far the Bahrainbased lender is jointly owned by the Gulf States who ve already spent billions bailing out Western banks.
Who takes the bigger risk – Cerberus or its co-investors? 22 Feb 2008 The buyout firm now says it doesn t have huge stakes in Chrysler and GMAC. That would normally cheer its investors. But each deal required a huge gob of equity, and Cerberus asked its investors to double down. They might not be so pleased.
Investors may rue frontier markets craze 22 Feb 2008 These least advanced emerging markets offer better returns and lower correlations than stocks in more mature emerging countries. And derivatives now make it easier than ever to place bets from Bulgaria to Bangladesh. But this could turn out to be a recipe for disaster.
SAB should sit out brewers’ binge 22 Feb 2008 While other brewers mull over deals, the UK brewer has so far remained aloof. That discretion is no bad thing. Beer deals are pricy and SAB's last big buy, Miller, hasn't knocked the lights out.