Resilient Julius Baer could be a safe haven 8 Feb 2008 The Swiss private bank posted a 31% profit rise last year. That s partly due to booming demand for wealth management from Asia, plus the current weakness of rivals such as UBS. No bank is entirely safe from the credit storm, but Baer looks safer than most.
China’s $4bn Flowers deal looks shrewd 8 Feb 2008 By channelling its investment through private equity, the Chinese stateowned fund gets a degree of political cover and signals that its aims are financial. But has China chosen the right vehicle? Flowers has taken some knocks of late and will need to raise his game.
Digby Jones is wrong on UK non-dom tax 8 Feb 2008 The UK trade minister thinks the government s plans to tax wealthy foreigners will damage London. But that smacks of City special pleading. Taxing nondoms is right in principle even if the proposals aren t perfect. London will do just fine.
Dangerous driving for European carmakers 8 Feb 2008 Peugeot has started the reporting season with strong results, but investors will be wary. Demand is slowing. The French face strategic challenges and the Germans are endangered by a weak dollar. No wonder the European carmakers shares have done badly. They could fall further.
British Land set to weather UK real estate storm 7 Feb 2008 The UK Reit has slashed asset values by 16%, but its closedend structure means investors, not the company, feel most of the pain. Unless UK property prices collapse totally, British Land will survive the downturn. It could even profit from the distress of forced sellers.
Bid prospects could help SocGen bag rights issue 7 Feb 2008 The French bank is going for E5.5bn of new equity, replacing the capital lost by a rogue trader. Investors are set to go along, lured by a possible takeover premium and a near25% discount. A smooth placing would be good news for underwriters JP Morgan and Morgan Stanley.
Warburg’s raised MBIA bet brings it closer to break-even 7 Feb 2008 The private equity shop bought shares at a price lower than its original investment, bringing down its cost basis and reducing its dilution. But the stock still needs to rise by nearly a third before Warburg is in the black.
McCain can help himself with VP choice 7 Feb 2008 With Romney out, the Arizona senator will clinch the Republican nomination. Now he has to figure out how to win in November. With Republicans unpopular, and lacking a background in economics or management, he needs a running mate who turns voter perceptions upside down.
Will Russia keep Ukraine out of the WTO? 7 Feb 2008 It might try. The Ukrainian government says that its membership of the World Trade Organisation will ease Russia s path in, but it has to persuade a fractious parliament with a strong proRussian minority. Russia wants to join the WTO, but it might want an unstable Ukraine more.
Is it time for Shell to call it quits in Nigeria? 7 Feb 2008 Shell already hands 95% of oil revenues to the government. In return it has to deal with creaky infrastructure, angry rebels, and now a regime bent on taking even more of the profits. Nigeria s offshore fields look promising, but the onshore effort may not be worth the trouble.
Schwarzman should hire Barry Manilow for his 61st birthday 7 Feb 2008 Rod Stewart headlined at the Blackstone boss s 60th birthday bacchanal. That made sense Some guys have all the luck captured private equity s zeitgeist. This year, with Blackstone s stock plumbing new lows, Manilow s We live on borrowed time might be more appropriate.
It’s official – UK government backs Rock debt 7 Feb 2008 The Office for National Statistics has confirmed what everyone knew that the government is on the hook for £75bn of Northern Rock s liabilities. It would almost certainly do the same for any other stricken bank. It should take up the authority that goes with the responsibility.
Should Deutsche be rewarded for its resilience? 7 Feb 2008 Probably not. The German bank has ably navigated the subprime storm, avoiding heavy writedowns. Its shares haven t reaped the benefit, however, and are comparatively cheap. But Deutsche relies on capital markets more than European peers. That means a second wave could hit harder.
S&P tries to rebuild confidence – and profits 7 Feb 2008 The rating agency s latest governance proposals are helpful. But the public service spin invites scepticism. It s largely about money: structured finance revenues at rival Moody s tumbled 40% last quarter. The problem for investors is that raters still aren t really accountable.
Santander’s ambitions halted at the Pennsylvania border 7 Feb 2008 The Spanish bank s 25% stake in Sovereign Bancorp was controversial two years ago. Now it has taken a $1.1bn writedown. And the terms of the deal limit its ability to snap up other US targets. Given the Sovereign botch, Santander s shareholders might see that as a silver lining.
BT counts cost of broadband open house party 7 Feb 2008 The UK telecoms group is suffering after regulators forced it to let competitors in on its network. Revenues at its wholesale division fell 11% in Q3. That s put BT deeper in the mire with investors. No wonder European rivals want to keep a firm grip on their own networks.
Happy birthday, credit crunch 7 Feb 2008 It s the first anniversary of HSBC and New Century revealing mounting problems with subprime loans. Once thought containable, the US s mortgage woes were instead the catalyst for bursting the broader leveraged credit bubble. So far, only more confusion seems to lie ahead.
Swiss watch business ticks even faster 7 Feb 2008 These fancy timepieces don t only resist wear and tear. So far, they re holding up against a hostile economy. Fine craftsmanship helps, but the mainspring is new Asian money. Hong Kong is now a bigger market than the US. The shift provides protection against a global slowdown.
Rio rightly rejects BHP sweetened bid 6 Feb 2008 The UK miner has wisely rebuffed BHP Billiton's raised $150bn offer. The battle still has months to go, and there s much uncertainty over how China will play its hand. Rio can probably extract more.
Will Deutsche practice what it has been preaching? 6 Feb 2008 Josef Ackermann, the bank s boss, has given two speeches urging banks to disclose their subprime and structured credit exposure. Most listened and followed Deutsche s lead. Now investors are spooked by many more credit worries. Ackermann needs to be transparent about these too.
Is Bud vulnerable to an Inbev bid? 6 Feb 2008 Rumours of an Anheuser/Inbev tieup have continued to brew. While the Busch family may find the idea hard to swallow, Inbev is now in a much better position to make a bid. If a friendly deal can't be hatched over a few beers, a brawl can't be counted out.
Macquarie’s Moss picks a tough time to leave 6 Feb 2008 The boss of Australian bank has a reputation for managing risk and keeping Macquarie s aggressive dealmakers in line. He is retiring just when the bank s farflung businesses are pressured by the credit crunch and economic uncertainty. Investors are right to be concerned.
Virgin is making a killing – or the market is mad 6 Feb 2008 Branson's consortium says it won t make a killing from buying Northern Rock. But that s not what the banks' shares show. The implied paper profit on the deal for Virgin and its chums is £600m.
LVMH lifts a little gloom from luxury market 6 Feb 2008 Plummeting consumer confidence looked ready to whack the upscale fashion market. But the French giant s results suggest haute couture so far has been more recessionproof than first imagined. Rising Asian demand will do at least a little to offset weakening US spending.
SWFs aren’t dumb money 6 Feb 2008 It s easy to think that sovereign wealth funds have more money than sense. But they look to be pretty canny investors overall. Many SWFs are looking for good prices and strategic advantage. It s all part of a shift in global economic power.
Eurozone ambles peacefully towards slowdown 6 Feb 2008 In the US, a welldeserved adjustment is met with sharp cuts in interest rates and a fast fiscal stimulus. In the eurozone, the ECB hasn t even recognised the threat of recession, despite some alarming signs of slowing growth. The central bank will respond in its own good time.
Goldman’s world view becomes more bitter 6 Feb 2008 Last year the investment bank s economists couldn t enthuse enough about how the Brics were changing the world. Now, the talk is largely of recoupling and downside risks . Behind the shift lies a reversal of direction for one truly global commodity credit.
Spam tells sad economic story 6 Feb 2008 Looking for insight into the zeitgeist? The mix of spam email provides a clue. Cheap mortgage offers jumped when the Fed cut rates, but hot stock tips have all but disappeared. And to judge from the increased share for enhancements , people are feeling mighty insecure.
Morgan Stanley airlifted from Vietnam 5 Feb 2008 A landmark joint venture announced last March, giving Morgan Stanley a step up over its rivals, collapsed within months of John Mack lauding its importance. That s probably just as well, now that Hanoi s historic rival to the north owns a tenth of the bank.
Mini-me monoline puts sector’s woes in sharp relief 5 Feb 2008 Primus says it s not a bond insurer. But it sure looks a lot like one. Like them, it just reported a big marktomarket loss on its credit insurance portfolio. Since it doesn t insure muni bonds, its problems provide unalloyed insight into monolines structured credit dilemmas.