Malaysian economic risk is population not Islamism 10 Mar 2008 Malaysia's election results show that Islamism is not a big threat the successful opposition coalition includes both Islamists and urban secularists. Population growth is a greater danger; at 1.8% it could impose an intolerable economic burden should commodity prices decline.
M&S rejig makes best of a bad job 10 Mar 2008 Stuart Rose is to move up from chief executive to executive chairman. Shareholders may think this corporate governance nono preferable to losing the architect of M&S s revival. But the absence of a credible successor pokes a hole in Rose s reputation.
Credit firemen turn out to be arsonists 10 Mar 2008 Credit default swaps were supposed to put risk into the safest hands. But many CDS sellers were highly leveraged. They re now being forced to close positions, and spreads are widening fast. Credit spreads may now be too wide, but investors lack the cash needed to stop the spiral.
Spitzer’s peccadilloes brighten Wall Street gloom 10 Mar 2008 But bankers shouldn t take comfort in their former scourge s downfall. Sure, he s done some strongarming over monolines recently. But even if revelations about his alleged use of a prostitute leads to his resignation, that s not going to help Wall Street.
Is Washington State the next Napa Valley? 10 Mar 2008 Amazon.com shareholders should hope so. The Seattlebased internet giant is set to enter the online wine business. A number of websites, including one backed by Amazon, have struggled in the US before. But the company is wellplaced to capture the industry s grand cru riches.
Should SWFs get a US tax break? 10 Mar 2008 A US academic says it s unfair that foreign stateowned entities don t pay taxes on portfolio investments. He s right, in theory. Yet the US is not in a great position to close this loophole right now, not when SWFs could soon be asked for more money to prop up Wall Street.
The decline of private equity needn’t lower prices 10 Mar 2008 Financial buyers can no longer afford to outbid industrial rivals in corporate auctions. Some sellers feared that change would lower prices, especially in smaller deals. But BAA´s World Duty Free shops went for a punchy 15 times ebitda without any private equity participation.
Blackstone unveils the new reality 10 Mar 2008 The private equity firm s fourth quarter earnings underline the miserable time private equity firms are having. Its stock is down more than 50% since it went public last June. But the outlook has deteriorated dramatically. Shareholders need to reset their expectations.
Bernabe pulls punchbowl from Telecom Italia shareholders 7 Mar 2008 The Italian telecoms group s new boss has drawn a thick line under the Tronchetti era. Hemmed in by debt and tepid growth, he has cut TI s generous dividend by 40%. That has sent the shares tumbling not that TI s biggest investor, Spain s Telefonica, may mind as much as others.
Hedge fund consolidation steps up a gear 7 Mar 2008 Londonbased Castlegrove is being acquired by Millennium Group, while GLG is opportunistically eyeing 20 hedge funds, including Tisbury. Further consolidation is inevitable fuelled not so much by distress as smaller firms throwing in the towel.
Spain starting to pay cost of Dutch disease 7 Mar 2008 The Spanish windfall was not gas or oil, but money the single European currency. It fuelled a construction boom, which is all but over. The shift to a more balanced economy will inevitably be painful. The incoming government elected on March 9 must be nimble to avoid the worst.
Should Carlyle bail out its listed debt fund? 7 Mar 2008 The buyout firm backed an Amsterdamlisted fund that could go bellyup. Injecting capital might keep the fund afloat and minimise reputational damage. And there s a chance Carlyle would make money. But there would be risks. Carlyle could look even worse if a bailout failed.
Asset classes multiply, returns don’t 7 Mar 2008 Everything from stocks in failing countries to carbon offsets to rare violins is being peddled as a new asset class . Theoretically, adding uncorrelated assets to a portfolio can increase returns while lowering volatility. It s easier to sell investment nirvana than reach it.
Toy safety bill could be a boon for Mattel 7 Mar 2008 Its shares were clobbered by massive recalls of its leadtainted toys last summer. New legislation promises further crackdowns on dangerous products. But Barbie and Elmo have cleaned up their act. New scrutiny could actually benefit Mattel.
Banks have no excuses for their losses 7 Mar 2008 That s the conclusion to be drawn from a new report by regulators on risk management practices at 11 major banks. They might like to blame unanticipated factors that botched up their models. But it was sophomoric blunders that separated the winners from the losers.
War would hurt Colombia more than Venezuela 6 Mar 2008 Hugo Chavez's belligerent threats towards Colombia may be smart. War would affect Venezuela's economy only if Colombia attacked its oil installations, while Chavez could use it to entrench himself. Colombia, a modern democracy with a balanced economy, is much more vulnerable.
Deutsche Post must end politically-fuelled expansion 6 Mar 2008 The German mail giant suffered a 61% Q4 profit drop after a E594m writedown in its US DHL Express unit. The new CEO needs to find an American partner and dispose of the German bank unit. Even then, Deutsche Post remains a case study in why Europe needs better deregulation.
Paulson and Bernanke should hold their tongues 6 Mar 2008 The supposed stewards of US banks have sown confusion by competing to float outlandish mortgage bailout schemes. Mr Market is ready to believe anything even the unlikely idea that the government would explicitly guarantee Fannie Mae s debt. They re making a bad situation worse.
Grabbing masters of the universe coattails doesn’t work 6 Mar 2008 Investors who bought into Blackstone, Carlyle, OchZiff or KKR shares hoping for some altasset pixie dust have been sorely disappointed. They shouldn t be shocked. The fund managers are masters of market timing. Why wouldn t they have sold out at the top?
Buffett shows that finance can still pay 6 Mar 2008 Microsoft s Bill Gates has been displaced as the world s richest man by the sage of Omaha. He s done brilliantly in a disastrous year for the finance industry. But Buffett is the exception. The best way to make great big money these days is to build a fortune in a poor country.
Will Reed’s £1.1bn mags sale ease LBO famine? 6 Mar 2008 At least six buyout groups may be suitors for the publisher s unglamorous business titles among the first private equityled auctions since the credit crunch. But even this might be a stretch for financial sponsors in the current market.
British Airways in not-so-shock profit warning 6 Mar 2008 The UK carrier has abandoned its longheld 10% operating margin target, thanks to a rise in fuel costs and slowing demand. The mystery is why the airline is still so upbeat on business class traffic. The bad news is probably far from over.
Carlyle debt fund too slow to cut borrowing 6 Mar 2008 The Amsterdamlisted mortgage fund with ominous ticker symbol CCC leveraged itself 32to1 to buy AAArated US mortgage bonds. Now it is struggling to meet margin calls. Prime brokers are increasingly riskaverse; Carlyle s fund didn t deleverage quickly enough.
Is Sacyr desperate for cash? 5 Mar 2008 Why else would the Spanish construction company brave choppy markets to IPO its motorway business? Sacyr may have E20bn of debt, but it s not as bad as it seems, thanks to accommodating banks. Still, the Itinere IPO would certainly help.
New Gazprom row is Ukraine’s doing 5 Mar 2008 A longbrewing dispute over gas prices has led to a new threat by Gazprom, the Russian gas giant, to cut supplies to Ukraine. But infighting within the Kiev government, not Gazprom bullying, is at the heart of this latest dispute. Ukraine should clean up its act.
ECB should look for US help with the dollar 5 Mar 2008 The strong euro now has Europe worried. The ECB s Trichet is likely to try to talk the single currency down on Thursday. What he would like is US help. A Fed purchase of dollars would take pressure off the euro. It would also counter some inflationary problems in the US.
Backdating casualty offers big upside 5 Mar 2008 Comverse Technology trades on the US pink sheets. Its founder absconded to Namibia. It hasn t released financial statements in two years. Lawsuits are flying. And the stock may be a great investment.
Global Radio shows tech blindness with GCap bid 5 Mar 2008 The acquisitive Global Radio is close to buying UK s largest commercial radio broadcaster, which is reeling from a bad industry and a foolish bet on digital radio. At £371m, Global is paying up. It might have done better to look to the technological future internet radio.
Hillary can win by playing nice 5 Mar 2008 Not necessarily the presidency even after Ohio and Texas she is behind in delegates. But a graceful defeat would leave her poised to be a Democratic powerhouse for decades. An ugly primary victory could split the party, lose the White House and hobble her career in the Senate.
Ambac’s bailout springs a leak 5 Mar 2008 It isn t being rescued by its bank clients, as shareholders hoped. News of its plan to raise $1.5bn in equity and converts sent its stock plummeting. Ambac admits the new capital won t eliminate the risk of a rating downgrade. Banks were wise not to increase their exposure.