FSA’s short-selling D-day looks half-cooked 19 Jun 2008 The D stands for duh . The uncertainty over new rules on rightsissue shorting reflects badly on the UK regulator, which looks to be making policy on the hoof. That s a shame, since the principles behind it look sound.
Liquidity risk clampdown makes sense 19 Jun 2008 Financial firms should take on board the Basel Committee s generally smart recommendations for avoiding liquidity crises. They may not want to. The belief that nothing could impinge on their access to funds drove a lot of their boomtime profits.
Mexico needs a Lula 19 Jun 2008 Mexico's price controls and stalled Pemex privatisation contrast with Brazil's monetarism and successful offshore oil exploration joint ventures. The countries have similar problems, but Brazil's leftist Lula is much closer to solving them than Mexico's centreright Calderon.
Bear fund managers: criminal or optimistic? 19 Jun 2008 Stretch for a positive spin, and the indictment against two Bear Stearns fund managers could just about describe a debate rather than a deception. Another project launched by the two men months before their funds tanked is open to similarly different interpretations.
Tiscali auction looks in trouble 19 Jun 2008 Hot favourite Vodafone is understood to have walked away from the overvalued Italian internet group. The withdrawal of the UKbased mobile operator leaves only a handful of tentative bidders. Amid signs of a broadband slowdown, Tiscali should be lowering its price expectations.
Quitting while ahead becomes Wall Street fad 19 Jun 2008 Some Masters of the Universe are bowing out at the top of their game including Goldman s head of asset management and Citi s M&A chief this week. Given projected declines in earnings, lowerpaying alternatives like academia are starting to look good.
Pfizer – Ranbaxy Lipitor deal deserves scrutiny 19 Jun 2008 The drug giant inked an agreement that postpones generic competition to its $12bn cholesterol drug from India s Ranbaxy. The quid pro quo: Ranbaxy can sell another of Pfizer s drugs. This may not be as obviously anticompetitive as a cash payment, but it s close.
HBOS avoids the curse of B&B 19 Jun 2008 A disastrous business review almost sank UK lender Bradford & Bingley s rights issue. HBOS, the market leader which is trying to raise £4bn, says business is fine. Margins may even improve. The bank should get the money, but a weak UK economy is still a big worry.
Prisa caught out by expensive pay-TV buy 19 Jun 2008 The Spanish media group stretched its balance sheet to the limit to buy control of Sogecable. Lenders have given it a month of muchneeded breathing space, but there may be no painfree ways to cut its E5bn debt mountain down to a manageable size.
UK ventures into untimely regulatory rejig 19 Jun 2008 With inflation rising and growth slowing, the highest priority for UK authorities should be a strong united front against wage increases. Instead, infighting among the three regulatory bodies seems to be at the top of the agenda. It s not even clear if one will end up on top.
LinkedIn gets social networking’s first fair valuation 18 Jun 2008 The Facebook for professionals raised cash from Bain and others at a valuation of $1bn. This looks almost dowdy by social networking s lofty expectations. LinkedIn has better growth and wealthier users than its bigger brethren. The Web 2.0 brigade is maturing.
Spielberg deal could stretch Anil Ambani thin 18 Jun 2008 Providing the subcontinent with power, financial services and telecoms hasn t satisfied India s $40bn man, who s adding Africa to the mix. Now, he may bankroll Steven Spielberg s movies. He looks spread thin.
Babcock & Brown still needs to prove itself 18 Jun 2008 A rushed deal with its banks has allowed the Australian investment company to avoid being bushwhacked by an obscure clause in its loan agreements. That s been renegotiated, at a price. Now B&B has to show investors that its model works in bad times as well as good.
Mack takes two steps back 18 Jun 2008 A good start to the year helped rehabilitate the Morgan Stanley boss s reputation after last year s trading loss. But a series of smaller riskmanagement mishaps made a tough second quarter even worse. Strip out oneoff gains, and Mack s firm only just broke even.
The G8 should expand to give China a seat 18 Jun 2008 Paulson's economic strategic dialogue with China is helpful but doesn't go far enough. On energy, commodities, global warming and monetary policy, China is so important it should be fully integrated into the world's economic decisionmaking. That means a seat at an expanded G9.
Private equity interest may signal Informa break-up 18 Jun 2008 The UK media group should be happy that nilpremium merger talks with the advertisingdriven and cyclical UBM are over. Informa deserves a premium bid. It s now talking with private equity groups. They may pounce if they can carve up Informa s distinct businesses between them.
Oligarchs ready for showdown at Norilsk Nickel 18 Jun 2008 Two Russian billionaires Oleg Deripaska and Vladimir Potanin are fighting for control of the world s top nickel producer. Norilsk s standalone days seem to be over, but the two have different plans. It s an important argument, but minority shareholders are excluded.
Iceland begins its hard landing 18 Jun 2008 A shrinking economy is no fun, but that s the payback for years of financial excess. Still, it could be worse. Tough government action has probably forestalled default or bank failure. Iceland can join the eurozone to keep future bubbles away. For the US and UK, it isn t as easy.
UK housebuilders face bank straitjacket 18 Jun 2008 Shares in Taylor Wimpey, Barratt and their peers have dived again. If UK house prices fall 20%, some big names could break their covenants. Banks would then have to nurse them back to health. But the medicine tight controls on their spending and higher rates could be painful.
Exclusive: Will Joe Sixpack pummel Inbev’s Anheuser bid? 18 Jun 2008 Political temperatures are rising over the BrazilianBelgian brewer s taste for Bud. Inbev has hired heavyweight Washington lobbyists, including former Senate majority leader Trent Lott, in anticipation of a fight. But a battle much beyond St Louis could damage US markets.
Spanish politicians create absurd electricity market 17 Jun 2008 Spanish power producers are forced to sell electricity at low regulated prices that don t cover their costs. The gap will reach a cumulative E15bn by the end of this year. Madrid ought to raise prices sharply, but doesn t have the guts to do it.
Will rivals ever catch up with Goldman? 17 Jun 2008 The Wall Street firm has a simple model: run a broad set of businesses, and avoid losses as much as possible. Yet peers have a hard time following suit. After yet another decent quarter, Goldman s allure looks even more appealing both to shareholders and clients.
Don’t blame UK inflation on alien commodity prices 17 Jun 2008 Mervyn King, the governor of the Bank of England, is wrong: too loose money, not alien commodity prices, helped create UK inflation. But King may be right to imply that patience is now the best course. The economy s weakness may prove to be its antiinflationary defence.
Goldman tries to cut SIV knot with common sense 17 Jun 2008 The bank has hatched a plan to rescue Cheyne Finance, the insolvent $7bn structured vehicle. It will sell some assets to price the rest. Junior investors might not like the scheme, as they will get wiped out. But the plan s simplicity could set an attractive precedent.
Sovereign funds risk second punt on Barclays 17 Jun 2008 Temasek and China Development are sitting on big losses at the UK bank. That's not stopping them investing more or new SWFs thinking of joining the party. Their support for the £4bn share issue suggests either Barclays is offering a great deal or they are calling the bottom.
In banking cuts, VPs may be most vulnerable 17 Jun 2008 Goldman is cutting staff, along with other investment banks. VPs are prime candidates for layoffs. They don t bring in the revenue and they aren t the workerbees. Plus, banks need to make room to promote junior level staff they don t plan on paying well.
When does a premium become a discount? 17 Jun 2008 When it's Barclays' £4bn share offer. Initial reports had it that the shares would be sold at a premium to the market price. Now maybe they'll be sold at a discount. Here are several possible explanations for the confusion.
How Barclays can square £4bn fundraising circle 17 Jun 2008 The UK bank must offer new stock to existing shareholders first, which makes it tough to lure a new sugar daddy. But add a discounted private placing, and an underwriting fee, and Barclays could assure a newcomer a 5% stake and an instant profit of maybe £100m.
Korea’s currency intervention would flop in the US 17 Jun 2008 The South Korean government's intervention to protect the won may strengthen the currency and hold down inflation. Both budget and payments are in surplus, while inflation is almost entirely imported. But a similar move wouldn't work for the US.
Apollo’s Spac deal is unlikely to reward everyone 17 Jun 2008 The buyout firm is selling Hughes Telematics to a blank check company in return for a stake. Hughes has tiny sales and aggressive growth assumptions. The deal will probably be approved. But it shows why investors who come into Spacs after they buy something should be careful.