Stuart Rose comes down to earth with a bump 9 Jan 2008 The M&S boss has shocked the market with a trading statement that has wiped 20% off the UK retailer's shares. The stock is now just a few pence above what Philip Green was prepared to offer four years ago and, faced with a consumer slowdown, Rose seems to have run out of ideas.
Gold shines as inflation fears mount 9 Jan 2008 Asian growth can t explain the alltime high price of gold. Noninvestment demand for the metal has dropped since 2005. But gold is still the ultimate inflation hedge; a 33% price rise since August indicates investors are afraid central banks have lost monetary control.
Trans-Atlantic consumers get cold feet 9 Jan 2008 From US phones to luxury Danish sound systems, customers seem to be feeling the pinch. Their reluctance to spend fits well with tighter lending standards, wobbly house prices and inflation in key goods. The financial problems of 2007 are turning into an economic drag in 2008.
MBIA’s biggest challenge is credibility, not capital 9 Jan 2008 Investors savaged the bond insurer s stock after it unveiled a plan to shore up its capital. The fact that regulators are now eyeballing its disclosures didn t help. MBIA has to rebuild its credibility before it can compete effectively with cleanerthanclean Berkshire Hathaway.
Sarko’s civilisation plan flawed 9 Jan 2008 The French president wants to create a sort of French BBC at a time when the UK is debating the effectiveness of a dedicated public service broadcaster. Sarko has better ways to achieve his aims. The current plan merely stands to benefit his friends at private broadcaster TF1.
Bang & Olufsen meltdown highlights consumer malaise 9 Jan 2008 While the Danish luxury electronics company s mostly European customers should be price insensitive, they have rushed to cut back spending. The UK represents the biggest problem. Other luxury companies could experience similar turbulence.
Finance jobs intertwined with US recession risk 9 Jan 2008 The credit crunch has already spawned record financial sector job cuts of 161,000 in 2007. Still, the cutbacks look contained so far. But if fears of more widespread credit trouble this year are realized, job losses could spread. That would bode ill for the US economy.
Apple’s concession on iTunes may not be end of story 9 Jan 2008 By agreeing to set a single, lower price for iTunes downloads in Europe, Apple has staved off the threat of lawsuits and fines. But it still faces the threat of a separate and much more significant regulatory assault on the exclusive ties linking iTunes and iPods.
Calpers stakes in asset managers muddy investing waters 9 Jan 2008 The huge California pension fund is taking a 9.9% stake in Silver Lake. The apparently full price could come with other benefits, like fee breaks or coinvestment opportunities. But pensioners might wonder whether Calpers should be predisposing itself to specific money managers.
Murdoch bets on Premiere recovery 8 Jan 2008 The German payTV broadcaster is trying to regain exclusivity on the lucrative Bundesliga football broadcast rights. News Corp s purchase of 15% of Premiere is a vote of confidence. James Murdoch s first big move in his new job looks smart.
S&N fights phoney war over Russian crown jewel 8 Jan 2008 The UK brewer is rightly accusing Carlsberg of trying to buy their Russian joint venture on the cheap. But even as it talks up the value of BBH, S&N s mature markets are deteriorating. A higher offer, not independence, looks the real prize.
Gazprom’s Nigeria talks challenge, but don’t threaten Europe 8 Jan 2008 The Russian gas giant wants to help develop Nigeria s gas reserves. A state monopoly, it could do so with scant regard for its bottom line. But as its failed partnership with Algeria has shown, Gazprom doesn t always win.
Obama gets the world’s vote in New Hampshire 8 Jan 2008 The young Democrat Senator may be untested and policylight. But a win for him in today s primary contest and this November s presidential election would deliver a powerful symbol of change to the rest of the world. The value of that should not be underestimated.
Bear Stearns boss to give up the joint 8 Jan 2008 At last Jimmy Cayne is passing the CEO torch. The 73yearold s stewardship from the golf course and bridge table during the firm s darkest hour was more than an embarrassment. The board would be acting charitably to allow him to remain chairman.
Strong insider buying can tip off potential bargains 8 Jan 2008 The US market is off to a shaky start in 2008, but corporate executives have been loading up on shares. While insider buying activity can throw off false signals, it is still a useful filter to help separate potential winners in a tough environment.
Chinese companies like difficult environments 8 Jan 2008 China s MCC beat three Western companies bidding for a $3bn copper project in Afghanistan. That fits a pattern: Chinese companies deal effectively with high risk environments. Their adventurousness in search of resources makes them welcome in unpleasant countries.
Spain will vote as housing orgy ends 8 Jan 2008 Spain goes to the polls in March with its economy turning down sharply. An excess of homes has brought a construction boom to an end. Debt will weigh heavily. A prolonged slowdown or recession looks inevitable. Yet it s uncertain whether the prime minister, Zapatero, will pay.
Turkish supermarket auction may flunk market test 8 Jan 2008 Potential bidders for Migros Turk have been put off by the $4bn asking price. Global chains can always opt instead to build out their own stores; meanwhile, private equity may struggle to raise the finance. The sellers may have to lower their sights.
When will companies start going bust? 8 Jan 2008 Quite soon, according to Moody s. Globally, the default rate for junkrated companies ended 2007 at a 26year low below 1%. The rating firm thinks that could rocket to nearly 5% by the end of this year. Moreover, it won t take a US recession to make that happen.
Microsoft’s latest deal fuelled by fear 8 Jan 2008 Microsoft s M&A record is one of increasing desperation. On Tuesday it paid $1.2bn for moneylosing Fast Search & Transfer. The 42% premium, coming soon after an investment that valued Facebook at $15bn, reflects Microsoft s fear that its star is being outshined by Google.
BarCap whittles down CEO succession race 8 Jan 2008 The subprime mortgage crisis seems to have scuppered Grant Kvalheim s hopes of running the UK investment bank. Jerry del Missier now seems to be the only candidate to take over when boss Bob Diamond leaves. But in this environment, that s hardly set in stone.
Dong’s E2bn IPO could ring investors’ bells 8 Jan 2008 The Danish government is planning to float 28% of the country s dominant utility. Equity markets are tough, but Dong has lots to offer: a handsoff government and good growth prospects from its North Sea gas and a more open European energy market. It should be an easy sell.
US doesn’t need fiscal boost 8 Jan 2008 Pressure is growing for a tax cut or benefits increase to keep spending up. It s hard to see how the small boost in question would do much good. Quite the contrary. Lax fiscal policy would mean more imports and higher inflation the last things the US needs.
Pressure mounts for Close Brothers 7 Jan 2008 The UK financial group rejected a £9.50 bid, a 25% premium on its vulnerable shares. If it can t drum up a higher offer, management will need to explain how it can create the same value. And it needs to act fast, before it loses more staff.
Rock hedge funds run rings around UK government 7 Jan 2008 SRM Global and RAB Capital have upped their stakes in Northern Rock in an attempt to win a veto over any rescue at next week's EGM. That s cheeky, given the shares should have been wiped out long ago. But given the weakness of the UK hand, their bet may yet pay off.
Starbucks can weather McDonald’s coffee assault 7 Jan 2008 America's biggest fast food chain's decision to serve McFrappuccinos is hardly welcome news for Starbucks. But investors are right to shrug. If Starbucks raises its game in food, it should be able to fight off the challenge. And it retains an edge in cachet.
Darling should leave the UK energy regulator alone 7 Jan 2008 The UK Chancellor s demand for a meeting with Ofgem to explain recent retail price hikes looks like an illjudged political stunt. Putting pressure on an independent regulator risks damaging investor confidence and could hurt consumers in the longterm.
CNET should sell out to Henry Blodget 7 Jan 2008 The Wall Street pariah recently launched a whimsical offer for the $1.3bn internet publisher on his blog. Now four investors have followed suit by amassing a stake with intent to flip the board. As jokey as it sounds, Blodget s onto something: CNET needs a Web 2.0 makeover.
Economics drives Georgian politics 7 Jan 2008 The Caucasus nation has had a strong economy since 2004, so Saakashvili won reelection. As in Ukraine, growth has proved a stronger force than Soviet nostalgia. However, there are signs of the economy overheating, which could reverse both economic and political progress.
Should risk managers take the fall for subprime? 7 Jan 2008 CIBC thinks so it showed its risk honcho the door. But it s easy to make risk managers the scapegoats when trades and strategies go awry. It takes a firmwide commitment to managing risk rather than a handful of guys waving red flags to keep a bank out of trouble.