China’s Pimco hire may signal bolder investments 18 Dec 2009 The department managing China's foreign reserves has hired a whizz from U.S. bond fund Pimco to be its investment head. That may mark a departure from an investment approach heavily focused on U.S. Treasuries. It is the latest sign of China becoming a more adventurous investor.
Lebedev could help the Indy live up to its name 18 Dec 2009 The Russian oligarch is edging closer to buying the flagging Independent. A deal would require him to take responsibility for the newspaper's losses. But as advertising recovers, Lebedev's next step might be to start giving it away like he did with London's Evening Standard.
No winners in badly handled EADS insider probe 18 Dec 2009 A threeyear investigation by France's market watchdog has cleared 17 EADS executives of insider trading in the aerospace group's shares. While the bad publicity may have some deterrent effect, the case mainly underscores the need for serious reform of French insider dealing law.
Mack puts Blankfein on the spot 18 Dec 2009 The outgoing Morgan Stanley boss won't take a bonus, despite the firm's recovering health. While that may be safest from a PR perspective, it could be spun either way. But if Lloyd Blankfein was expecting his share of Goldman's $20 bln payout pot, his PR job just got harder.
Bernanke Senate scrape weakens Fed independence 18 Dec 2009 The chairman's close escape from a Senate panel sets him up for a record number of final no votes on his renomination. What's clear is Bernanke will be a 2010 campaign issue. That could make the Fed even more susceptible to political pressure when it comes to time to tighten.
Google dips hands into messy local search 18 Dec 2009 The search giant may splash out a halfbillion on Yelp, a review site of local business. Google's mobile search ambitions makes this a natural pairing. Yet Yelp s untidy human element may fit awkwardly with Google s clean algorithmic bent.
Greek banks avert tragedy – for now 18 Dec 2009 Investors are worried about the impact of Greece's budget crisis on the country's banks. As big holders of government bonds, Greek lenders will suffer if the debt is no longer taken as collateral by the ECB. But the situation is far from critical.
Bankers, not investors, should bear bonus tax pain 18 Dec 2009 Investment banks are pressing ahead with big bonus payments despite the UK s supertax. The question is who will bear the costs. Regulators and shareholders must insist the tax burden is shared among employees, and is not at the expense of rebuilding capital or paying dividends.
Funds at loggerheads over trapped Lehman cash 17 Dec 2009 The UK's High Court has ruled that only client money properly ringfenced by Lehman before its collapse can be returned to its owners. Goldman Sachs and GLG are among the winners. Other funds have learned the hard way that they were wrong to trust the UK's regulations.
Basel must keep its reforming resolve 17 Dec 2009 The latest update from the leading banks standardssetter suggests Basel is serious about getting tough on the sector. But key questions won't be answered for another year. Such vagueness could facilitate counterlobbying by the banks. The momentum for change must be maintained.
Boyd tries to muscle in on Station Casinos 17 Dec 2009 The casino operator has made a $2.45 bln bid to buy Station out of bankruptcy. That tops its theoretical standalone value. The Fertittas, Station's founding family, stand to lose control if they let Boyd into the bankruptcy process. But cash should speak louder than emotions.
RBS right to pursue quick sale of Sempra 17 Dec 2009 Bidders are eyeing the UK bank's stake in the commodities trader, whose disposal is being forced by Brussels. RBS has four years to get a deal done. But with metals markets rising, and political scrutiny likely to make Sempra's traders restless, it's wise to offload the unit now.
Exxon should succeed where Conoco blundered 17 Dec 2009 Markets have taken a dim view of the oil giant s bet on gas with XTO wiping $20 bln off the company s capitalization. But Exxon has a big advantage: Rival Conoco wrote the definitive manual on how to botch such a deal. And Exxon is showing signs of having learnt the lessons.
Cap-and-dividend a smarter carbon plan for US 17 Dec 2009 The climate policy of choice in Copenhagen is capandtrade but not on Capitol Hill, where legislation is stalled. A new bipartisan bill promotes a more politically palatable option that Democrats and greens could embrace to break the logjam.
Axa AP takes gamble with A$13 bln NAB bid 17 Dec 2009 Directors of the Asian wealth manager have snubbed a $12 billion minority buyout by French parent AXA, backing a higher counterbid from Australia's NAB. The new offer has an allcash option, so more certain value but less certainty of actually happening. It's a risky choice.
US Treasury should take its lumps with Citi now 17 Dec 2009 Uncle Sam seems reluctant to take a loss on its Citi investment due to TARP politics. But its continued involvement just reinforces concerns investors have over the bank s strategy, profitability, management and legal tangles. A clean break would be best for taxpayers and Citi.
Miles away from a Marvellous Board at M&B 17 Dec 2009 The prospect of a 23 percent shareholder dictating the board composition of a big UK company has come closer with financier Joe Lewis's assault on pubs group Mitchells & Butlers. Next month's AGM looks set to be an odd clash between corporate governance and shareholder activism.
BofA settles for compromise candidate as new CEO 17 Dec 2009 There's nothing ambitious about anointing Brian Moynihan to succeed Ken Lewis. He's an insider untainted by the bank's big fumbles. His ascension suggests compromise not vision, which may not be bad. But to succeed, fend off rivals and keep Merrill Lynch whole, he'll need help.
Metro Bank presents quandary for FSA 17 Dec 2009 The UK regulator must decide whether to grant a licence to what is a rarity in its domestic market: a new startup bank. Metro Bank's conservative approach and ability to promote competition sound ideal. But its chairman's past brush with U.S. regulators should raise concerns.
Retail ban for RUSAL would be risky solution 17 Dec 2009 Hong Kong's financial regulator may bar retail investors from RUSAL's forthcoming IPO. The unorthodox proposal highlights the risks the aluminium group poses to both investors and the exchange. If it goes ahead, Hong Kong must make doubly sure these risks are fully disclosed.
How much is Comcast on the hook for with NBC? 16 Dec 2009 Brian Roberts, the cable group’s boss, said buying control of GE’s media business made him “strategically complete.” But if NBC Universal keeps growing, GE’s remaining stake could be worth some $20 bln in a few years. Thankfully, however, the deal could end up paying for itself.
China well placed to turn green into gold 16 Dec 2009 China has been reluctant to give way on climate change issues. But negotiating tactics shouldn't get in the way of green initiatives. China may have more to gain than most from green trends, as a heavy commodity user and as an exporter into a potential $1 trillion market.
Some bank capital still made of sand 16 Dec 2009 Coffers are replenished but not always with rocksolid capital. Deferred tax assets won t cushion a big fall. But at Citi, for one, they make up a third of tangible common equity and still more after its TARP exit. That raises questions about whether banks are safe enough.
Carlyle and Goldman get greedy on oil patch IPO 16 Dec 2009 The prospectus for Cobalt's $851 mln offering reads like a skydiving waiver. As yet the oil driller has no proven reserves and no hopes of revenue before 2012. Its deepwater prospects look interesting but not enough to command a premium over established operators.
UK’s post-Lehman plan will make banks less global 16 Dec 2009 British proposals for winding down failing investment banks would force them to strengthen local subsidiaries. That could lead to a profound power shift in global firms. The plans aren't perfect, or cost free. But they are a good start for making the system safer.
Abu Dhabi accuses Citi of fraud 16 Dec 2009 Whatever the merits of the allegation, which Citi disputes, the Abu Dhabi Investment Authority is facing a 90 pct loss on its $7.5 bln investment in the bank. Meanwhile, Kuwait which also bailed Citi made profits. ADIA's relative misery is partly bad judgment, partly bad luck.
Nomura’s boutique buy isn’t the start of a trend 16 Dec 2009 A boutique offers dealmakers the prospect of fees without big bank bureaucracy. Business is booming for independents, but changing rapidly. Nomura's takeover of little Tricorn Partners may say more about how tough it can be to grow, than about the industry's overall health.
Obama tightens antitrust screws with Intel suit 16 Dec 2009 Intel s behavior in the chip market has seemed an obvious target for monopoly watchdogs. Yet an antiregulatory bent and the difficulty in remedying tech abuses kept them out of the fray. FTC's Intel suit suggests growing confidence among authorities and more actions to come.
BA can’t declare victory yet 16 Dec 2009 The UK airline has averted a Christmas strike. Unions have suffered a credibility blow. But the episode has damaged the BA brand and fully exposed the dire state of labour relations. Willie Walsh, the already unpopular CEO, must keep up the pressure. BA badly needs restructuring.
Bank reform grace period should be limited 16 Dec 2009 The Basel Committee is to allow banks to make a gradual shift towards compliance with new capital and liquidity rules. That is reasonable and necessary while the economic recovery is still a work in progress. But too long a delay in full adoption would be equally dangerous.