Year: 2009

Dubai: what happens on Monday?

11 Dec 2009

That's when the $3.5 bln bond of Nakheel, the troubled property developer, matures. A full, timely repayment looks unlikely and creditors haven't yet agreed a standstill. But Nakheel will still have a 14day grace period. If nothing is done, things could then unravel painfully.

Warrant auctions imply Goldman misjudged market

11 Dec 2009

The vaunted Wall Street firm paid the U.S. Treasury s $1.1 bln asking price for its TARP warrants in July. Recent auctions of JPMorgan and Capital One warrants suggest the market price was much lower. Goldman had reasons not to balk, but still looks to have overpaid.

Copenhagen creates tension instead of harmony

11 Dec 2009

The global threat of climate change was supposed to shock nations into a common effort. The opposite seems to be happening. China wants rich nations to fund a cleanup. Other poor countries want China to help. And U.S. threats to tax carbonheavy imports could spark trade war.

Investors rightly insist on Gartmore for less

11 Dec 2009

The fund manager s IPO will price at 220p, below the targeted range. Buyers didn t quite believe talk that Gartmore could double earnings next year. And with financial stocks struggling a little and a disappointment from peer Man Group, a lower price was in order.

Russian shops row tests Medvedev’s business pledge

11 Dec 2009

Controversy surrounds planned antimarket legislation on Russia's retail sector, including foodprice controls and curbs on acquisitions. With premier Putin backing the populist law, President Medvedev's own commitment to lightening the load on business is being tested.

Investors should seek out scarce hedge fund women

11 Dec 2009

In terms of machismo, running a hedge fund is the closest the financial world gets to flying a fighter jet. So it may come as a blow to testosteroneladen traders that female hedgies seem to make better returns. Unfortunately for investors, it is far from easy to find them.

What’s the cost of bank bailouts?

11 Dec 2009

In the UK, official estimates go from 8 billion to 846 billion pounds. It all depends on how official support is measured. It's hard to put a number on financial rescue programmes which simultaneously protect, benefit and endanger taxpayers. They are both expensive and priceless.

Spain should take head out of the sand

11 Dec 2009

A rating agency's warning about a possible downgrade has fallen on deaf ears. It seems the Spanish government isn't prepared to take tough action to control its ballooning deficit. It isn't too late to act. Here is a fivepoint plan.

FSA too weak on hybrid capital

11 Dec 2009

The UK regulator could allow banks to include existing hybrid securities as capital for a decade, and potentially longer. That would slow down its policy goal of improving the quality of bank reserves. The FSA has been bold on liquidity rules. It should be firmer on capital.

At least Madoff has mobilized the money men

10 Dec 2009

A year after his unmasking, the jailed $65 bln Ponzi master is changing his industry. Hedge fund investors have led the charge for better controls. By contrast, many banks are back in their precrisis grooves. If only bank shareholders would add their clout to that of regulators.

Goldman finally strikes right tone with bonuses

10 Dec 2009

The firm's paying its top 30 executives entirely in stock with fiveyear lockups and enhanced clawback features. The structure, reminiscent of its old partnership, sets the bar for the rest of Wall Street. But it may not be enough to prevent a public backlash on payday.

Apollo won’t be relying on Reliance

10 Dec 2009

The Indian group wants Lyondell, the bust U.S. chemical outfit. But senior creditors including Apollo are controlling the bankruptcy and could take a loss at the $12 bln price Reliance has proposed. Without a higher offer, Apollo stands to get more from an independent Lyondell.

Beware the global warming consensus

10 Dec 2009

Climategate hasn t changed many minds about the need to move fast and hard against manmade global warming. But a little caution is in order. Skeptics should get more grant money, and antiwarming policies should focus on goals that would also be worthwhile in a cooling world.

Operators start to choke on iPhone growth

10 Dec 2009

Mobile data use is rocketing AT&T's U.S. traffic has increased more than 50fold over the past three years. Data revenues aren't growing fast enough to generate an attractive return on the needed capital expenditure. Something has to give.

China Shipbuilding IPO mania well deserved

10 Dec 2009

It is easy to dismiss the shipping equipment maker's $2.2 billion exuberant listing as Shanghai IPO mania, but the premium rating makes sense. China has overtaken Korea to hold the world's largest ship order book and robust naval ambitions add extra buoyancy.

Bonus tax shows France and UK moving closer

10 Dec 2009

France will levy the same oneoff bonus tax as the UK. A jointly penned newspaper column by Nicolas Sarkozy and Gordon Brown shows narrowing differences on financial regulation. If the banking industry doesn't change its mores, more pain may be on the way.

UK shows how to destroy world-class industry

10 Dec 2009

Pensions were once a national specialty for the UK. Two rule changes within a single tax year add up to a massive blow. Such shortterm fiddling destroys confidence in longterm savings. The Chancellor's latest moves betray the government's intellectual bankruptcy on the subject.

EU won’t let anyone default without a struggle

10 Dec 2009

A sovereign default is possible in the euro zone, but the authorities would fight to prevent it since one member's failure would raise debt costs for many. The EU and IMF would demand policy changes. But ultimately a country's willingness to make sacrifices will be decisive.

US bankers needn’t fear British-like bonus bash

10 Dec 2009

It s possible U.S. authorities could ape their UK counterparts in clipping payouts. Wall Street is unpopular and Washington needs money. But Congress struggle to impose higher taxes on private equity and hedge fund profits doesn t bode well for a U.S. version of the supertax.

AOL’s got independence – and issues

10 Dec 2009

The AOLTime Warner merger was the crowning deal of the new millennium. Its spinoff today is an appropriate bookend to a lost decade in the stock market. There may be value left in the company, but it won't be easy for CEO Tim Armstrong to deliver.

Britain’s bonus tax may snare unintended victims

10 Dec 2009

Britain's draft law of the supertax on bankers' bonuses has been drawn very wide. This will deter clever bankers from exploiting loopholes. But asset managers, hedge funds and even foreign bank chiefs could also be hit. The Treasury should act fast to clear up the confusion.

UK bonus tax: One-off or two-off?

10 Dec 2009

The UK government has made a mistake in suggesting its bankers' bonus tax might be extended. One way of mitigating the damage would be to make clear that any repeat would cover total compensation, not just bonuses. Otherwise, banks will just jack up base salaries even more.

Spreading the burden could ease City bonus hit

10 Dec 2009

One of the mysteries of the UK's 50 percent bonus tax is why it is raising so little. Estimated proceeds of 550 million pounds suggest top bankers may suffer a 30 percent hit. But by spreading the burden across the global workforce, banks may limit the impact.

Brazil’s economy loses some of its sparkle

10 Dec 2009

The country s thirdquarter GDP growth was lower than expected and performance is lagging 2008. The slowdown may result from the currency s strength after last year s collapse. Still, stock market euphoria looks overdone and Brazil s growth is not soaring to Chinese levels.

Ex-Lehman bosses’ boutique becomes credible

10 Dec 2009

JRJ, a firm set up by exLehman bigwigs Jeremy Isaacs and Roger Nagioff, is buying a small commodities broker. The deal provides a toehold in the fragmented derivatives market. Barely a year after Lehman's collapse, it could mark a rare comeback for some of the bank's top brass.

China’s automakers may run out of gas

9 Dec 2009

China's passenger cars sales almost doubled in November, thanks to major government incentives but these will be hard to replicate next year. Investors in automakers such as Geely, whose shares have increased more than sevenfold in a year, may have got ahead of themselves.

VW/Suzuki tie-up is a smart move by both sides

9 Dec 2009

Volkswagen is paying $2.5 bln for 19.9 percent of Suzuki. The German carmaker gets strategic access to its Japanese peer's smallcar expertise and Asian markets, while Suzuki enjoys a needed cash boost. VW can't afford a full takeover just now. But this is a wise interim move.

Russia should waive its carbon credits

9 Dec 2009

Industrial decline has given Russia one asset, a vast supply of tradable carbon offsets. But a sudden sale would flood an already fragile market. An offer to write off some of the credits would help make Copenhagen a success. Russia would gain politically and economically.

Greece stirs to Fitch’s wake-up call

9 Dec 2009

The Greek government is belatedly acknowledging the seriousness of the country s plight. That s welcome after its initially blasé response to this week s sovereign downgrade. But Greece is running out of time to deliver a credible plan for tackling its structural problems.

Rouble carry trade stumbles

9 Dec 2009

The Russian currency has suffered a minicorrection wiping out several weeks of gains. A lower oil price and renewed investor concern about emerging markets are largely to blame. But Russia's longrunning attempts to limit the rouble carry trade may also be bearing fruit.