CICC can gain most by playing China card 8 Feb 2010 China s top investment bank has poached talent from top foreign firms. It will bring international expertise for Chinese clients and is a small step on the rocky road that to global status. For now, it needs to focus on selling foreigners its China insight and connections.
Buyout barons’ mega-deals may yet deliver 8 Feb 2010 A couple of giant boomera buyouts wiped investors out. But others on the top 20 list have scraped through the crisis. Investors in HCA now appear well in the money on paper. Woes at Freescale and even Clear Channel are waning. But private equity bosses still have work to do.
UK mustn’t be STUPID 8 Feb 2010 The PIGS (Portugal, Italy, Greece and Spain) are old hat. The new acronym for dominoes if Greece should fall is STUPID (Spain, Turkey, UK, Portugal, Italy, Dubai). Given the way such acronyms can become contagious, the UK needs to distance itself from the others. Here's how.
John Thain checks into career rehab at CIT 8 Feb 2010 This looks a good match. After its spell in bankruptcy, the U.S. lender needs a motivated technocrat, not an expert in the art of corralling bankers with big egos. The job also plays to the former Merrill chief's strengths and offers him a deserved chance at redemption.
China gives a peep at its $2.4 trillion forex pile 5 Feb 2010 Clearer disclosure means outsiders will have a clearer view of how much hot money is flowing into the system. If it looks like the real levels of mystery inflows are smaller than expected, speculators may think twice about piling in. Transparency this isn't, but it is a start.
U.S. jobs report flatters to deceive 5 Feb 2010 The drop in the headline unemployment rate to 9.7 pct is not what it seems. Other data were revised to show an extra 1.2 mln people 8.4 mln in all have lost their jobs in this downturn. Seasonal tweaks may have been overdone, too. The recovery is still worse than jobless.
Blankfein gets downright ascetic – for Wall Street 5 Feb 2010 OK, so the Goldman CEO's $9 mln restrictedstock bonus isn't tantamount to austerity. But it's still about half of Jamie Dimon's payout and the same as James Gorman's and Blankfein outperformed both. Goldman's attention to longterm greed should remove the shortterm glare.
Argentina plans spend-and-hope central banking 5 Feb 2010 The new head of the Central Bank of Argentina says her institution should look after the country's development. That means using the nation's foreign currency reserves to support President Fernandez's big spending. It might help for a while, but then the money runs out.
IPO no quick fix for Deutsche’s T-Mobile USA 5 Feb 2010 The German operator is under pressure from shareholders to fix its US unit. But none of the solutions an IPO, a spinoff or merging it with a rival looks likely to deliver immediate value. TMobile USA has been a dog for Deutsche; and Deutsche has been a dog for Blackstone.
McDonald’s underscores Russian consumer potential 5 Feb 2010 The burger chain has achieved fat revenue growth in a market commonly denounced for corruption and bureaucracy. While McDonald's profitability in Russia is unclear, its continued investment suggests that this is a market which global consumer groups cannot afford to ignore.
Air Products needs to pump up its Airgas bid 5 Feb 2010 The $5.1 bln unsolicited advance comes at a 38 percent premium but Airgas can get more. The net present value of forecast synergies gives room to raise the bid. And hostile precedents, such as KraftCadbury, suggest holding out could be worth another $8 a share.
ICAP profit warning raises awkward questions 5 Feb 2010 The world's largest interdealer broker has shocked the market by saying new businesses will take longer than anticipated to become profitable. Michael Spencer, the CEO, last month trimmed his family's stake by 45 million pounds at nearly 50 pct above the current share price.
Deutsche banks on benign regulators and markets 4 Feb 2010 The German bank's latest results have something for everyone a raised dividend for shareholders, competitive bonuses for staff and bonus taxes for the UK. But Deutsche is also rebuilding capital. The risk is that regulators and markets make it harder keep squaring the circle.
Dresdner wins in art where it failed in i-banking 4 Feb 2010 The German bank sold a Giacometti sculpture it bought in 1980 for 65 mln stg, an art auction record. The result compares favorably with the $3 blnplus it spent on Kleinwort Benson and Wasserstein Perella both now worth pfennigs on the Dmark. Art has again trumped commerce.
European junk bond market far from full health 4 Feb 2010 Manchester Utd s recent bond issue has been thrashed in the secondary market. It s not the first highyield issue to falter lately. The market may have bounced back from last year s lows, but bankers should recognise that the highyield recovery can t be taken for granted.
Toyota backlash has whiff of protectionism 4 Feb 2010 The Japanese firm needs to fix its faulty cars fast. But reaction looks overblown including a call from the U.S. transport secretary, later rescinded, to stop driving Toyotas. It's hardly the first automaker to issue a mass recall. And the fault may lie with a U.S supplier.
A lot of little bad news turns markets to jelly 4 Feb 2010 There were no big disasters behind Thursday's sharp drop in European and U.S. shares. But the economic data is slipping, monetary conditions are no longer hugely accommodative and the euro area looks a bit wobblier. Unless the news gets better fast, more bad days are in store.
BoE should clarify bank liquidity support 4 Feb 2010 The central bank's 178 billion pound funding line for banks is due to expire next year. But it's not clear banks are ready to fund all these loans themselves. The BoE should signal support will continue, but on stiffer terms. That will encourage banks to fend for themselves.
Bond investors still relatively sweet on Kraft 4 Feb 2010 CEO Irene Rosenfeld didn't win many friends in the stock market with her pursuit of Cadbury. Yet debt investors are handing over $9.5 bln to fund the food giant's deal despite a gummed up day in the markets. Rosenfeld shouldn't take this as a validation of her strategy, however.
Cosy Cimpor deal deprives minorities of auction 4 Feb 2010 Two of the Portuguese cement group's leading shareholders have sold their holdings to Brazilian conglomerate Votorantim. The move stymies an attempted bid for all of Cimpor by Votorantim's rival, CSN. The deal suits many constituencies except Cimpor's minorities.
NY goes hard on BofA where DC got soft 4 Feb 2010 The state's attorney general is doing what the Securities and Exchange Commission wouldn't: accusing exCEO Ken Lewis of misleading investors about the Merrill deal. That may help resolve the SEC's case, which is also now tougher. But the agency still comes off looking weak.
U.S. biofuels shift needs to go much further 4 Feb 2010 The Obama administration finally wants ethanol and other biofuels to be judged on their full environmental impact. That's a welcome small step towards eliminating the distortions that result from subsidizing U.S. corn crops. But the corn lobby is still getting off too lightly.
Spanish economy still a drag on Santander 4 Feb 2010 The Spanish bank delivered strong results, with Brazil and the UK firing on all cylinders. Its balance sheet looks strong, too. But these strengths were eclipsed by market worries over Spain's economy. At 26 pct of profits, its Spanish business is too big to ignore.
Latest U.S. China-bashing is particularly risky 4 Feb 2010 President Obama is talking tough on treaty enforcement and the strength of China's currency. He also says he wants to increase trade. But with a politicized Congress itching to raise trade barriers, his protectionisttinged rhetoric is in danger of becoming reality.
At Lazard, everything old is new again 3 Feb 2010 Rejigging its comp, including a final payout to the late Bruce Wasserstein, pushed the firm into the red last quarter. Pay remains high, but with M&A improving, the loss should be a blip. And Felix Rohatyn's return should boost Ken Jacobs' chances of solidifying Lazard's future.
China’s latest lending caps are backwards step 3 Feb 2010 The government is right to try to control loan growth, but monthly quotas are too crude. In China, there's not enough good data to get the limits right, and they favour weak stateowned companies. Higher interest rates and more subtle regulation would let the market work better.
How to stop Greek dominoes 3 Feb 2010 A Greek default isn't likely, but that's also what they said about Lehman. The world should prepare a plan B, with lots of firewalls, to prevent contagion in the event that Greece doesn't get its act together.
Greek dangers for UK as QE ends 3 Feb 2010 Fiscal stimulus and quantitative easing have not yet spurred much growth. The Bank of England is likely to suspend moneyprinting on Thursday, letting the bond market speak. A barely growing, bigdeficit economy in a state of preelection paralysis sounds frighteningly Greek.
Big Brother producer pushes an accounting limit 3 Feb 2010 Endemol has angered creditors by including gains from buying back its own debt as operating profit. Endemol says it s all above board, and that the TV company would not have broken any loan covenants anyway. But even if that s all true, appearances matter. It should compromise.
Greek dangers for UK as QE ends 3 Feb 2010 Fiscal stimulus and quantitative easing have not yet spurred much growth. The Bank of England is likely to suspend moneyprinting on Thursday, letting the bond market speak. A barely growing, bigdeficit economy in a state of preelection paralysis sounds frighteningly Greek.