HK exchange can’t count on China IPOs forever 4 Mar 2010 AIA's failure to list could cut Hong Kong's 2010 IPO pipeline by half. The exchange needs Chinarelated business to fill the gap but faces increasingly stiff competition from Shanghai. The answer could be edgier products, such as commodities and offshore yuan securities.
StanChart beats HSBC in Asian bank-off 4 Mar 2010 Both banks fared well in the crisis. Yet results for 2009 suggest StanChart is the better bet. HSBC has greater scale, but is constrained by its huge U.S. and UK businesses. StanChart's bigger focus on India may also pay off. It deserves a higher rating than its larger rival.
ECB should start worrying about deflation 4 Mar 2010 JeanClaude Trichet, the European Central bank president, is right that euro zone inflation is well anchored. It is half the ECB s target and risks going lower as countries make big fiscal cuts. The ECB ought to be considering further efforts to avert deflation and spur growth.
Obama’s Volcker rule not his best bet 4 Mar 2010 U.S. lawmakers aren't minded to ban proprietary trading by banks. But that isn't stopping the president from still pushing his plan to do just that. Such stubbornness is understandable. Financial reform is about the only part of his agenda that's popular right now.
Surge in U.S. takeover premiums may be deceptive 4 Mar 2010 So far this year, acquirers paid an average of around 40 pct above market prices to nab their M&A quarry a level of premium not seen since 2001. But rather than reflecting ebullience, it looks as though healthy companies are pouncing on laggards at historically low prices.
Transparency better than a ban for sovereign CDS 4 Mar 2010 European policymakers have summoned bankers to a meeting to probe sovereign creditdefault swaps. There is political appetite for action. But identifying speculators is tricky, and a ban would merely shift activity to other instruments. A better option is to improve disclosure.
Pandit deftly manages taxpayer-shareholder balance 4 Mar 2010 The Citi chief performed well in his latest congressional inquisition articulating a backtobanking basics strategy that should please his dual masters in the market and in Washington. But to fully succeed, Pandit needs to get Citi stock up and the government out.
Blizzards are powerful, but they can’t time-travel 4 Mar 2010 It s an easy crutch to reach for when economic data disappoint. The snowstorms that blew across the U.S. surely disrupted some activity in February. But they certainly didn t stop potential home buyers from signing contracts the month before.
New Greek plan deserves German blessing 4 Mar 2010 The latest deficitcutting measures show that George Papandreou gets it. The Greek government is doing the right thing. Now it's the EU's turn to act. The Germans are reticent, but their demands have mostly been met. They should drop their objections to a financial aid package.
SEC deserves to keep its money 3 Mar 2010 The U.S. securities watchdog generates some $1.5 bln in annual fees. Yet it still has to beg Congress annually for its $1 bln budget, making longerterm planning and investment impossible. Selffunding should be part of financial reform.
Ashcroft affair makes UK Conservatives look shifty 3 Mar 2010 David Cameron, who hopes to be the UK's next prime minister, is dodging questions about when he knew that his party's multimillionaire deputy chairman had apparently reneged on a deal to pay full UK taxes. Cameron is not displaying the leadership one would want from a future PM.
Why Prudential’s Asian mega-deal is a stretch 3 Mar 2010 The UK life insurer is placing a far higher valuation on AIG's Asian unit than investors give its own business in the region. That may look fair next to local rivals. But the deal brings big integration risks. With a jumbo rights issue on the way, investors are justly spooked.
Hedge fund cabal probe is politics, not substance 3 Mar 2010 If funds were to gang up, they'd be crazy to choose the euro as a target. US Justice Department interest in that possibility looks just as irrational. Sure, powerful hedgies cliquey dinner parties don't give the best impression. But they are the wrong place to look for villains.
Early Republican frontrunner really goes rogue 3 Mar 2010 Mitt Romney s rejection of antiWall Street populists isn t surprising given his private equity pedigree. But it s Tea Party time, and he s the top 2012 presidential candidate for a GOP in thrall to the movement. That makes his book defending the banks bailout a problem.
Pfizer cuts risk in Ratiopharm auction 3 Mar 2010 The U.S. pharma giant seems to have been lured into the battle for the German generics producer. Creditors will be happy, as both of the current bidders have reasons not to be too aggressive. But Pfizer may also be cautious. It apparently already quit the contest once.
Banks see silver lining in sovereign debt woes 3 Mar 2010 Western government deficits will weigh on the markets for a while. That doesn't bode well for investment banks issuing junk bonds or underwriting IPOs. However, there is plenty of business in helping countries finance their deficits, and in trading currencies and sovereign debt.
Novell buyout is long overdue 3 Mar 2010 It s a private equity dream, really. The software maker s shares have languished for 20 years. It generates healthy profit and has no debt. Moreover, most of the company s $1 bln of cash is trapped overseas. Elliott s $2 bln bid is apt to draw out other suitors that have dawdled.
China’s state budget deficit is tip of iceberg 3 Mar 2010 The reported budget deficit is a modest 3 percent of GDP. Add in frantic borrowing by local governments, though, and the total comes to something like to 15 percent. If those debts go bad, banks will initially take the losses, but Beijing could ultimately end up on the hook.
Markets may be regaining too much equilibrium 3 Mar 2010 Fears are receding that tiny Greece will bring down the huge euro zone. That justifies some renewed investor optimism. But recent corporate moves suggest excessive confidence. Economic news is generally disappointing and fiscal challenges remain large. Caution should still rule.
Three-way dogfight in UK defence 3 Mar 2010 VT Group has been given a deadline to mount its hostile bid for struggling Mouchel, another support services company. Defence group Babcock has burst in and wants to buy VT if it walks away from Mouchel. But VT should persevere; diversifying away from defence makes more sense.
Kohn exit could herald several years of easy money 2 Mar 2010 The Fed vice chairman is quitting in June, leaving three governor spots open for new Obama nominees. If he picks supporters of Bernanke s soft money policies, more hawkish FOMC members could be outnumbered until at least 2013, making tough action less likely.
Financiers could prove unlikely heroes at Man Utd 2 Mar 2010 Goldman's chief economist Jim O'Neill is leading a group of rich fans studying a buyout of the debtladen UK soccer club. If the Red Knights can galvanise fans and find the money, that could convince the unpopular Glazer family it's time to sell. For once, bankers could be stars.
Mandelson on UK bids: right target, wrong ammo 2 Mar 2010 Britain's business minister is rightly concerned that UK takeover rules seem to favour hostile bidders. But Mandelson's vague proposals are mostly either unworkable or irrelevant. One idea he should consider instead is giving more power to loyal shareholders.
Gazprom may need to budge further on pricing 2 Mar 2010 The Russian gas giant is twiddling with its longterm pricing model, to make it more sensitive to the spot market. The move goes as far as necessary to calm customers. But with rival gas sources emerging, Gazprom may yet need to be more responsive to changing market dynamics.
Wall Street’s lobbyists deserve their bonuses 2 Mar 2010 They ve successfully diluted financial reform. Breakups and harsh limits on trading activities seem unlikely. Banks may face a new consumer regulator, but its power is evanescing daily. Yet new findings on lobbyists work may force them to lobby harder for next year s payout.
Fertilizer battle rejoined, with fresh stench 2 Mar 2010 CF Industries told shareholders it was done chasing rival Terra after a long tilt that included a rejection by its own nominees to Terra s board. Terra also didn t seem to want to sell but then agreed a deal with Yara. CF investors are right to think the new $4.7 bln bid stinks.
Pound begins what may be a deep pre-election dive 2 Mar 2010 A weekend poll showing a tight election is the main immediate cause of sterling's new weakness. The odds are now stacked against the currency. An enormous deficit, political uncertainty and the risk of a return to recession and money printing could send it below its 2009 lows.
ECB, and Greece, need fairer rules on collateral 2 Mar 2010 As it stands, one big downgrade would oblige the central bank to stop taking all Greek debt as collateral at the end of the year. That ratings cliff is unfair and unnecessary. The ECB could ease the tension by adopting a sliding scale of higher haircuts for lower ratings.
BP tries to motivate with self-flagellation 2 Mar 2010 Companies don't usually say their financial performance has been subpar. But the UK oil and gas major wants to show there is a big gap that it will close. The $3 bln of cost cuts should be manageable. The greater challenge for BP is to boost its long term growth profile.
HSBC should play ball with shareholders on pay 2 Mar 2010 Some of the global bank's investors will keep opposing a salary increase for its chief executive without something in return. Pay rises may be justified, especially as global peers pay more. But the bank should calm shareholders by balancing a higher salary with lower bonuses.