Prudential should remain focused on Asian growth 2 Jun 2010 The collapse of the AIA bid will make some investors ask if the UK insurer should be broken up. But Pru's existing strategy using its cash cows to fund organic Asian growth is sound. If it needs to be turbocharged, then giving the Asian unit a separate listing could help.
BP shaping up as Lehman Brothers in the oil patch 2 Jun 2010 The most toxic ingredients that led to that Wall Street fiasco can be found in BP s deepwater Gulf debacle: flawed risk management, systemic hazard and regulatory failure. As with finance, the policy response will almost certainly lead to energy s biggest getting even bigger.
Russia’s tech ambitions require more than concrete 2 Jun 2010 How to keep the next Sergei Brin in Russia? President Medvedev hopes a new Silicon Valleystyle science park will ensure that native tech entrepreneurs like the Google founder stay put. But it would be better to fix Russia's murky business and legal culture.
Buffett can’t shoot straight on Moody’s 2 Jun 2010 The Oracle of Omaha didn t bring his sayitasitis style to a hearing on the credit rating agencies. As a major Moody s shareholder, he leaned on the tired and weak immaculate crisis defense. It didn t add much to the debate, or Buffett s legacy.
Free ride ending for U.S. wireless bandwidth hogs 2 Jun 2010 Though it may hit sales at first, AT&T's move to tiered pricing for mobile data users could improve longrun profitability and end nightmarish network problems. Customers look the winners at the start, but conditioning them to pay for usage would be a victory for carriers.
AIA mess showed prudence flying out of the window 2 Jun 2010 An inexperienced CEO overpaying for a business that is too big for his company to swallow is a bad start. If the deal won't even do what he claims, the City's analysts should revolt. In Prudential's case, hardly anyone did. Could $650 million of fees have something to do with it?
PM resignation brings Japan’s fiscal crisis closer 2 Jun 2010 For the fifth time in four years, a new leader will take charge of the world's second largest economy. Or fail to. The country is number one in fiscal deficits and debt loads, yet budgetcutters always lose out to Keynesians. Disaster may be only one more weak leader away.
Glencore will find it hard to avoid an IPO 2 Jun 2010 The commodities trader is keen on a merger with Xstrata, the listed miner in which it has a 35 pct stake, so its partners can cash out and it can continue to fund growth. But as long as Glencore is privately owned, a deal will be a tough sell to Xstrata's other shareholders.
Telefonica puts Portugal Telecom on the spot 2 Jun 2010 The Spanish group has long wanted to buy out its Brazilian mobile partner. The latest 6.5 bln euro offer, with sweeteners, wasn't high enough to get an endorsement from the PT board. But resistance may be weakening. The board has agreed to let shareholders vote on the new offer.
Pru bankers lose out on fees and reputation 2 Jun 2010 Advisors expected 850 mln pounds from the UK insurer's bid for AIA. They will earn just a fraction of that, although Pru is still out 450 mln pounds. The pros should be ashamed of giving bad advice. But London bankers' loss may turn into Asians' gain, if AIA floats in Hong Kong.
More than the dividend now at stake for BP 1 Jun 2010 The Gulf of Mexico catastrophe is not yet lifethreatening for the oil major, but could be. The latest attempt to cap the well looks desperate, and hurricanes might delay relief welldrilling. The resulting pollution could destroy the coastline and the company's independence.
U.S. cable shares may offer shelter from storm 1 Jun 2010 A new threat of broadband regulation hit valuations, which were already pressured by competitive worries. But the sticky, and domestic, revenue of Comcast and Time Warner Cable provide attractions for investors, even in a sluggish economic recovery.
Spain’s labour reform could be missed opportunity 1 Jun 2010 The weakened socialist government is uncomfortable with radical reform, and so are the unions. So the changes will probably not make much difference in the country's dysfunctional job market. But if this crisis doesn't spark major change, it's hard to imagine what would.
China shouldn’t rush into its next megabank IPO 1 Jun 2010 Agricultural Bank, the weakest of China's big lenders, is pressing ahead with a $30 billion offering, despite a tough market. Waiting might be better. AgBank is likely to get a lower valuation than it wants. It might also soak up capital that others need more.
Legal eagles set for more transatlantic mergers 1 Jun 2010 Mergers between U.S. and UK law firms can never be easy just think of all the necessary clauses. But the pressing need to cut costs and demonstrate a global presence is pushing midsized firms to find ways to overcome the obstacle. Bigger firms are likely to follow suit.
Pru’s clear out should start with chairman 1 Jun 2010 The whole board is culpable for the fiasco surrounding the UK insurer's failed $35.5 bln bid for AIA. But it would be reckless to remove CEO Tidjane Thiam at this time. A needed boardroom overhaul should start with chairman Harvey McGrath.
Canada should lead interest rate vanguard for G7 1 Jun 2010 The central bank s 0.25 pct rate rise, the first in the G7, owed much to GDP growth, rising inflation and a declining savings rate. Other countries may be growing more slowly but their fiscal positions make ultralow rates riskier. Canada s may be an example worth following.
Lesson to Pru: AIG isn’t a normal corporation 1 Jun 2010 The wrangling over AIA clarifies what the UK insurer s board should ve known all along: AIG is beholden to the U.S. taxpayer. While accepting a lower price might have been rational, it would ve further opened AIG to charges of shortchanging its owners this time to help Pru.
Pru holders should be grateful to stubborn AIG 1 Jun 2010 The UK insurer's $36 bln bid for AIA looks dead in the water after its U.S. owner refused to lower the price. But Pru's latest offer still looked generous, considering the megadeal's regulatory issues and execution risk. After this fiasco, a management overhaul is inevitable.
Wall Street making bad habit of weekend wimp-outs 1 Jun 2010 Morgan Stanley disclosed a pay rise for Chairman John Mack on the eve of this past holiday weekend, and buried a big real estate loss at Easter. Goldman unveiled Blankfein s bonus on a Friday night. Such timing may keep to the letter of transparency rules, but hardly the spirit.
Hoarding Toys may turn out fun for buyout firms 1 Jun 2010 KKR and others are ready to float Toys R Us. It was valued at about $7 bln when it went private in 2005. A standard retail valuation would provide a solid return. But if the current owners can sell a growth story and fetch a premium, their investment would more than double.
France is a safe investment. Or is it? 1 Jun 2010 The French budget minister put his foot in his mouth by voicing his concern that the country's ratings situation was tense. France still is the euro zone's safest investment after Germany. But it won't retain its status if it keeps doing nothing about its budget deficits.