Chile may provide alternative to labor-led growth 20 Jul 2010 Claims by the finance minister that the country could grow by 6 pct next year and stay there seem realistic. If so, Chile would provide a model for commodityled growth and a potentially better bet than one predicated largely on evercheaper labor costs.
China takes energy lead while still well behind 20 Jul 2010 The Middle Kingdom's 1.3 billion people last year consumed more energy than 310 million U.S. residents. In energy, as in finance and manufacturing, this poor country's decisions will guide the rich world. Beijing doesn't look ready to take on the global responsibilities.
Redstone discount at Viacom/CBS should get deeper 20 Jul 2010 The eccentric chairman of both U.S. media groups appeared even more Monty Burnslike by offering inducements for a reporter s source. Tellingly, he claimed to run the companies, revealing his take on governance. His behavior points to a lot of upside for the stocks one day.
Hypo is wrong kind of failure for EU stress tests 20 Jul 2010 The nationalised real estate lender is tipped to fail Friday's stress tests. But diagnosing a capital deficit won't change things much. HRE has already been bailed out and the German taxpayer can foot a higher bill. The tests may need other, more painful failures to be credible.
Telefónica could still agree a deal for Vivo 19 Jul 2010 The Spanish telco refused Portugal Telecom's request to extend its 7.15 bln euro offer to buy out PT's stake in their Brazilian mobile JV. Arbitration might be Telefónica's next tactic. But an agreed deal is still possible in this extremely messy and unpredictable standoff.
IMF neither needs nor deserves more money 19 Jul 2010 The rescuer of troubled governments wants another $250 bln. But it already has $750 bln, and only just over half that was committed as of March 31. Aside from the lack of need, the IMF s track record is mixed at best. Handing it more cash risks further economic distortion.
GDF will need cash to nail International Power 19 Jul 2010 The French energy giant could take a controlling stake in its UK peer in return for injecting assets, doubling its size to 9 bln stg. But IPower investors will want compensation for surrendering control and reassurances on governance. A cash sweetener would help.
Ukraine plays hard-to-get as Eurobond stalls 19 Jul 2010 Despite high investor interest, the two sides couldn't agree on the price. Such pickiness shows how quickly Ukraine's fortunes have improved. Recent progress on structural reforms, and cheap funding from both the IMF and Russia, means Ukraine can afford to keep investors waiting.
Plan for bank capital buffers needs fine-tuning 19 Jul 2010 The Basel Committee, which sets global banking rules, wants lenders to build up extra capital buffers they could use in a crisis. Such a cushion could help prevent credit bubbles. But Basel needs to decide whether the tool's main aim is to protect banks or control the economy.
Tomkins faces final break-up after buyout 19 Jul 2010 A $4.5 bln takeover by a Canadian consortium marks the last rites for the oncefeared UK conglomerate. Stripped down to car parts and building materials, the group has struggled during the downturn. The leveraged takeover should provide the catalyst for finally breaking it up.
Hungary looks for trouble as Orban sends off IMF 19 Jul 2010 The prime minister and former football player has given red cards to the IMF and EU, which have been lending to the country since 2008. The ungrateful populism pleases the crowd, but Hungary is frail and has a lot of debt to roll over. Orban might have to play ball again soon.
AIA’s new chief could unlock two deals 19 Jul 2010 Hiring the former boss of rival Prudential removes bad blood between the Asian insurer and its biggest shareholder, clearing the decks for an IPO albeit at perhaps a slightly bigger discount. But later on, Mark Tucker may also be able to tee up a valuecreative merger with Pru.
Ireland must cut its mega-deficit 19 Jul 2010 The country had to rescue banks, to avoid systemic collapse. But the bursting of the property bubble and the rescue have hammered state finances. The fiscal deficit is close to one fifth of GDP. Further cuts are needed, but at least an exportled recovery seems to be taking hold.
Goldman needs to show business as usual 19 Jul 2010 That ll convince investors the battle with the SEC did no harm. Usual compensation gawking will be overshadowed by eagle eyes trained on trading and assets under management. If Goldman departs from the norm and reveals a harsher Q2 than rivals, Lloyd Blankfein s burden will grow.
Spain’s bank fund should raise cash while it can 16 Jul 2010 The bailout fund may be called on to inject a total of 30 bln euros into Spain's banks as a result of imminent stress tests. But the FROB has so far raised just 12 bln euros and savings banks have already asked for 11 bln. It should issue debt while markets are forgiving.
Japan embraces needed M&A – but slowly 16 Jul 2010 Companies are starting to do deals at home and overseas. But volumes are small. For many, M&A is still a last resort for failed firms and a drain on precious cash. Things are changing, but crisis elsewhere makes the usual Japanese objections to dealmaking harder to criticize.
Wall Street’s summer may now officially commence 16 Jul 2010 Goldman settled with the SEC; the Senate passed financial reform; even hapless BP may finally have capped its Gulf gusher. Then on Friday morning, bellwether GE reported its first increased profit in ages. Finance types can afford to take a breather and maybe even to party.
SEC finally puts one in the net 16 Jul 2010 The $550 mln settlement with Goldman Sachs hardly signals the start of a reign of terror by the Securities and Exchange Commission. But Wall Street's cop badly needed a goal of any sort, even if it dribbled in. More importantly, the lawsuit gave a big assist to financial reform.
Antennagate galvanizes Apple PR machine 16 Jul 2010 Steve Jobs showed the likes of BP and Goldman how spindoctoring works. Of course the comparison is unfair: the iPhone 4 problem is minor and easy to address. Still, the rumor mill was getting out of hand, and the usually aloof Apple has made a decent fist of a response.
Ocado is floating too soon 16 Jul 2010 The lossmaking UK online retailer is seeking a minimum 995 mln stg valuation in its planned IPO. But its prospectus doesn't make a convincing case for the price. The company's future profitability is just too uncertain for public market investors.
iPhone subtraction could be addition for AT&T 16 Jul 2010 The U.S. operator's days as sole carrier for Apple's iconic handset appear to be winding down. Customer growth may slow. Yet if Verizon lands the iPhone, it should push the industry toward more rational pricing for carrying data increasing returns on AT&T's iPhone customers.
UK budget watchdog finally looks independent 16 Jul 2010 The UK's new Office for Budget Responsibility got off to a rocky start. But the government has agreed to allow members of parliament to vet the appointment of its chairman. It's a pity that ministers won't let them do the same for the Bank of England governor and other key posts.
Japan embraces needed M&A – but slowly 16 Jul 2010 Companies are starting to do deals at home and overseas. But volumes are small. For many, M&A is still a last resort for failed firms and a drain on precious cash. Things are changing, but crisis elsewhere makes the usual Japanese objections to dealmaking harder to criticize.
GE shrinking into better shape 16 Jul 2010 The downsizing of the conglomerate's finance arm is making the firm healthier, as secondquarter figures illustrate. GE will eventually need revenue growth at its industrial arms. But for now, a bit of relative calm is giving the company the chance to get fitter.
Washington should be pro-market, not pro-business 16 Jul 2010 Despite corporate America's constant kvetching, it's not Washington's job to be probusiness. That smells of crony capitalism and often just means rewarding big campaign contributors. The better measure of any given policy is whether it respects market forces.
Goldman and BP suffer costly reputational hangover 16 Jul 2010 The Wall Street bank seems to have got off lightly with its $550 mln SEC settlement, while the UK oil major has stopped oil flowing into the Gulf. But both companies' market capitalisations have lost more than the quantifiable cost of each episode. The missing link? Reputation.
BofA makes Citi look good — again 16 Jul 2010 Citigroup's 7 pct ROE in the second quarter was hardly stellar. But it beat BofA's, which needed oneoffs to hit 5.7 pct. And unlike rivals, the Charlotte bank didn't crow about releasing reserves. Some mortgage costs even increased. BofA is looking like the U.S. banking laggard.
Big banks well armed for next Washington battles 16 Jul 2010 Wall Street's political clout may be diminished, but it's not de minimis. Congress still craves campaign cash, while exbankers help run its financial crisis inquiry panel. And banks still have pull with Team Obama. Those assets will help to beat back the next wave of reform.
Goldman beats SEC on points but leaves chink 15 Jul 2010 The Wall Street firm isn't admitting guilt, despite paying a record $550 mln penalty to settle CDO fraud charges. That makes the SEC's original bombast look overdone. But Goldman is conceding its disclosure was inadequate. That's something that could matter across the industry.
Liffe faces threat from chocolate abuse 15 Jul 2010 It sounds like a chocaholic's dream: 248,660 tonnes of cocoa in warehouses for traders on London's financial futures exchange. But it's a nightmare for chocolate makers. With the price at a 33year high, they smell something much more pungent than the aroma of cocoa.