Taxpayers come second to company in AIG plan 30 Sep 2010 The deal with the U.S. government makes the company s finances simpler and healthier. That s potentially good for shareholders, starting with the Treasury. But initially the plan mainly just rejigs the government s interests. It doesn t get taxpayers their cash back any sooner.
Bank rescue takes Ireland to the brink 30 Sep 2010 Propping up its troubled lenders will lift the country's deficit to an astonishing 32 pct of GDP. Getting the cost out into the open is better than sweeping it under the carpet. But the underlying deficit is still 12 pct. Until that is addressed, Ireland will be vulnerable.
UniCredit risks messy compromise 30 Sep 2010 Federico Ghizzoni, who has been appointed the bank's next CEO, seems a decent internationallyminded manager not in hock to local politics. But the probable appointment of a general manager with lots of power could undermine the CEO and spawn further intrigue.
HP’s best bet for new leader lies within its ranks 30 Sep 2010 The tech group s search for Mark Hurd s replacement is leading to overheated speculation about which outsiders, from IBM or Apple, might get the job. But an inside candidate would be better placed to repair tattered morale and less likely to cause an exodus of talent.
Even Ivy League may get it wrong on equities 30 Sep 2010 Annual updates from endowments like Harvard and Yale add to evidence investors have fallen out of love with public equities. That s understandable after a decade of no returns. But with stocks cheap and bonds hopelessly stretched, investors may rue this underweight position.
U.S. tax debate should bypass old German theory 30 Sep 2010 The expiry of Bushera tax cuts could hurt the anemic U.S. recovery. Hawks reckon that's an acceptable risk, saying America can't afford to extend them. But that assumes belief in Wagner's Law, which posits everhigher public spending a bit of dogma in need of debunking.
U.S. trade thaw may leave China out in cold 30 Sep 2010 Passage of a retaliatory China currency bill in the U.S. House helps brand this Congress one of the more protectionist in years. The next one might well embrace trade by passing several stalled pacts. But Beijing shouldn t expect that to translate into a friendlier Washington.
Pru’s chairman should not be allowed off the hook 30 Sep 2010 The UK insurer is looking to add city bigwig Paul Manduca to its board, potentially as senior independent director. After Pru's failed AIA bid, new board members are vital. But unless Manduca's task is to identify a new chairman, the reshuffle won't go far enough.
Rolls-Royce finds clever succession solution 30 Sep 2010 After his 14 years as CEO, succession to John Rose was coming to dominate analysis of the UK aeroengine maker. Now he is finally stepping down, an outsider from food retailing has been appointed in his place. The move makes more sense than it might seem.
Swiss finish could make life harder for UBS and CS 30 Sep 2010 Regulators want the country's two biggest banks to hold more capital than the new Basel minimum. Switzerland is rightly nervous about another blowup. But unless other countries follow suit, UBS and Credit Suisse may find it tough to compete in some areas of investment banking.
HP at least half-right with new leadership choices 30 Sep 2010 The tech company s decision to appoint exSAP boss Leo Apotheker as CEO raises questions. He was forced out at SAP, and may have a tough time firing up HP s troops. On the other hand, HP s decision to split the chairman and CEO roles is solid.
Irish woes further dent cred of euro stress tests 30 Sep 2010 The summer's health check of European banks already looked soft it turned a blind eye to sovereign exposure outside the trading book. The fact that Irish banks need a fresh bailout shows another flaw: the biggest offender, Anglo Irish Bank, wasn't even part of the test.
Bizarre tender could tar Medvedev’s reputation 30 Sep 2010 Russian oil majors Lukoil and TNKBP are crying foul after being barred from a landmark tender for two Siberian oilfields. Authorities say they lacked paperwork, but it looks like the tender is being rigged to benefit an oil company backed by President Dmitry Medvedev.
Spain will survive its latest downgrade 30 Sep 2010 Moody's was the last of the rating agencies to knock Spain's AAA rating. It did so by just one notch. This should encourage the government to stick to its guns on fiscal discipline, as it sends its austerity budget to parliament. But if growth stalls, it will have to do more.
China IPO frenzy returns – but not in China 29 Sep 2010 Domestic investors are no longer blindly in love with new stocks. But foreign markets seem to be. Four Chinese companies rose on average 52 percent on their debuts in New York and Hong Kong. Cashrich global investors like growth, but new supply may test their exuberance.
Reserves and growth make Severstal Gold attractive 29 Sep 2010 Russian miner Severstal looks set to spin off its gold division in a London listing likely to value it at around $4 billion. The rumoured price isn't cheap. But international diversification, large reserves and growth prospects should make the issue a hit.
Prosecuting politicians for negligence is bad idea 29 Sep 2010 Retired leaders should be liable for corruption or war crimes. But Iceland's decision to charge its former premier with negligence during the banking crisis sets a poor precedent for any civilised state. It looks vindictive, and will deter future politicians from seeking office.
Pulled insurance IPO adds jobs risk on Wall Street 29 Sep 2010 Liberty Mutual Agency was teed up as the biggest U.S. flotation of the year and a key test of investor appetite for a backlog of issues. But the $1.2 bln deal was yanked at the last minute. Weaker trading already has bankers nervous. If IPOs flag too, more could face the sack.
Etisalat offer calls time on Zain’s independence 29 Sep 2010 Kuwaiti telco Zain used to want to be a global champion. But it recently sold its African unit to India's Bharti and now UAE rival Etisalat is offering at least $10 bln for what's left. With a big investor keen to sell, Zain looks set to be consolidated, not a consolidator.
Why is Citi paying a Houston oil banker $30 mln? 29 Sep 2010 That s how much the bank, which pays its CEO $1, reportedly offered UBS s energy team chief. It s a hot sector, and Stephen Trauber is being paid for performance. But such largess risks angering Citi s rankandfile and exacerbating its cycle of having to overpay for talent.
Green Mountain disclosures look like cockroaches 29 Sep 2010 The coffee firm s growth attracted a crazy valuation. Now an SEC inquiry is brewing and Green Mountain revealed curiosities about its accounts, raising fears others will crawl out. Clarifying how it books sales, its feeble cash flow and why it s gobbling up licensees would help.
Dubai returns to bond market right on time 29 Sep 2010 It may seem too soon for the emirate to be selling its first bond since flagship conglomerate Dubai World was forced into a $25 bln restructuring last year. Creditors are still licking their wounds. But the emirate is right to see now as a good moment to test investor confidence.
Depression warning has weight but QE should wait 29 Sep 2010 Adam Posen has called for more quantitative easing. The member of the Bank of England monetary policy committee's fears of a slump cannot be easily dismissed. But policy is different from the 1930s and protectionism has been avoided so far. More QE should remain on hold for now.
D.E. Shaw staff cuts only hint at hedge fund pain 29 Sep 2010 The fund manager that once employed Larry Summers slashed a tenth of its workforce. That s the kind of thing investment banks, not veteran money managers, do. But relative to the kind of business decline Shaw must be experiencing as assets have fled, it s almost charitable.
HK’s first proper proxy fight sets right tone 29 Sep 2010 Shareholders in GOME have foiled its jailed founder's plan to kick out two board directors, but denied the Chinese retailer the right to dilute him at will. That's the right result. GOME may gain more by learning to live with the troublesome activist than by trying to squash him.
Protests unlikely to derail EU fiscal tightening 29 Sep 2010 Spain has gone on general strike for the first time in eight years. Unions across Europe want a demo in Brussels. But in spite of appearances, opponents don't seem to expect governments to retreat from austerity. Unemployment, and subdued political opposition, explain why.
BP’s board clean-up has far to go 29 Sep 2010 The Gulf of Mexico disaster has claimed another victim, in the shape of BP's key exploration and production division. The boss is going, and it's to be broken into three pieces. Further postMacondo upheavals are coming, and safety is paramount. Let's hope they mean it this time.
Man Group’s slide shows why it needs GLG 28 Sep 2010 The hedge fund group must improve its performance and draw in more funds to reverse falling management fees. While there are positive signs among institutions, private investors are still wary. The impending takeover of rival GLG should boost sales. It can't come soon enough.
Morgan Stanley job freeze bodes worse for rivals 28 Sep 2010 It s one of the few Wall Street firms earning more revenue than it did last year and socked away more to pay staff. That s why CEO James Gorman has only had to stop hiring rather than start firing. Some banks have started to trim. It sounds like others need to follow suit.
AOL’s spending spree doesn’t speak to a strategy 28 Sep 2010 The Internet firm is redeploying cash from its fastfading dialup business into the acquisition of dotcom sites. Fair enough AOL needs to remake itself. But it s hard to see an investment thesis in buying a video syndication firm, a hyperlocal journalism site and tech blogs.