U.S. corporate tax debate needs directional shift 28 Sep 2010 The hotbutton campaign issue of jobs offshoring is driving a vote on taxing overseas income of U.S. multinationals. The bill looks set to fail but corporate taxes do merit attention. A territorial regime and rate cut would shift the debate from the political to the sensible.
Rattner opus won’t much aid rehabilitation 28 Sep 2010 The former U.S. car tsar has penned a mostly good read about the bailouts of GM and Chrysler. But his mixture of bluntness when passing judgment on others with reserve on bigger issues amplifies a sense of ambivalence and may not endear him to prospective colleagues.
Mayor’s ouster won’t solve Moscow’s problem 28 Sep 2010 The abrupt sacking of mayor Yuri Luzhkov could help improve the city's negative investment climate if his successor gets a free hand to tackle the Russian capital's rampant corruption. But the way he was ousted leaves little hope this will happen.
Barnes & Noble nailbiter ends with a cliffhanger 28 Sep 2010 The bookseller s chairman, Leonard Riggio, narrowly fought off Ron Burkle s attempted board insurrection. Shareholders were right to leave the dissident on the sidelines, as he lacked a strategy. But the company must now find a way to sell, or save itself from the abyss.
Israel’s goof teaches lessons on energy royalties 28 Sep 2010 Giving away energy resources too cheaply as Israel has done always gets governments in a pickle. Voters demand a better deal while firms balk at retroactive hikes. With energy prices out of the headlines, now is a good time to think about fixing flawed royalty structures.
EU should resist ECB’s fiscal policy power grab 28 Sep 2010 Trichet, the ECB president, wants euro zone governments to answer his questions on fiscal deficits, and suggests a committee of wise men should monitor budgets. This goes too far. Budgetary policy is a matter of government responsibility, not central bank meddling.
Investment banker CEOs need to learn new tricks 28 Sep 2010 Traders and dealmakers are taking charge of some of the world's largest lenders. The crisis showed the importance of understanding markets and managing risk. But if regulators and investors get their way, the new bosses will need a crash course in oldfashioned retail banking.
Counterpoint: Irish bank bondholders must bear pain 28 Sep 2010 Dublin is about to reveal its best guess at the cost of rescuing Anglo Irish. Neil Collins takes issue with those who think the state should keep paying on Anglo's senior bonds. It's time to let this bad bank fail.
China’s billionaires not ready to give like Gates 28 Sep 2010 Bill Gates and Warren Buffett may struggle to rustle up philanthropic spirits on their tour of China. The country's billionaires are still insecure about their wealth, and trustworthy charities are lacking. Yet as China's wealth gap widens, more generosity might be a good idea.
China may ultimately hold gas whiphand over Russia 28 Sep 2010 Medvedev's trip to Beijing has nudged forward a deal to supply the Chinese with gas. But the price hasn't been fixed, the market has softened and new production technologies suggest that the longer China waits, the more options it will have.
Another red flag raised over UK corporation tax 27 Sep 2010 Wolseley is redomiciling to Zurich for tax reasons. The bluechip UK building supplies group will escape harsh taxes on income from its sprawling global empire. Capitalised, the savings could be worth 400 mln stg. This may add oomph to the coalition's review of the status quo.
China may find United Biscuits hard to digest 27 Sep 2010 A Shanghai conglomerate may pay 2.5 billion pounds for the privateequity owned maker of nobbly treats such as Twiglets and Hobnobs. The price looks indulgent. But Bright Food probably cares more that the UK snackmaker will enhance its revenues, and comes without political fuss.
SFR deal could help solve a double discount 27 Sep 2010 Vivendi and Vodafone both suffer conglomerate discounts. If the French group buys out its UK partner's $14 bln stake in their SFR mobile venture, both sets of investors should benefit. It's time to talk now that Vivendi has received a chunk of cash from selling out of NBC.
UK’s opposition party retreats from reality 27 Sep 2010 Ed Miliband's election as Labour leader marks a lurch to the left. The trade unions whose votes clinched it believe high taxes are a good thing, and that the deficit is not a pressing problem. Unless Miliband ditches this baggage, David Cameron may be in power for a decade.
Landesbank talks a step in the right direction 27 Sep 2010 WestLB and BayernLB, the troubled stateowned banks, are mulling a tieup that would create Germany's third largest lender. Consolidation makes sense, but local politics will make it hard to strike a deal. Berlin will have to use all its influence to help overcome the obstacles.
Wal-Mart sounds pricy vuvuzela on African growth 27 Sep 2010 It could grate on shareholders ears to hear the U.S. retailer may pay 13 times EBITDA for South Africa s Massmart. But the $4.2 bln purchase will give WalMart a local vehicle and local knowledge to help gain access to a huge market with a profile that should suit it well.
Southwest’s $1.4 bln AirTran deal pays for itself 27 Sep 2010 The dominant discount airline s takeover gives it valuable gates in Atlanta and several Northeast cities. While AirTran poses operational risk and comes at a 69 pct premium, the promised synergies are worth about $2.8 bln. Even if some savings disappear, the deal stacks up.
Uncle Sam’s AIG exit likely to be drawn out 27 Sep 2010 Converting $49 bln of preferred stock to common shares and selling them would, like the government s exit from Citigroup, take a while. And that s assuming other share sales, needed for separate repayments relating to AIG, go smoothly. Taxpayers shouldn t hold their breath.
Intesa deal may be future of hybrid bank debt 27 Sep 2010 The Italian bank has issued a 1 bln euro bond it hopes will comply with future bank capital rules. That suggests there may be a viable market for the riskier, lossabsorbing debt that regulators want to see. But the future of the capital instruments is still far from sure.
Beauty doesn’t come cheap in Unilever’s Culver buy 27 Sep 2010 The AngloDutch consumer goods group is paying more than 14 times EBITDA for its $3.7 bln purchase of U.S. hair and skin care products company Alberto Culver. But behind the headline cost, Unilever should have plenty of savings to squeeze out of the tube.
Ireland’s only road to solvency is more cuts 27 Sep 2010 The emerald isle's GDP fall is encouraging some to say the cuts are too savage. But that's wrong. Ireland can't do much to cut the cost of its bank bail out and turning to the EU would provoke panic. Public sector pay ballooned in the boom and must be cut. And growth will return.
Oil prices will guide Venezuela’s political future 27 Sep 2010 The opposition victory in Sept. 26 elections gives Hugo Chavez international credibility, but does not restrict his power much. If oil prices hold up, he will have the cash to keep his form of Bolivarian socialism alive and the power to win 2012 s presidential election to boot.
Louis Dreyfus merger looks odd for Olam 24 Sep 2010 A deal could be worth $15 bln and would create the world's third largest agricultural commodities trader. Big may be better in trading, and the tieup could advance the French group's strategic ambitions. But a combo may dilute the attractions of nimble Singaporeanbased Olam.
UniCredit fiasco worse than HSBC’s 24 Sep 2010 The Italian board's governance is more convoluted and the defenestration of its boss more dramatic than its UK counterpart's. Finding a new CEO with the backbone to stand up to local and national politicians will be a huge challenge. No wonder the stock has been squished.
Mongolia may benefit from being late to party 24 Sep 2010 This Mortar Economy wedged between two BRICs has been slow to open up to global finance. But it may soon have a stock market, perhaps run by the LSE. Mongolia's tardy arrival may help it capitalize on the convergence of booms in China, commodities and pioneer markets.
Comcast needs to show it’s ready for prime time 24 Sep 2010 The cable giant has pushed out Jeff Zucker, who failed his way up to running NBC Universal. There, he presided over a latenight programming debacle and a 30 pct drop in profit. His replacement, Steve Burke, is a respected Comcast manager. But both are unproven in programming.
Confidence the missing link for real M&A recovery 24 Sep 2010 The market is doing a good impression of being back on its feet, after a disastrous 2009. But the numbers are flattered by some blockbuster deals. Stronger balance sheets, cheap finance and the need to cut costs mean the ingredients are there. What's missing is confident CEOs.
UK bank probe keeps options, but route is clear 24 Sep 2010 The opening message from the commission into UK banks is that everything's on the table: GlassSteagall breakups, antitrust remedies, you name it. But while the commission has given itself latitude, it's easy to see what it should, and probably will, end up deciding.
Petrobras gets its $70 bln, but questions linger 24 Sep 2010 The oil giant got its cash and shattered a 23year record for the largest share sale. But in supporting the partial renationalization investors took a leap of faith. In their excitement over Brazil s bumper reserves they have overlooked the pitfalls of greater state control.
Shadow banks benefit from Wall Street’s red glare 24 Sep 2010 Blackstone is seeding a hedge fund for commodity traders leaving Credit Suisse. With even foreign institutions wary of breaching the Volcker Rule, opportunities are flowing to the nonbank system. It s another reason hedgies should count their regulatory blessings, not complain.