Low expectations should make China do more on yuan 31 Dec 2010 The Chinese currency has risen just 3.6 percent in 2010. As political pressure ebbs and euro zone trouble spreads, traders now expect an even smaller gain for 2011. Low expectations create a window of opportunity for Beijing to make proactive changes for its own good.
Speed will not improve investors’ IPO appetite 31 Dec 2010 A shorter timetable for floatations might allow companies to dodge market turmoil when going public. But successful offerings ultimately depend on investors' confidence that the price is right. Companies, and their advisers, should be more willing to play the waiting game.
Euro scores one-hit wonder with Estonia membership 31 Dec 2010 The Baltic country's embrace of the single currency provides a rare occasion for cheer, but it's unlikely to be followed by others. Some, like Romania, won't be ready any time soon, while the enthusiasm of Poland and the Czech Republic has been cooled by the sovereign crisis.
M&A league tables produce one clear winner: advice 30 Dec 2010 As firms wrap up their annual vainglorious jockeying for position, Goldman Sachs and Morgan Stanley will again lead the pack. Even after the crisis, balance sheet banking has yet to muscle its way to the top. The likes of BofA Merrill and Barclays still have much to prove.
Apple still looks a bargain after $100 bln run 30 Dec 2010 Large companies rarely grow quickly. Nonetheless, Apple increased sales by more than 50 percent in 2010. That sent the company's value up by an astonishing $100 billion. Yet the stock's valuation still looks oddly subdued once adjusted for the company's cash pile.
Khodorkovsky verdict shows Putin still rules 30 Dec 2010 The former Yukos chief received the maximum sentence after a mock trial on trumpedup embezzlement charges. The judiciary has bowed down to Premier Vladimir Putin's whims. This further undermines the credibility of President Dmitry Medvedev, who keeps promising legal reforms.
NY county crisis shows rich aren’t so different 30 Dec 2010 Wealthy Nassau County, on New York s Long Island, is in fiscal crisis with the state poised to seize its finances. Instead of seriously tightening belts, the Republican leader slashed taxes and leaned on dubious costsaving projections. Let it be a lesson to national legislators.
China may stub its toe on rare earths quotas 30 Dec 2010 Export restrictions on metallic elements are designed to help protect domestic industry. But Chinese companies will lose if the policy leads to broader protectionism. If Beijing is serious about addressing environmental damage, it should limit rare earths production, not exports.
Oil bulls may have to pull in their horns 29 Dec 2010 They say an intensifying struggle to lift output will collide with unstoppable Asian expansion to push the oil price above $100 a barrel. In fact, the cost of crude may be held down by a halving of demand growth as producers from Russia to Africa via Brazil ramp up supply.
Weak economy shouldn’t overexcite Obama rivals 29 Dec 2010 The Fed's dour forecast predicts high joblessness will plague the rest of the president's first term. It's the strongest reason yet for any Republican who ever dreamed of occupying the Oval Office to step up and run. Many will. But Obama won't so easily be unseated.
Shares hold the investment key in 2011 – stock up 29 Dec 2010 Valuation metrics make shares look cheap. Growing corporate earnings and rising M&A activity point to higher share prices, too. Meanwhile, major alternative types of assets, especially bonds, lack appeal. Though partly faute de mieux, equities could offer strong returns in 2011.
U.S. consumers may be getting ahead of themselves 28 Dec 2010 Despite saying they feel less confident Americans opened their wallets wide this holiday season. Payroll tax relief in 2011 should keep retailers busy next year too. But temporary government support can only do so much. The housing market's travails may offer a sober warning.
Perez more than Chavez caused Venezuelan decline 28 Dec 2010 The late president nationalized oil and iron ore after the 1973 oil crisis and spent wildly on moneypit state investment. Perez' 198993 second term saw riots, coup attempts and his imprisonment. Venezuela's productivity declined by a third in 197098; this was mostly his fault.
Will 2011 be the year Facebook’s value gets real? 28 Dec 2010 Though the social network doesn't need money to grow, an IPO should come next year. Trouble is, trading in unlisted shares suggests it's already worth some $40 bln. To justify that number requires some astonishing, if just about possible, growth assumptions.
War over U.S. debt ceiling could force austerity 27 Dec 2010 The political skirmish over expiring tax cuts may pale compared to the coming battle over raising the U.S. government's borrowing authority. Republicans want to use the deadline to force spending cuts on the president. Investors should steel themselves for more brinkmanship.
Winter wonderland provides warming reminder 27 Dec 2010 After two feet of snow bombarded the U.S. Northeast, the usual grinches have come out to bemoan economic consequences. Some companies will be hit hard, of course. But the energizing psychological, and even productivity, benefits for a weary workforce shouldn't be overlooked.
Goldman’s new bonus plan captures seasonal spirit 24 Dec 2010 The bank is to use a range of metrics in setting bonuses for top staff, a formal departure from crudely paying out a slice of revenues. Bonuses would also be negated by any bailout. This will please regulators and shareholders. And where Goldman goes, others tend to follow.
No shortage of shares for bankers to sell in 2011 24 Dec 2010 Stocks are soaring, and that seems good news for the backlog of equity capital markets business. Financials, buyout firms and governments all want to sell shares. The risk is that macro worries shut markets for long stretches. Getting deals done in the good times will be crucial.
Real estate’s commercial side looks bright in 2011 23 Dec 2010 Commercial property used to be a sucker bet. Yet the rebound in big city markets like New York, Los Angeles and Washington this year has primed the pumps for a broader recovery. There's still an overhang of debt, but that won't turn off investors looking for a deal.
U.S. more country club than melting pot in 2050 23 Dec 2010 The 2010 Census reveals an unexpectedly low 9.7 pct decennial population growth. If the creation of new Americans is really slowing, then the population in 40 years may be less than 400 mln and the country less diverse, though possibly wealthier, than many expected.
Aussie two-speed economy drives two-speed M&A 23 Dec 2010 It feels like 2007 again, with hot commodity prices fuelling deal after deal, the latest being Rio's $3.9 bln bid for Riversdale. Mining M&A has found finance; foreign buyers are unfazed by the strong Aussie dollar. ASX and Fosters aside, other sectors may get left in the shade.
Vimpelcom has tactical advantage in Weather talks 22 Dec 2010 The Russian telco's agreed takeover of emerging market rival Weather hit a snag when one of its top shareholders, Norway's Telenor, voiced concern. It's easy to see how Vimpelcom can use Telenor's reservations as leverage to get better terms. And Weather has reasons to budge.
China should retain IPO crown in 2011 22 Dec 2010 Even without the megalistings of 2010, China should retain its huge lead over London and New York. Small privatisations, growth stocks and foreign companies are likely themes. That will bring new opportunities for China's underwriters and new pressures for Western rivals.
The UK is inflating, in deficit, and in danger 22 Dec 2010 UK growth is falling short of hopes. The coalition government is fragile and latest megadeficit numbers show the hard fiscal work is yet to be done. With inflation rising but growth sluggish, a rate rise could cause double dip. The Bank of England faces an uneasy ride.
Cable’s muzzling is Christmas present for banks 22 Dec 2010 The business secretary has been slapped but not sacked after unguarded remarks about Rupert Murdoch. That's great for UK banks. Cable's force as an agitator for radical change to the sector has been weakened. But had he left cabinet, he could have been a dangerous rabblerouser.
Rigged election will impoverish Belarus 22 Dec 2010 Belarus' economy shows impressive growth of 7.2 pct in 2010. However that stems from massive borrowing, subsidies from Russia and energy sector rentseeking. Its disgraceful election has damaged Belarus' access to Western money and knowhow. It may have made it a Russian vassal.
Endangered financial species: U.S. community banks 22 Dec 2010 This fixture of smalltown America is fast becoming scarcer. Hundreds have failed or sold out. But many more of the 7,760 U.S. banks will disappear a consequence, unintended or otherwise, of government and regulatory decisions codifying the biggest banks as infallible.
U.S. economy needs fewer roommates 22 Dec 2010 Stalled construction and population growth are slowly reducing America's glut of vacant homes. Yet hard times mean more people shacking up together and fewer immigrants. When this trend reverses, it spells better times for everyone from cable operators to Home Depot.
Snow chaos impact more reputational than financial 21 Dec 2010 If the spring's volcanic ash cloud is any guide, the aviation industry can swallow the financial cost of Europe's snow disruption. Hence the muted reaction of airline share prices. But Heathrow's operator, Ferrovialowned BAA, has suffered a hardertoquantify reputational hit.
Net neutrality compromise won’t calm new Congress 21 Dec 2010 The FCC's ruling will give telecom operators a reason to keep investing in their networks, while also protecting consumers. But that balance won't please purists who either deny government's regulatory role or want to make the Internet a utility. So expect a political pushback.