Silver high is riddled with investment doubt 8 Apr 2011 Record silver and gold prices show investors are wary of dollars and euros and have an intense fear of global inflation, which U.S. Federal Reserve moneyprinting is pumping up. The unfortunate result is that investors are not buying into safety, but a precious metal bubble.
Minmetals must work harder to win over Equinox 8 Apr 2011 The Chinese miner's $6.6 billion offer for Equinox looks better for the Australian copper producer than its planned bid for rival Lundin. But Equinox might be better still with no deal at all. If Minmetals wants to win out, it may need to offer 15 percent more, and quickly.
Expedia aims for (social) network effect 8 Apr 2011 The $6.8 bln online travel company plans to spin off its popular TripAdvisor site that allows tourists to share tips with each other. That should help it capitalize on the investing fever for online communities. But the flight and hotel booking sites left behind could suffer.
Oil sands bonanza hemmed in by land and politics 7 Apr 2011 Soaring crude has made even the most stubborn of Canada's oil sands profitable to extract. But hopes of doubling output could still be dashed if new pipelines are blocked. Boxing in Canada's bounty could hurt U.S. interests and richlyvalued sands producers like Suncor.
Geronzi’s 17 million euro pay-off sticks in craw 7 Apr 2011 Generali's exchairman undermined his chief executive and alienated board members. To force him out, the Italian insurer has now given him 1.5 million euros for each month he was in this post. This is an astonishing payment for being a nuisance.
When China worries, investors should too 7 Apr 2011 The arrest of outspoken artist Ai Weiwei may be paranoia, but it reflects a real worry that social stability is at risk. Foreign investors in China may be too gungho. Either a tootough government response, or a failure to keep order, would shake the economy.
U.S. bank boards escape post-crisis clear-out 7 Apr 2011 Too few directors recognized the complex risks their institutions were taking before the crunch. The financial expertise on bank boards isn't any more extensive today. And as shown in part by Goldman's pay extravaganza, other areas of governance could do with a springclean, too.
Nomos Bank’s IPO plans belie usual Russian fears 7 Apr 2011 A forthcoming London listing means Nomos will shortly expand the tiny universe of traded Russian banks. Its rapid growth and high profitability belie fears that private Russian banks can't compete with the stateowned giants. And a reasonable discount helps sweeten the offering.
Portugal’s road to bailout will be rocky 7 Apr 2011 Lisbon has bowed to the inevitable, but who runs Lisbon? Europe and the IMF can't accept to bail out Portugal if it doesn't agree on minimum concessions. That looks tricky given the country's power vacuum. But, with the wheels in motion, Europe can't afford to say no.
IPO hopefuls want to sit around OpenTable 7 Apr 2011 The backers of nearly every company to market with an Internet angle Zipcar, Pandora, Zillow are conjuring comparisons to the restaurant reservation site whose shares have quintupled since their debut. While similarities exist, none have OpenTable's moat or network effect.
Republican U.S. budget plan enlists market forces 7 Apr 2011 The blueprint is simple: cap federal healthcare spending to cut debt. But the idea risks backlash if medical cost inflation doesn't slow. The GOP thinks competition rather than bureaucratic tinkering will help. International examples provide some encouragement.
Spain cannot afford to be complacent 7 Apr 2011 The country has persuaded investors it is not part of the euro zone's troubled periphery. But Portugal's bailout puts it back in the spotlight. Prime Minister Zapatero should use his final months in power to push through more structural reforms, and sort out the financial system.
Spanish bad bank may be least bad option 7 Apr 2011 Bankia, the merger of seven savings banks, is dumping its problematic land assets in a separate unit backed with existing state money. That will make it easier to find investors for the good bits, avoiding a further bailout. But if the bad bank goes bust, taxpayers will lose out.
Investor AB takes baby step to fixing valuation 7 Apr 2011 The Wallenberg family's listed investment vehicle is restructuring in a bid to close its 30 pct discount to net asset value. Simplification and cost cuts are a move in the right direction. But there's no evidence of a seachange in management's attitude to external shareholders.
Jefferies could yet turn into a Goldman – or a DLJ 7 Apr 2011 The bank's $430 mln swoop for Prudential Bache is its latest move to bulk up. Jefferies is bigger than a boutique but a far cry from the bulge bracket. It has more scope to grow rapidly unless it comes at too high a cost. Like DLJ or the Four Horsemen, a sale may come first.
China bulls look to hedge their bets 6 Apr 2011 Cheap dollars still pour into the fastgrowing economy, but as inflation accelerates, investors want more protection. With China's capital markets all but closed, that requires some ingenuity. Taiwan, Australian rates and Korean debt are among the popular proxies.
Commerz’s 8 bln euro cash call helped by state aid 6 Apr 2011 The German bank's biggerthanexpected rights issue allows it to turn 11 billion euros of state capital into proper equity. But the government is helping by speeding up the process and by allowing Commerzbank to aim for a lower capital target than some European rivals.
Europe’s latest bank re-cap wave is one to surf 6 Apr 2011 When banks need equity, the best strategy is to be the last investor in. That moment has finally come in Europe. Bad debts are receding; regulation is less murky. While stress tests and euro zone woes remain a concern, the riskreward balance has shifted in shareholders' favour.
Actelion makes cunning but slow tactical retreat 6 Apr 2011 Activists seeking change at the Swiss pharma have won a small governance victory with the appointment of former GSK CEO JP Garnier as chairman designate. While it is not clear Garnier has the right ideas, it may now be harder for the activists' board slate to win election.
Transocean bonus mess makes Goldman look sensitive 6 Apr 2011 By awarding safety bonuses the deep sea driller involved in the Macondo disaster set a new standard for chutzpah. Hastily donating this to a victims fund won't undo the damage. Energy bigwigs on the board have justified public cynicism about the entitlement culture of Big Oil.
CoCo investors must remain calm in a crisis 6 Apr 2011 Several banks have issued contingent securities that convert into shares if capital ratios fall. The Bank of England's Andy Haldane thinks market valuations are a better signal of distress. But the real test for the bonds will be whether investors panic when a CoCo goes pop.
SEC needs to pull out stops with Buffett’s deputy 6 Apr 2011 Any reasonable lay reading of how David Sokol bought and sold Lubrizol shares shows a violation of the spirit of insider trading rules. Yet lawyers consider the situation a fuzzy one. If a case isn't attempted, it will make a mockery of U.S. law, the securities watchdog, or both.
Portuguese banks’ plea could help break stasis 6 Apr 2011 Portugal is in political limbo but the country's banks can't wait. They are threatening to boycott the country's debt if the caretaker government can't obtain a lifeline until a European bailout can be arranged. This is unruly, but desperate times call for extreme measures.
U.S. could benefit most from Colombia trade deal 6 Apr 2011 A new deal on labor has unblocked the path to U.S. ratification of the two nations' free trade agreement, which has languished since 2006. The FTA may come just in time: China and others are courting the emerging, commodityrich Colombia and America's trade lead is under threat.
TXU creditors should hold off on extending loans 6 Apr 2011 Partly to quiet an agitating hedge fund, KKR and TPG want to rejig a $20 bln loan that funded the record LBO of the Texas power giant in 2007. But pushing maturity from 2014 to 2017 would make repayment a bet on U.S. natural gas prices. That's a wager lenders needn't make yet.
Italy better off with Geronzi-less Generali 6 Apr 2011 The Italian insurer's chairman has been forced out by his own board. That's good for Generali, which was descending into civil war. But the ousting of the archpower broker is also good for Italy: it could signal a key moment in the evolution of its duff corporate governance.
Exclusive: Is Cisco bracing for an activist siege? 5 Apr 2011 At nearly $100 bln, Cisco makes a difficult target. But its stock has been dead for a decade amid poor capital allocation and a flawed strategy and execution. A tiny spark may be enough to incite change. CEO John Chambers latest memo to staff suggests he s aware of the danger.
Texas Instruments makes smart $6.5 bln bet 5 Apr 2011 The chip company is paying an eyebrowraising 78 pct premium for rival National Semiconductor. But the target is solidly profitable even with its factories running at a slow tempo. Speed them up as this deal should and TI should generate a nice return on its investment.
ECB rate hike: better now than later 5 Apr 2011 The ECB is likely to raise its key interest rate this week, the first major central bank to do so postcrisis. It could constrain growth in the euro zone and make things harder for periphery countries. But with inflation looming, now is the right time to act.
City of London would survive bank HQ decamp 5 Apr 2011 The UK financial centre would be hit if lenders moved their headquarters to escape new bank rules. But London's success depends on its power as a magnet for international finance. Tax policy may be more important for maintaining the City's appeal, says Peter Thal Larsen.