G8 can help transform Middle East economies 25 May 2011 The World Bank has pledged $6 bln of aid to Egypt and Tunisia. But the G8 summit this week could go further and come up with a larger plan to support the Arab spring, focusing on job creation rather than debt relief. It needs to be significant to help restore investor confidence.
Oprah should heed Martha’s depleted worth 25 May 2011 America's daytime TV queen is bidding farewell to her show after 25 years, just as the faded domestic goddess announces a return to her fallen company. Oprah earns more each year than Martha Stewart Living is worth, even after a bounce. But personal brands can lose value quickly.
UniCredit should brainstorm its third capital hike 25 May 2011 Unlike peers, Italy's biggest bank hasn't issued fresh equity to meet the central bank's exacting new standards. Two past cash calls and a tricky shareholder base help explain its reluctance. But with the euro zone in flux, UniCredit's new boss needs a more proactive strategy.
Yandex shows Russian venture capital potential 25 May 2011 The search engine's $1.3 billion IPO is a hit, but the big winners are the private investors who financed Yandex's earlier growth. Their success shows there is big money to be made from backing entrepreneurial Russian companies in fastexpanding sectors such as IT.
Soft sterling is cushioned by euro weakness 25 May 2011 There's not much to like about the pound. Inflation is high while growth and interest rates are low. Jobs and wage data mean the wait for a UK rate rise may go on. Rates are rising in the euro zone, but the worsening euro crisis may make sterling a shelter.
Big Oil not even convincing owners on fracking 25 May 2011 Hardnosed oil investors tend to give green proposals short shrift. But chunky minorities of shareholders backed calls for greater openness on hydraulic fracturing at Exxon and Chevron. If many investors in the companies still want reassurance, oil firms are losing the PR battle.
U.S. energy’s steady middlemen look neglected 25 May 2011 Mostly held by partnerships, oil pipelines offer marketbeating returns. And after looking dear for a time, the $245 bln sector again looks affordable. El Paso and others are spinning off the units. Many shun the complexity, but it means higher returns for those who do invest.
E-pay plan drags U.S. banks into 21st century 25 May 2011 They aren't wholly devoid of innovation. But the BofAChaseWells Fargo venture allowing retail clients to pay each other online is old hat in other markets. It's a sign America's banks are finally playing catchup. There's plenty more they could be doing or others will.
Latest scrutiny of SAC also takes on SEC 24 May 2011 A U.S. senator is scrutinizing trading activity at Steve Cohen's hedge fund firm. He has called on the securities regulator to hand over a decade's worth of evidence and explain its decisions. SAC gets the headlines but the check on the watchdog's record warrants attention, too.
Uncle Sam scrambles signals on smartphone privacy 24 May 2011 BlackBerries and iPhones record our daily lives. But the law shielding the data is up for grabs. An Oregon court is mulling whether cops need warrants to search a phone and it's an issue that has split U.S. judges. People and businesses can only wait for the law to catch up.
London drift bares Gulf stock markets’ weak spots 24 May 2011 Prominent UAE and Qatari stocks are looking west to boost valuations or list the majority of their shares. That's a bad advert for local markets. But Gulf companies might better reap the full benefits of going abroad if they also embraced tighter governance and listing standards.
Dearer bank debt is right price to pay for reform 24 May 2011 Moody's is considering downgrading 14 UK banks because they no longer have taxpayer guarantees. Lower ratings will push up funding costs and raise the price of credit in the economy. But removing promises of government bailouts is necessary to avoid another crisis.
IBM looks set to sustain march on tech rivals 24 May 2011 Big Blue's pitiful state 20 years ago forced it to shift from hardware to corporate software and services. After taking different paths, rivals like HP, Cisco and Microsoft are trying to find their way. IBM's market value now tops them all and shows no signs of relenting.
El Paso reminds Big Oil breaking up is easy to do 24 May 2011 The nice lift the $15 bln firm got from cleaving wildcatting from pipelines may not do justice to market enthusiasm since the move was expected. But trailblazers like Marathon also have held onto split gains. Oil majors now have a full body of evidence of what investors want.
Only China can tackle its own dodgy accounting 24 May 2011 Serious reporting shenanigans have hammered several U.S.listed Chinese companies most recently Longtop. However, American investors and regulators have little redress across the Pacific. They should practice healthy skepticism until China opens and polices its own markets.
Compromise may be best fix for Swiss bank rules 24 May 2011 Tough regulations are forcing UBS and Credit Suisse to rethink their businesses. Relocating would be tough, while divesting investment banking would undermine synergies. The banks' best hope may be to ringfence their riskiest operations in return for a discounted capital charge.
Greece blinks first to avoid euro zone showdown 24 May 2011 Athens says it will shrink its budget by a further 2.8 pct of GDP and jump start privatisations just as talks with the euro zone, the IMF and the ECB were veering towards confrontation. The troika is right to play hardball. But in the end it can't afford to let Greece sink.
Spanish reforms in doubt after socialist defeat 23 May 2011 In spite of a major defeat at the polls, Prime Minister Zapatero will try to hang until general elections next year. He may not be able to. And it's unclear what conservatives would do in power. The uncertainty won't help Spain's efforts to get its deficit under control.
Italy may not dodge the next crisis 23 May 2011 Rome has probably avoided the current euro crisis, despite S&P's decision to cut its outlook. But unless the country can reform its political and economic system and at present, that doesn't seem likely it could be brought to the brink the next time the global economy dives.
Lagarde is wrong choice to head IMF 23 May 2011 Europeans are pushing for Christine Lagarde to take the helm at the IMF. But she's had little personal input on economic policy since becoming French finance minister. It's hard to see what she would bring to the job. She's also yet to demonstrate leadership qualities.
Markets face up to QE2 exit and euro zone impasse 23 May 2011 Weak Chinese data has bashed Asian equities, with a knockon for global stocks. As support from U.S. money printing and the dollar carry trade ends, equities will struggle to absorb blows from inflation, higher rates and an unresolved euro zone crisis that threatens a default.
Jimmy Choo shows buyout firms can run in heels 23 May 2011 The luxury shoemaker's private equity backers have made a stellar return from their topofthemarket investment. Its new owners, the Benckiser heirs, won't make as fast a buck. But the deal makes sense as a longterm bet on storming the Asian luxury market.
TMX sounds hollow rebuff to Canadian counteroffer 23 May 2011 None of the Toronto bourse's objections to the Maple consortium's C$3.6 bln bid look insurmountable a couple apply equally to its deal with LSE. In fact, TMX's move is more like a thinly veiled request for more money than an outright rejection of its homegrown suitor.
EOG gets scant credit for oil exploration prowess 23 May 2011 The $28 bln U.S. independent energy group was America's most successful oil explorer in 2010, finding almost as much crude as five majors combined. Yet its shares have lagged over the past year. EOG's trawl didn't come cheap, but the firm deserves more kudos from investors.
Internet bubble brings back dubious metrics 23 May 2011 LinkedIn's 109 percent pop on its opening day shows investors are hungry for techstyle growth. That's good news for firms hoping to go public, ranging from Russian search engine Yandex to Groupon. But pegging firms by their revenue potential is risky. Profits matter in the end.
Global financial system need not fear hedge funds 23 May 2011 The $2 trln industry is lobbying alongside private equity, other asset managers, insurers and the like to avoid restrictions that might hit U.S. firms deemed too big to fail. The latest data on hedge funds suggest they may be among the least of regulators' worries for now.
Saudi $4 bln lifeline to Egypt won’t come for free 23 May 2011 Riyadh has pledged soft loans and central bank deposits to help Egypt out of its economic doldrums. This dwarfs aid offered by the U.S. and will make the kingdom one of Egypt's largest creditors. Cairo cringes at IMF aid's conditionality but Saudi money will have a price too.
Rajaratnam wrongs hide insider trading law flaws 20 May 2011 The Galleon founder's crimes were clear. But many U.S. cases turn on rubbery legal concepts with gray areas, like the Sokol affair and trading in Congress. A law that sharply defines illegal insider trading would save investors from having to guess between right and wrong.
Moral hazard is clue to solving euro crisis 20 May 2011 The idea that entities don't learn lessons unless they feel pain is valid in the euro zone but only if the blame is shared properly. The mess isn't just the responsibility of profligate Greeks, but also foolish banks and hypocritical Germans and French. Each needs to suffer.
Private equity’s selective secrecy doesn’t fly 20 May 2011 Buyout shops don't like to say much about deal performance. But as Cinven's $3.5 bln sale of Phadia shows, they're happy to brag about big returns. More disclosure is welcome. But it should be clear and consistent. It's OK to crow but firms should be willing to eat it too.