Morgan Stanley should keep two at the top 11 Jul 2011 The investment bank's directors may add the chairmanship to CEO James Gorman's duties when John Mack retires. They should resist, and not just because Gorman is still rebuilding. Separating the roles balances power in the boardroom, which establishes better corporate governance.
Peabody’s $5 bln coal bid re-run has better chance 11 Jul 2011 The U.S. energy firm's replay of last year's failed bid for Macarthur, the Aussie coal producer, is no more generous even though coal prices have risen. Peabody may have to sweeten the terms, but with key shareholder ArcelorMittal on side, the prize is in its sight.
Tech guru may be best hope for News Corp holders 11 Jul 2011 Renowned venture capitalist Tom Perkins is the closest thing to a truly independent director amid Rupert Murdoch's cronies. Perkins also quit the HP board over a phonehacking scandal. He should be the one to lead the charge for a badly needed overhaul of News Corp's governance.
Obama’s budget push comes half-year too late 11 Jul 2011 The president was elected partly on the strength of his stated Team of Rivals approach to governing. Yet he ignored a harsh but fair budget plan thrashed out by his own bipartisan debt panel last year. The mad scramble now means chances for a meaningful deal have been lost.
U.S. say-on-pay votes more useful than they appear 11 Jul 2011 A 98 pct approval rate suggests shareholders blew the chance to curb executive compensation. But owners generally supported pay for performance and dinged companies that lagged. Any sizable no vote attracts the attention of boards, and investors should keep the pressure on.
Abu Dhabi debt confusion needs clearing up 11 Jul 2011 The emirate doesn't formally guarantee the debt of governmentowned entities like TDIC or Aldar. Whether it does or not is worth billions to investors and to its own economy. Either the lessons from Dubai World have been ignored, or Abu Dhabi wants to make a point at a cost.
Italian banks caught in sovereign crossfire 11 Jul 2011 Shares in the country's lenders are under heavy pressure, despite shortselling curbs. Most banks are depositrich and many have taken steps to bolster capital. But their holdings of Italian sovereign debt mean their finances are inextricably linked with those of the government.
U.S. jobs rout should give fiscal hawks pause 8 Jul 2011 The loss of 39,000 government positions in June aggravated tepid business hiring. In the past year, the shrinking public workforce has offset over a third of private job growth. Drastic budget cuts could mean more unemployed workers that companies don't look ready to absorb.
Italy can’t afford to waver on austerity 8 Jul 2011 Rome is sending mixed signals on its fiscal plans. Its finance minister has been weakened by a corruption probe into a close associate. With spreads on Italian debt at euroera highs, investors' patience may be running out. Italy should frontload its austerity programme.
CEO’s pay package hits brazen new high – and low 8 Jul 2011 Simon Property is giving boss David Simon shares worth $120 mln to stick around till 2019. The giant U.S. mall owner started by his father and uncle has rebounded well from the recession. But Simon already has a fat compensation deal. Executives don't deserve bonuses to show up.
BSkyB shares are pulled both ways 8 Jul 2011 The crisis at News Corp reduces its chances of successfully taking full control of BSkyB. But if there is a deal, it is likely to be at a higher price than previously thought. Our calculator helps you work out where the UK satellite broadcaster's shares should trade.
Russia backtracks on electricity liberalisation 8 Jul 2011 Three years after its landmark privatisation, Russia's electricity industry is moving back under state control. A merger between Gazprom's power holdings and those of Victor Vekselberg compromises the sector's liberalisation, illustrating inconsistencies in the reform.
AB InBev has the hops but should avoid Foster’s 8 Jul 2011 The beer giant has almost fully recovered from its AnheuserBusch binge: divestitures are done, leverage is down and synergies captured. That means freedom for management to brew new strategies. But spending a fortune Down Under, instead of in emerging markets, wouldn't be wise.
Carmakers indulge in sales pipe dreams again 7 Jul 2011 Nissan reckons it'll almost double global sales by 2016. Ford is targeting a 50 pct bump, VW a tad less. If rivals match that growth, in five years' time makers will be producing 20 pct more cars annually than market forecasters currently expect to be sold. Disappointment awaits.
Bargepole still required for IKB 7 Jul 2011 The German commercial lender was one of the first victims of the credit crunch. After shrinking the balance sheet, its private equity owner wants to sell. But while IKB might look like a cheap way into a strong euro zone economy, buyers should still proceed with extreme caution.
Emerging U.S. budget deal deserves close scrutiny 7 Jul 2011 Encouragingly the White House is upping the ante in talks to raise the debt limit, pushing for a pact that would include $4 trillion in budget savings. But investors need to curb their excitement until they've examined the proposed cuts to be sure they're free of actuarial fudge.
Obama’s trustbuster wisely picked her spots 7 Jul 2011 Outgoing antitrust chief Christine Varney derailed Nasdaq's designs on the NYSE but let Comcast buy NBC and United and Continental merge. Though hardliners felt betrayed, wobbly unions like Ticketmaster and Live Nation show there are ways to be effective without being too tough.
UK’s periphery resemblance will keep rates low 7 Jul 2011 UK and EU interest rate policies are oddly different. The Bank of England held at levels far lower than Europe's despite the fact that inflation in Britain is a lot higher. The reason is that the UK has things in common with the euro zone's periphery and lags Germany.
Housing reform sinks to Fannie/Freddie mash-up low 7 Jul 2011 Two lawmakers, with industry lobbyists in tow, are heralding a union of Fannie Mae and Freddie Mac with Uncle Sam still in charge. Even more than other proposals floating around, it would preserve the status quo. It only goes to show how weak the political will is for a real fix.
Trichet’s hard shell may hide softer heart 7 Jul 2011 The European Central Bank is raising rates and keeps playing hard ball on Greek debt. But it has dropped a collateral requirement for Portugal and hints that it will take care of dependent banks. It's unlikely it would ever allow a meltdown of the Greek financial system.
News Corp non-execs need to step up 7 Jul 2011 The UK newspaper at the centre of the U.S. media group s crisis is being shut. But the board s work has just begun. Systems, governance, succession and strategy all need reviewing. The nonexecs may feel powerless given Murdoch's grip on the business. If so, why are they there?
BHF buy would signal Kleinwort’s German return 7 Jul 2011 The former Dresdner arm is in talks to buy the 150year old private bank for 500 million euros. A sale would be a relief for Deutsche Bank, which failed to flog the business in the spring. It would also give Kleinwort the scale to match its new wealth management ambitions.
The EU has only itself to blame for ratings mess. 7 Jul 2011 Euro zone luminaries have attacked Moody's for downgrading Portugal to junk. But Europe has wasted many chances to dethrone the agencies and instead chooses to fetishise them. The ECB in its current approach to Greece is a stark example.
Macquarie example offers ring-fencing reassurance 6 Jul 2011 Regulators forced the Australian bank to split its deposittaking arm and brokerdealer into two subsidiaries in 2007. British banks fear that a similar separation will push up their funding costs. Macquarie may not be a perfect model, but it shows a split need not be disastrous.
Murdoch’s UK crisis could bring big indirect costs 6 Jul 2011 The direct costs of the phone hacking scandal at News Corp's UK Sunday tabloid should be manageable for the US media group. Much bigger worries centre on the implications for its bid for BSkyB and the danger that the Murdoch discount on the New York listed shares will widen.
U.S. minimum wage is better politics than policy 6 Jul 2011 When a Republican presidential contender hinted at axing the popular hourly pay support, it looked like a rookie political stumble. But the underlying economics of the argument may stand up. The policy is a classic case of good intentions being overtaken by unintended results.
A year on, Dodd-Frank hides risky distractions 6 Jul 2011 It s de rigueur for U.S. politicians to squeeze unrelated pet issues into legislation. But when financial reform is already complex and the SEC overburdened, writing and complying with disclosure rules on, say, the use of African minerals is likely to be counterproductive.
Temasek’s China bank sale shows shrewd timing 6 Jul 2011 The Singapore fund's sale of $3.6 billion of Chinese bank shares may sound alarm bells. Lenders' bad debts are indeed a worry. But this looks more like an opportunistic attempt to gazump other potential sellers, and pounce on a surge in shortsellers needing to cover their bets.
Infighting won’t change Iran’s economic policy 6 Jul 2011 The sixyear rule of Mahmoud Ahmadinejad has damaged Iran's finances as the potential benefits of high oil prices have been wasted. But the mixed policies of the regime are unlikely to change even if the current power struggle ends with the ousting of the divisive president.
Pipeline prey may now be too pricey for Williams 6 Jul 2011 Investors don't expect Williams to give up the chase for Southern Union. But to trump Energy Transfer's latest $5 bln offer it may end up destroying value for shareholders. With only skimpy synergies on offer, Williams may do better to leave the overpaying to its rival.