Eike Batista’s EBX feijoada gets harder to stomach 1 Jun 2012 The Brazilian billionaire’s latest IPO, of a coal subsidiary, went down badly, with shares tumbling 29 pct. Most of his other listings have done poorly, too, including 50 pct falls for the shipbuilding and logistics arms. Even optimistic investors can’t keep digesting such slop.
Wal-Mart jamboree missing one thing – a vote count 1 Jun 2012 The under-fire mega-retailer pulled out all the stops for its shareholder meeting, inviting Justin Timberlake and Lionel Richie to the party. But its organizational skills don’t extend to the basics, like providing more timely color on the controversial re-election of its board.
Exxon tweaks chemistry to hedge U.S. gas exposure 1 Jun 2012 The energy giant bet heavily on gas with its $31 bln purchase of XTO. With domestic prices still sagging two years on, the company is set to turn some of its gas into more lucrative chemicals for export. Exxon’s new plant may even do rivals a favor by shrinking the glut of gas.
Soft U.S. jobs data test battling economic ideas 1 Jun 2012 With only 69,000 jobs created in May on top of weaker growth than thought, the dismal science is on trial. Keynesian and monetary stimulus theories, for instance, are losing credibility. The winner for now is Reinhart and Rogoff’s thesis that excessive debt stunts growth.
Fake exclusive: Zuckerberg memo to Facebook staff 1 Jun 2012 The social network’s CEO will soon return from an Italian honeymoon to find his troops coping with the busted IPO. His message to them should be humble, yet ambitious: ignore the market, focus on the job and deliver. Breakingviews pens a first draft using Zuckerberg’s own words.
Oil’s fall below $100 won’t make economy rise 1 Jun 2012 The 18 percent decline in the price of crude in May shows that when fear rises to hysterical levels even easy money cannot support all asset prices. In theory, cheaper oil should stimulate importers’ economies. In practice, the benefits will be lost in the financial morass.
Generali coup risks one more reason to sell Italy 1 Jun 2012 Shareholders, led by Mediobanca, are seeking to oust the boss of the country’s largest financial institution. Italy could do with a dose of shareholder activism, but this coup may do little to dispel its reputation for intrigue, hardly good for a country in crisis.
Carlos Slim may drive KPN to poison 1 Jun 2012 The Dutch telecoms group is scrambling to dodge what it sees as a takeover-on-the-cheap from the world’s richest man. It seems to want to do a deal in Germany that’s been talked about for years. But counterpart Telefonica isn’t ready to trade. KPN might resort to poisoned pills.
Review: Nations fail when people can’t hope 1 Jun 2012 Daron Acemoglu and James Robinson have found a single explanation for the great economic questions of what makes some nations wealthy and others poor. Not geography or culture, they argue, but “inclusive” institutions lead to prosperity and peace. It’s the politics, stupid.
BP’s Russian exit would lead to existential limbo 1 Jun 2012 The UK oil major could turn grief into $20-$30 bln of cash if a deal materialises from the approaches for its half of the TNK-BP joint venture. But BP would then need to find new growth assets. And that could mean other difficult partners in challenging jurisdictions.
Market moves point to grown-up asset allocation 1 Jun 2012 Yields on safe bonds are down and equities aren’t suffering too badly. That split makes no sense in a binary world where risk is either off or on. But it may be a sign of investors’ maturity. Asset allocations should reflect a range of investment dangers, and opportunities.
Glitzy F1 falls behind steady palm oil in IPO race 1 Jun 2012 Like Facebook and Graff Diamonds, the race operator hoped a flashy name would lure in investors. Formula One decided to wait for better times, but Malaysia’s palm oil giant Felda is pushing ahead with a $3 billion offering. In a gloomy market, solid assets are still appealing.
Strands of euro crisis are hard to disentangle 1 Jun 2012 There are four major issues: slow growth, weak national governments, inadequate regional solidarity and defective investor psychology. Each one could probably be dealt with, but the combination increasingly looks toxic. Right now, the greatest need is market tranquilisers.
Why Spain is under siege 1 Jun 2012 Spanish elites seem to be shocked that the country has been pushed to the brink. But laying the blame on ignorant investors, evil foreign media and the euro zone’s political paralysis won’t help. And the lack of credibility of successive governments has been a real problem.