Quotas for women directors are the way forward 5 Sep 2012 The EU is mulling a 40 pct mandatory quota for female directors. Success will depend on getting the regulation right. Tough sanctions are needed to force compliance, but the rules should articulate a longer-term plan. Hopefully mere threats will be enough to modify behaviour.
U.S. debt relief for Egypt is mostly politics 5 Sep 2012 Obama’s decision to write off $1 bln owed to the U.S. by Egypt will help to keep the country on the safe side of American politics in the region more than it will help the country’s troubled economy. A bigger boost would be to redirect military aid to more productive investment.
Pandora could be a Facebook friend with benefits 4 Sep 2012 The $2 bln internet radio service revealed steady strides in mobile advertising, which accounted for over half its revenue last quarter. Facebook, meanwhile, delivered fewer ads to users socializing by phone. That makes Pandora look an enticing, if pricey, companion to target.
Open courts healthy for Delaware and dealmakers 4 Sep 2012 A U.S. judge said the state’s jurists can’t arbitrate disputes in secret. That may disappoint shy companies, but it ensures the Fortune 500’s preferred legal forum remains accountable. The M&A world can also depend on continued access to helpful - and sometimes witty - rulings.
Sun Myung Moon was a sort of business success 4 Sep 2012 True, his Unification Church’s commercial operations made large losses and ran up huge debts. But even with weak operating management, the church’s knack for religious services was outstanding. Moon’s followers provided more than enough donations to repeatedly bail out disasters.
Nomura rejig signals break with post-Lehman era 4 Sep 2012 Top dealmaker William Vereker is giving up his executive role at the investment bank, and may leave. It’s another sign that global ambitions have been reined in by commercial reality. Now Nomura must explain how its new strategy will serve shareholders better.
Is Lazard too well connected for its own good? 4 Sep 2012 The French branch of the bank is in hot water for getting a government contract from the finance ministry after its chief loudly supported the socialist government and hired an economics minister’s partner at one of his newspapers. Lazard may have got the mandate anyway.
Oil spike doesn’t require emergency response 4 Sep 2012 Brent crude is up 30 pct since June, with WTI close behind. That’s sparked talk of rich countries tapping emergency oil reserves. The panic is premature. Short-term pressures are pushing crude higher. As these fade, so should the threat of a sustained, economy-wrecking oil price.
Three-edged blade sharpens case for carve-ups 4 Sep 2012 In a 48-hour span, shares in U.S. government contractor SAIC got a lift from a decision to split the company; DuPont unloaded a slow-growing unit for a good price; and a new study found value creation from divestitures. The fresh evidence should grab the attention of more boards.
Iron ore crash reveals flawed boom-time economics 4 Sep 2012 The steel ingredient’s sharp fall from $150 to $90 a tonne defies cold economic logic. But then again, a market that had been preternaturally hot wasn’t likely to behave rationally. For Australia’s Fortescue and other highly leveraged miners, the lesson is painful.
Valeant deal shows how big M&A can add value 4 Sep 2012 Large acquisitions usually merit skepticism. Valeant’s $2.6 bln deal for Medicis looks an exception. The Canadian-U.S. drug maker is paying a $700 mln-plus premium for its rival, but cost cuts could be worth more than twice that. And the fit is good. No wonder both stocks surged.
Investors need steel to endure next market phase 4 Sep 2012 Global equities had a good summer. Many indexes are ahead 10 percent since early June. Optimism has also showed in shifting bond yields. The world still has serious problems, and near-term reversals are possible. But asset allocators should hold their nerve.
Mongolia swells anti-China M&A tide 4 Sep 2012 Chinese state miner Chalco pulled a bid for Mongolia’s SouthGobi after clear signs Chinese government-backed firms aren’t welcome. Such protectionism is mostly muddle-headed, but increasingly accepted. Bigger deals, like CNOOC’s $15 billion bid for Canada’s Nexen, aren’t immune.
Deutsche Bank must not fluff lines on pay reform 4 Sep 2012 The German lender has said its September strategy day will address absolute levels of banker remuneration. Deutsche will have to balance the need to deliver on its promise with the danger of sparking an exodus to peers. But it can afford to err on the side of adventure.
Urban real estate may not be such a safe haven 4 Sep 2012 Investors seeking refuge from economic turmoil are snapping up prime real estate in cities like London and Hong Kong. The flight to safety crowds out local inhabitants. In the absence of a correction, cities may be forced to become less welcoming to foreign buyers.
Financial regulation heading in wrong direction 3 Sep 2012 The Bank of England’s Andy Haldane points out that more and more detailed regulation hasn’t made the financial system safer. But reversing direction is hard, and might not be enough. What is really necessary is a simple and shared vision for financiers and regulators.
UK needs austerity plus vision, not a Heathrow bodge 3 Sep 2012 The critics are right. The British government needs more than austerity. Growth may benefit a bit from a smoother planning regime, a small business bank, and fresh infrastructure backing. But broader vision is required. A Heathrow extension as a growth fix isn’t that.
Founder’s veto backfires in botched M&A operation 3 Sep 2012 Regulators, politicians, your own wary investors: so many people can nix a big deal. Fresenius’s failed $4 bln bid for a rival German health group shows another risk. High approval hurdles can empower an awkward squad with smallish stakes in the target. Glencore must sympathise.
Spanish mortgage bottom-fishing only for the brave 3 Sep 2012 Investors hope for juicy yields buying beaten-up covered bonds secured on Spanish mortgages. Losses would need to reach apocalyptic levels for investors to suffer. But no one can really tell what would happen in a covered bond default.
Spain’s hasty DIY Bankia recap smells fishy 3 Sep 2012 The Spanish bank is being bailed out after losing 4.4 bln euros in the first half of 2012. Yet Madrid is recapitalising Bankia itself instead of using euro zone cash. EU political maneuvering may explain why. But it could also be an attempt to avoid hitting Bankia’s creditors.
Clean break could give China reformists hope 3 Sep 2012 Outgoing President Hu Jintao may cut his direct links to the top when new leaders come in early next year, unlike his predecessor Jiang Zemin. That might make it easier for the incomers to make their mark, and push through reforms with less distraction from factional fighting.
Hon Hai cash not enough to restore Sharp’s edge 3 Sep 2012 The Taiwan company’s boss left Japan without a new deal for the 9.9 percent stake in Sharp he proposed buying in March. Sharp only has cash to last about six months. Without an overhaul or sale of its LCD and solar businesses, the electronics maker may struggle to stay afloat.
India sensibly considers foreign tax U-turn 3 Sep 2012 With the economy in the doldrums and a reform agenda threatened by political gridlock, the government should rush to accept an expert panel’s recommendation of a U-turn on tax proposals. That helps with the route in; next is to help returns by speeding up the economy.
Egypt’s banks are ripe for picking 3 Sep 2012 Qatar National Bank is in talks to buy Societe Generale’s Egyptian unit. With the economy stabilising, more banks could change hands as capital-hungry European owners look to exit. And post-revolution prices look attractive even with the prospect of a limited pound devaluation.
Pakistani economy is much stronger than the state 3 Sep 2012 It’s all too easy to write off Pakistan: scary security situation, the government and the judiciary at each other’s throats and U.S. drones pounding tribal areas. But the economy is not a wasteland. Consumption is strong and a saner energy policy can revive investments.