Swiss mobile telecoms IPO is likely to shine 28 Jan 2015 Sunrise aims to raise about $2 bln in an upcoming flotation. As No. 2 in a rich market with a benign regulator, the stock offers yield, growth, stability and a decent discount to market leader Swisscom. Just one cloud looms: the outside risk tycoon Xavier Niel causes trouble.
Italy shows Germany the way forward in bank reform 28 Jan 2015 The shake-up of Italian regional banks can be a role model for fixing the notorious Landesbanken. These German state-owned lenders are short of a business model and endanger financial stability. The ECB has the tools to act. But Italy’s will for change is lacking in Germany.
China political investment bubble has new antihero 28 Jan 2015 Newly merged brokerage Shenwan Hongyuan is worth $41 bln – more than Charles Schwab. Its peers trade at triple the valuations of most global securities houses. The mania is part excitement over China’s stock markets, and part misguided belief the state can keep things afloat.
India in depth: Relaxing the budget squeeze 28 Jan 2015 The states of India need a break. They have lived with spending curbs that New Delhi has never accepted for itself. But this has bred angst. The upcoming budget is a chance to boost regional spending even as the federal government cuts back. The rebalancing will spur GDP growth.
Apple shines as Cook dishes up Chinese feast 27 Jan 2015 The tech giant overcame a strong dollar and stiff competition from Samsung in the Middle Kingdom, helping it to record Q1 iPhone sales of 74 mln worldwide. With the company’s watch near market and Apple Pay doing well, CEO Tim Cook has found a recipe to rival Steve Jobs’ success.
Yahoo’s Alibaba spinoff gives Mayer one more year 27 Jan 2015 Offloading the $40 bln stake to shareholders, without a tax hit, is a long-awaited move. It will, however, leave Yahoo’s smaller core exposed, with Mayer’s two-and-a-half-year turnaround not yet bringing sales or profit growth. Luckily she has cover from Alibaba until late 2015.
U.S. deficit danger deferred but not defeated 27 Jan 2015 Congress’s wonks see debt-to-GDP shrinking for a few years as the $500 bln yearly federal shortfall steadies. Baby-boomer retirement and healthcare costs will, sadly, help reverse the trend. Decade-long forecasts are guesses but suggest lawmakers still have hard choices to make.
Motown star faces tough encore in Atlantic City 27 Jan 2015 Fresh off managing Detroit’s $18 bln bankruptcy, Kevyn Orr is New Jersey Governor Christie’s pick to tackle the gambling hub’s reeling casinos and soaring debts. It’s a smaller job, but this time Orr may not have a court to help. Other troubled U.S. cities will be watching closely.
Microsoft’s Satya Nadella needs a better OS 27 Jan 2015 The software giant’s CEO had a simple plan for his first year in charge: don’t repeat predecessor Steve Ballmer’s errors. He has not been that successful, as weak quarterly earnings show. Providing a clear long-term strategy would be more useful than just avoiding past mistakes.
DuPont’s macro woes hand Nelson Peltz advantage 27 Jan 2015 The $67 bln chemical giant is promising more cuts and a bigger buyback to fend off the activist investor. But it’s already barely hitting estimates. A stronger dollar and falling commodity prices will make that even harder in 2015. DuPont boss Ellen Kullman is on the back foot.
Edward Hadas: Markets can prosper with new left 27 Jan 2015 Fringe movements may fuel dangerous populism. But new political parties sometimes offer a healthy response to the intellectual bankruptcy of the established order. Greece’s Syriza government could yet demonstrate how a reworked left can reinvigorate finance and the job market.
New Greek debt deal will mean more brinkmanship 27 Jan 2015 Markets are relaxed that the anti-bailout Syriza government can cut a new deal with creditors. But pressure points lie ahead, with 6.6 bln euros due in the middle of the year. Getting over the hump will need quick progress on tackling Greece’s big, long-term challenges.
ECB, Syriza have broken euro zone’s German spell 27 Jan 2015 The European Central Bank’s easing and the Greek anti-austerity party’s electoral victory show the euro zone is breaking free of German dominance. With loose monetary policy and banking union, it seems ready for growth-friendly policies that don’t ignore economic reality.
Honeymoon really is over for Siemens boss 27 Jan 2015 Lacklustre quarterly results hit shares in Europe’s largest industrial group. After 18 months, CEO Joe Kaeser has not lived up to early hopes. He’s completed some smart disposals. But he’s also overspent on shale and, by centralising power, hobbled unit managers.
Rouble remains without a floor 27 Jan 2015 S&P junked the Russian currency while the EU’s talk of looser sanctions reversed course, prompting another big rouble decline. With inflation rates rising to double digits, capital fleeing and the politics more belligerent, it will be hard to stop the downward spiral.
Monetary mess threatens gains from oil oversupply 27 Jan 2015 Too much production accounts for about half of the oil price slide, by one calculation. The surplus of cheap crude should boost oil-importers’ GDP. But the gains may not materialise, thanks to central banks’ ultra-low interest rates and wobbling anti-deflation credentials.
Li Ka-shing buys way to European telco credibility 27 Jan 2015 The $15 bln move by the Hong Kong tycoon to bulk up in UK mobile through his conglomerate Hutchison Whampoa may be the end of a difficult chapter. Li has struggled to profit from European 3G. By doubling down on the bet, he can build the scale needed to move forwards.
New York mayor gets his snowy Wall Street moment 26 Jan 2015 Bill de Blasio warns the coming blizzard may be the biggest ever, a more reasonable assessment than Goldman claims of 20-plus standard deviation trading events. It’s high time Big Apple politicians stopped ignoring tail risks and generated political capital from them instead.
An $18 bln deal straightens out twisted pipelines 26 Jan 2015 The convoluted structure at Energy Transfer Equity isn’t doing it any favors. Combining two master limited partnerships it controls may generate some savings. More importantly, it makes the company slightly easier for increasingly skeptical oil and gas investors to understand.
Central bankers struggle with expanded toolkit 26 Jan 2015 The pre-crisis belief that monetary policy was no more than the non-political setting of the policy interest rate is long gone. Yellen, Draghi and the others now have six ways to shape the financial system. Their status: done, devalued, discredited, doubtful, daunting and denied.
Pentagon, Davos add more on cyber risks than Obama 26 Jan 2015 The U.S. military knows it has a problem and wants to defend itself better. The World Economic Forum hopes to quantify the dangers for companies. But the White House, while right to talk up the issue, seems more focused on getting information than protecting it.
U.S. $16 bln paper deal requires precise folding 26 Jan 2015 Rock-Tenn and MeadWestvaco shareholders will split their combined company evenly, with a balanced board. Investors are already inking in $300 mln of annual cuts, pushing both stocks up. Mergers that look equal, though, can still provoke business and cultural upheaval.
Greek banks will have to live hand to mouth 26 Jan 2015 After Syriza’s victory comes a long haggle over debt reduction for Athens. While this drags on, liquidity-short Greek banks have to rely on uncertain funding signed off by the ECB. The struggle to survive will delay dealing with another headache: their mountains of bad debt.
BA owner’s new pitch to Aer Lingus is nearly there 26 Jan 2015 British Airways owner IAG lifted its bid proposal by another 6 pct to 1.4 bln euros. It’s still not generous. But given the conditions Ireland is likely to impose, which will limit the value of Heathrow slots, this might be enough for the Irish carrier’s board to start talking.
ECB quest to even out euro credit costs is working 26 Jan 2015 Banking union and the promise of QE closed the gap between borrowing costs in the euro zone’s core and periphery in 2014, data shows. Now bond-buying is here, credit availability in southern Europe should pick up. But recovery requires a recent rally in demand to persist.
Obama’s nuclear gift to Modi is shrewd investment 26 Jan 2015 The U.S. president has unblocked a stalled nuclear power deal with India, allowing Prime Minister Narendra Modi to build new reactors. While that will boost orders for GE-Hitachi and Westinghouse, bigger gains to the U.S. economy will come from ending India’s energy deficit.
Telco IPO a soft test for Thailand’s Teflon market 26 Jan 2015 Shares are continuing to rally even as doubts grow about the economy’s health under army rule. Jasmine’s $1.2 billion offer of infrastructure assets looks a relatively safe bet. Even so, it needs a plump dividend to draw investors to one of Thailand’s biggest listings.
Hugo Dixon: Grexit still unlikely after Syriza win 26 Jan 2015 A resounding election victory for the radical left party has pushed Greece closer to quitting the euro zone. But Syriza should be able to cut a deal with the country’s European creditors to avoid bankruptcy – provided both sides are rational.
More Wall Street CEO cash is hint for shareholders 23 Jan 2015 JPMorgan is paying a portion of Jamie Dimon’s bonus in hard money for the first time since 2011. Goldman is boosting Lloyd Blankfein’s cash. Meanwhile, stock gains are slowing. Bank bosses still get most of their comp in shares. But the switch may suggest equity has less to offer.
Capital One slips on Main Street bank victory lap 23 Jan 2015 A slew of mid-sized lenders like BB&T, U.S. Bancorp and PNC beat fourth-quarter estimates as Wall Street giants faltered. Capital One, though, fell short as loan loss provisions rose. Though small, it’s a sign that an industry slowdown may be more likely than an earnings boom.