M&A optimism over Merck KGaA is about to be tested 3 Mar 2015 The chemical and drugmaker has become one of Germany’s hottest stocks, gaining 55 pct in a year. Solid revenue growth and a dividend hike for 2014 underscore the renewal. To keep investors onside, Merck must now smoothly integrate a $17 bln takeover, the biggest in its history.
Alibaba’s split nationalities invite trouble 3 Mar 2015 Taiwan wants to boot the e-commerce group out for not declaring itself Chinese. Yet Alibaba’s home changes depending on who asks. China’s taxman sees Hong Kong, licensing bodies see China, and investors see the Cayman Islands. The confusion may encourage regulatory meddling.
HK property shows limits of new central bank tools 3 Mar 2015 Regulators in the former colony have spent five years tightening mortgage controls, but real estate prices are still rising. It’s a reminder not to expect too much from “macro-prudential” policies. Authorities can stop banks from lending too much. Deflating a bubble is trickier.
India’s $13bln spectrum auction has room for upset 3 Mar 2015 The top mobile operators are limbering up to renew licences that support as much as 70 pct of their revenues. The worry is that rivals or new entrants such as Reliance Jio may bid aggressively for additional bandwidth. An expensive auction will weigh on balance sheets.
Brazil water crisis heats up climate tail risks 2 Mar 2015 Sao Paulo’s drought stems from statistical hubris similar to the Wall Street models that failed to predict the 2008 financial crash. Decisions to prop up banks and markets had near immediate effect, though. Climate-related black swans are likely to prove more pernicious.
John Browne’s Russian truce points to oil M&A boom 2 Mar 2015 The former BP boss will head L1, a $10 bln energy fund owned by oligarch Mikhail Fridman. The duo once sparred over BP’s assets east of the Urals. Their alliance today highlights the deal opportunities created by oil’s rout - even if L1’s Russian roots are a problem.
$15 bln tech M&A spree poor fix to limp sales 2 Mar 2015 Chipmaker NXP and networking gear firm HP need strong demand to compensate for falling prices. Trouble is, that has not happened. Buying Freescale and Aruba will help cut costs, build scale and fill in niches. But neither deal turns tech hardware into a growth market.
Tech drive strips old-school carmakers of clout 2 Mar 2015 Apple is the latest to take an interest. From Tesla to Google, the shift to connected, self-driving vehicles may take a while, but it could shake up everything from systems to materials to car usage. The winners may be able to rev up returns far higher than current performance.
French telco buyout shows dealmaker in a hurry 2 Mar 2015 Vivendi is selling its residual 20 pct in Numericable-SFR to the mobile operator itself and parent Altice for 3.9 bln euros. This helps Altice’s billionaire boss Patrick Drahi prepare for a follow-on deal with Bouygues. It’s harder to see why Vivendi would accept a big markdown.
Austria finds apt target for landmark bank bail-in 2 Mar 2015 Vienna is to hit creditors in the remnants of Hypo Alpe Adria, after finding a capital hole of up to 7.6 bln euros. Unlike the recent bail-in of Portugal’s BES, senior bondholders get haircut too. EU reforms to protect taxpayers from banks are being used on deserving candidates.
Greece’s U-turns have only just begun 2 Mar 2015 Last week the new government asked for an extension of the old bailout programme, despite pledging to rip it up. If Greece is to avoid going bust, it will have to make three more somersaults in coming months. The faster it does them the better.
Edward Hadas: UK voters deserve some dreamers 2 Mar 2015 The runup to May’s poll should be open season for attacking conventional wisdom and promoting radical agendas. But the pamphlets emerging from the fringe are strangely tame. Outsiders are wasting their licence to operate beyond the rules of pragmatism.
India’s infrastructure push could be envy of West 2 Mar 2015 The government has pushed back its deficit reduction target in order to boost spending on roads, rail and power. New Delhi is now unmistakably pursuing a public investment-led growth strategy. It’s an opportunity that rich nations, which can borrow far more cheaply, are missing.
China rate cut shows back-to-front monetary policy 2 Mar 2015 The clip to borrowing costs won’t much change life for credit addicts or for savers. The central bank’s move is little more than a signal from on high that planners are up with events. When it comes to managing the Chinese economy, official interest rates play a limited role.
Buffett highlights the paradoxes of being Warren 2 Mar 2015 The sage of Omaha packed yet more folksy wisdom into his shareholder letter marking 50 years atop Berkshire Hathaway. He also revealed some ironies ranging from how his firm works, to corporate governance, to Wall Street’s usefulness. Success, it seems, requires contradictions.