LinkedIn shareholders not endorsing lower growth 30 Apr 2015 The social network for jobseekers lost over $7 bln in value after it said 2015 revenue and earnings would be lower than expected. Investors assumed its niche assured fast and steady expansion, allowing them to rationalize a nose-bleed valuation. Reality is biting.
Rob Cox: Bitcoin enters age of Goldman and lawyers 30 Apr 2015 For libertarian early adopters, the discovery of the cryptocurrency by Wall Street’s top firm and a bevy of legal eagles is a pivotal moment. Diehards will mourn the lost privacy and edginess of bitcoin. The flipside is the prospect of mainstream financial industry acceptance.
Bombardier may be the little Canadian that can 30 Apr 2015 The manufacturer is mulling selling a majority stake in its rail unit to a Chinese rival. Political objections are likely: even home-improvement chains are off limits to foreigners. Using the proceeds to keep its aviation business flying, though, may keep critics in the hangar.
Market shakeout too incoherent to mark trends’ end 30 Apr 2015 The dollar has stopped rising, German bond yields have stopped falling and both are now flouting consensus expectations. Economic data can’t fully explain the sharp moves. The unwinding of traders’ positions can. But that is not a good enough reason to give up on big trends.
Nokia could end up paying more for Alcatel 30 Apr 2015 A weak quarter in wireless network equipment has disappointed investors in both Ericsson and now Nokia. If Alcatel holds up better, the case for Nokia buying this broader business will look stronger. So will the argument, already pushed by Odey, for giving Alcatel owners more.
Exxon and Conoco show different Big Oil strengths 30 Apr 2015 The industry leader’s Q1 profit fell less than feared as refining offset low oil prices, echoing results at Shell and BP. ConocoPhillips shed downstream assets in 2012, but its scale and falling costs helped steady the outlook. The giants’ flexibility is, well, paying dividends.
Downstream cushions Shell while it waits for BG 30 Apr 2015 Like BP and Total, profit from refining and marketing limited pain from low oil prices for the Anglo-Dutch major. Short term, it will struggle. But there is value to be had from the $70 billion tie-up with BG. The deal synergies could well be higher than advertised.
Market could push BNP to lift capital ratios 30 Apr 2015 France’s biggest bank outdid forecasts with a 17.5 pct rise in first-quarter net profit to 1.6 bln euros. Yet BNP Paribas failed to grow its capital ratios. French banks aren’t yet under regulatory pressure. But with peers stronger, investors may require higher levels.
Renzi’s Italian gamble is worth taking 30 Apr 2015 Premier Matteo Renzi is using confidence votes to ram though electoral reform. He risks a government collapse, and has nearly torn his own party apart. Yet the law should reshape Italian politics for the better - and help the economy.
Britain’s Tories take prize for fiscal folly 30 Apr 2015 The big parties’ electoral manifestos all contain ill-advised pledges that look dubiously costed. Given they aim to cut the deficit more, the Conservatives’ silence on how to do so is more striking. Promising to freeze taxes in the next parliament is the silliest ruse yet.
Banks are designated drivers at China market party 30 Apr 2015 Bad debt levels are rising and earnings at the biggest lenders barely grew in the first quarter. Soon, they may be summoned to help clean up government debts, fund China’s global ambitions and sacrifice their margins to save the economy. Investors’ sober view is the right one.
Abu Dhabi’s $2.4bln hotel JV shows HK is still hot 30 Apr 2015 Tycoon Cheng Yu-tung’s offspring are shaking up property group New World Development. The sale of three top hotels to a joint venture with the Gulf sovereign fund shows that, despite falling visitor numbers and the slowdown in China, Hong Kong is still an attractive destination.
Insider case exposes U.S.-China conduct chasm 30 Apr 2015 Regulators froze the assets of two Beijing residents who made $2 mln trading ahead of a deal involving Nasdaq-listed 58.com. Such apparently basic scams are fairly rare in the United States. From insider trading to bribery, American rules and Chinese practice continue to clash.
Salesforce’s slow growth may prompt hunt for buyer 29 Apr 2015 The $47 bln software outfit is said to be on the market. Oracle and Microsoft want to beef up cloud capacity, making them possible suitors. Founder Marc Benioff has been offloading shares, and persistent losses and disappointing revenue could tempt him to hawk the whole thing.
Sergio Marchionne a man on someone else’s mission 29 Apr 2015 Fiat Chrysler’s boss sounded like an activist investor in making a solid case for car industry consolidation while haranguing analysts. Yet his bizarre plea for help with mass mergers sent the company’s shares down 5 pct. That kind of backfire smacks more of ex-VW chair Ferdinand Piech.
U.S. watchdog’s tame CEO pay rules may chomp back 29 Apr 2015 The Securities and Exchange Commission wants investors to see how a company’s stock returns compare with its bosses’ earnings. Transparency is fine, but net income or revenue would be more telling than volatile share prices. The SEC plan might even drive C-suite salaries higher.
Blah U.S. growth nearly guarantees Fed rate delay 29 Apr 2015 It’s bad enough that the economy barely grew in the first quarter of 2015. But these GDP figures may be particularly persuasive for leaving interest rates alone given the dollar’s strength. Unless other factors can offset that headwind, it’s hard to see the Fed changing course.
Spanish bank recovery has sting in the tail 29 Apr 2015 Better GDP prospects, cheaper funding and lower provisions for bad loans are helping Spain’s lenders. Banks have reported sharp increases in profits in the first quarter of 2015. But pressure on net interest margins will create headwinds later this year.
M&A predators stalk Michael Milken’s ball 29 Apr 2015 The financial elite prowling Beverly Hills at the behest of the former Drexel Burnham boss worried about everything from China to cybersecurity to stock valuations. Three former Treasury chiefs lamented a lame Washington. When it came to deals, however, animal spirits ran wild.
Cockroaches scuttle out from Lumber Liquidators 29 Apr 2015 The flooring retailer says the U.S. government will seek criminal charges for importing illegally sourced wood, its chief financial officer is leaving and preliminary tests showed high levels of formaldehyde in its products. More nasty surprises may lurk beneath the floorboards.
Edward Hadas: UK housing and the fear of greatness 29 Apr 2015 London urgently needs to be rebuilt and expanded, but none of the leading candidates in the upcoming election promises to do much about the problem. This, like costly U.S. healthcare and high European unemployment, is a rich democracy inertia trap. Affluence retards boldness.
Barclays cost restraint adds to heat on Deutsche 29 Apr 2015 The UK bank’s hefty first-quarter provision implies it may be hit with an FX fine of as much as $3 bln. And ring-fencing costs remain an unknown quantity. But Barclays is making progress on expenses, and its targeted returns look higher than those of main rival Deutsche Bank.
Ready-reckoning the markets post-UK election 29 Apr 2015 Next week’s British general election is unlikely to produce a clear winner. But a government will eventually be formed, even if it takes a second vote. Different medium-term trends will emerge after the inevitable short-run volatility in sterling, gilts and UK-listed stocks.
Well-oiled performance shows VW on right track 29 Apr 2015 Volkswagen had a better-than-expected first quarter. Operating profit rose 16 pct to 3.3 bln euros. Trading woes cannot explain the boardroom battle launched and lost by ex-Chairman Ferdinand Piech. If VW modernises its governance and keeps delivering cost cuts, shares may motor.
Serial dealmaker makes smart truck stop in France 29 Apr 2015 Bradley Jacobs’ XPO is paying an undemanding 3.2 bln euros with debt for French trucking firm Norbert Dentressangle. The U.S. buyer’s timing is good: the euro is weak while France is increasingly open to deals. And the capital markets could hardly be better for M&A machines.
Abe’s Capitol Hill speech needs ideas for backyard 29 Apr 2015 Shinzo Abe’s address to Congress will highlight Japan’s strategic and financial relationship with the United States. But the mooted trade deal offers limited economic benefits. Managing the rivalry with China and fostering cordiality with India can make Japan a more vital ally.
Focus Media’s Chinese homecoming is hard to repeat 29 Apr 2015 The advertising firm is preparing to list in Shanghai two years after it left the U.S. stock market. High valuations will tempt other Chinese companies with overseas listings to return home. For many, though, the costs and legal complexities make switching more hope than reality.
Twitter may reap unexpected gain from Tweeted leak 28 Apr 2015 The microblogging service had trading in its stock halted after data miner Selerity found and released its earnings early – on Twitter. The company forecast awful sales, and looked chaotic as its shares plunged. The upside may be that users decide Twitter offers investing edge.
U.S. Congress is in danger of looking functional 28 Apr 2015 First, it renewed the federal terrorism insurance program. Then it permanently fixed a long-running Medicare problem. Now it may even hand the president broad power to ink trade deals. Maybe this year’s debt limit fight won’t happen – even if big reforms remain out of reach.
No harm, no foul deserves courtroom kudos 28 Apr 2015 The U.S. Supreme Court will consider whether search website Spokeo can be sued for making someone look too good. Posting the false data online may have breached a federal statute, but it’s hard to argue anyone was hurt. That’s reason enough to toss the case and others like it.