Fosun global ambition clashes with market reality 3 Sep 2015 The Chinese conglomerate’s bid for private bank BHF Kleinwort Benson comes with alluring logic and a reasonable premium. That might not be enough. Weak markets in China, and an apparent belief that Fosun will offer more, are pulling in opposite and unhelpful directions.
Russia has levers to cope with oil squeeze 3 Sep 2015 A low oil price will dent growth and public revenues, and Russia needs rebalancing. Yet President Vladimir Putin can hold the line by drawing on reserves and even inflating regional deficits, while the rouble’s fall helps competitiveness. That could enable a fragile equilibrium.
Higher dividend is easyJet’s next destination 3 Sep 2015 The British no-frills carrier has upped its 2015 guidance significantly, sending shares up 6 pct. With earnings per share poised to rise by a fifth, it can easily afford topping up shareholder payouts. But future growth plans limit the scope of another 2013-like special dividend.
Deepening economic ties belie China-Japan tension 3 Sep 2015 Seventy years after World War Two, relations between Asia’s two biggest economies are in poor shape – as Beijing’s huge military parade shows. But trade, investment and tourism tell a different story. Japan’s economic success increasingly depends on China’s, and vice versa.
Why oil investors are so behind the curve 2 Sep 2015 Investors used to assume that the cost of pulling oil out of the ground was relatively static – or changed slowly. Reality is slipperier. Rethinking the way the “cost curve” works may help explain recent gyrations in oil and other commodity markets.
Buyout barons like the sound of a blank check 2 Sep 2015 David Bonderman’s TPG and Alec Gores’ eponymous firm are the latest to jump on the shell-company bandwagon. A cutthroat M&A scene and the success enjoyed by the likes of Martin Franklin have amplified the siren call. Not all acquisition nous is necessarily the same, however.
VW steers towards needed boardroom harmony 2 Sep 2015 Volkswagen is extending CEO Martin Winterkorn’s term to 2018, ruling him out as next chairman. This leaves room for an independent, external candidate to replace fallen patriarch Ferdinand Piech. VW’s flawed governance might then shift up a gear.
LVMH’s bite out of Apple is digital coming-of-age 2 Sep 2015 The French luxury group has poached a top Apple music executive to head its online operations. It’s a significant move in a sector that has been wary of the net. It also cranks up the heat on the sector’s e-commerce leader Burberry and recently merged Yoox/Net-a-Porter.
Novo Banco has issues – Chinese owner or not 2 Sep 2015 Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills.
India beats timely retreat from fiscal tyranny 2 Sep 2015 The finance minister has retracted a flawed plan to tax foreign fund managers’ past earnings. Jittery global markets may have hastened the truce. Settling similar disputes with Vodafone and Cairn would show the government is belatedly keeping its promise to end “tax terrorism”.
China woes add force to secular stagnation debate 2 Sep 2015 A spike in U.S. real interest rates, triggered by a tiny yuan devaluation, roiled world markets. Even so, 20-year bond yields are still just 1 pct above inflation. If even this is too much for borrowers, the idea the global economy is running out of steam gains more credence.
Hedge fund wobbles hand ammunition to fee fighters 1 Sep 2015 Big names from Greenlight to Pershing to Third Point have taken a pounding from recent market turmoil. It’s just a month’s bad performance. But if high-priced managers can’t provide a hedge to regular investments, it lends extra weight to Calpers and others who are ditching them.
Netflix places $5 bln bet on exclusivity 1 Sep 2015 The online video company is ditching content provider Epix. That’s bad news for armchair watchers of big movies like “Hunger Games.” Instead, Netflix is upping its spending on shows no one else has. As Apple, Amazon and others join the streaming wars, it’s a smart move.
Migration crisis echoes age-old test of finance 1 Sep 2015 The flow of desperate people to Europe has a financial-world parallel. For companies, high returns attract new entrants who threaten incumbents’ comfortable state. The options for EU leaders are similar too: shut out competition, or find new, better ways to create profit.
Poland makes bank investors political playthings 1 Sep 2015 Warsaw could force lenders to cough up $5.9 bln to relieve borrowers with Swiss franc mortgages not obviously in distress. With elections looming, the party ahead in the polls wants to tax banks’ balance sheets. It may be pure politics, but the danger is that foreign money flees.
Electra’s 1 bln stg caravan deal gives it a break 1 Sep 2015 The UK private equity fund is merging its Park Resorts caravan business with Parkdean, a rival. The terms suggest it has more than doubled its money in around three years. That will help Electra if Sherborne, its uppity 29 percent shareholder, raises new complaints.
Focus Media relisting defies China’s market rout 1 Sep 2015 The advertising group is trying to list again in Shenzhen after a previous attempt in June fell through. But despite the stock market slump, Focus Media’s $7.2 bln valuation is unchanged. Other U.S.-listed companies eyeing a return to the mainland may need to be more realistic.
Taiwan chipmaker’s woes mirror economic challenge 1 Sep 2015 TSMC faces tepid global demand and a slowdown in China, the world’s largest smartphone market. The $100 billion group is also losing market share to rival Samsung. The problems facing Taiwan’s largest company are shared by the island’s tech- and export-dependent economy.