Why China’s graft probes don’t rattle investors 3 Nov 2015 Corruption scandals would hammer shares in Western firms. Not so for those caught in China’s crackdown like Dongfeng and AgBank. That’s because the campaign is so sweeping, and targets people rather than companies. Besides, the whole market already suffers an integrity discount.
HSBC’s slow road to China securities could pay off 3 Nov 2015 The lender is setting up a mainland joint venture more than a decade after its first rivals. Foreign investment banks have struggled to make inroads in the People’s Republic. Unusually, however, HSBC will have majority control. That could more than make up for its slow start.
Indian telco M&A calls for closer Ambani ties 3 Nov 2015 Anil Ambani’s Reliance Communications is buying the Indian unit of Sistema, giving the country’s fourth mobile operator extra spectrum. That makes indebted RCom a more attractive partner for an upstart led by brother Mukesh. A deeper alliance would seal the siblings’ truce.
Halliburton’s Baker Hughes bid looks less refined 2 Nov 2015 The gap between the offer and market prices is a yawning 15.4 pct, implying there are serious doubts about the $27 bln oil services merger. Aussie trustbusters have raised fresh concerns. A blocked deal would cost Halliburton $3.5 bln, nearly triple this year’s expected profit.
Wall Street has its 2016 White House empty vessel 2 Nov 2015 U.S. presidential hopeful Marco Rubio’s tax-cut ideas have broad appeal, but his math is off. Hedgie and Republican Party donor Paul Singer, though, has just offered his support. That means he and other finance-industry backers may soon fill in Rubio’s hollow economic policies.
Shire pays up for easier prey than Baxalta 2 Nov 2015 The UK pharma group is offering $6 bln for rare-disease drugmaker Dyax while biding its time for an eventual swoop on Baxalta. The deal relies on bold assumptions and could take years to pay off. Shire is good at M&A, but a weak share price shows market support can’t be assumed.
Visa picks a tough time for $23 bln Europe deal 2 Nov 2015 The U.S. payments network is using an earnout, buybacks and other maneuvers to soften the blow of paying 61 times pre-tax earnings for its overseas cousin. It’s a crafty solution but the integration will take a while and distract management just as industry competition heats up.
Merger Monday has a scary Halloween afterglow 2 Nov 2015 At least six corporate buyers unmasked acquisitions of $1 bln or more to sustain the freakish pace of M&A. Some of them, including Visa’s, are tricky, while others like Shire’s treat sellers to rich prices. The zombie-like deal march is causing investors to take fright.
Saudi banks can help to plug oily black hole 2 Nov 2015 A ratings downgrade for Saudi Arabia reflects the impact of falling oil prices, but the kingdom has economic levers it can still pull. Lenders are highly liquid, with room to fund a widening budget deficit. And if push comes to shove, Saudi can even sell bank stakes to outsiders.
Amundi sets IPO price range with a Gallic shrug 2 Nov 2015 The French asset manager’s 8 billion euro offering suggests a valuation of about 13 times forward earnings, a discount to rival Schroder’s. A nod to the lower end of the range might be most comfortable. Owner Credit Agricole won’t care much either way.
Cleaner and leaner HSBC struggles to grow 2 Nov 2015 The absence of big fines in the third quarter suggests the global bank’s compliance drive is paying off. Other costs are down, and bad debts under control. However, market turmoil dragged on revenue. A share price recovery will depend on HSBC showing sustained expansion in Asia.
Greek banks get marginally more investable 2 Nov 2015 ECB stress tests revealed a 14 bln euro capital hole. The tests were doubly tough: the pass mark was high, and the state will not prevent shareholder dilution. Yet banks are stuck with bad loans and the economic outlook is unclear. Greek bank equity is still a bet for the brave.
Dixon: Tsipras’ biggest stress tests yet to come 2 Nov 2015 A central bank verdict that the top Greek lenders must raise only 14.4 billion euros is welcome news for the prime minister. But he has to implement more tough measures before he can secure debt relief from his euro zone creditors. Until then, he faces political risks.
Commerzbank boss departs with job only half done 2 Nov 2015 Martin Blessing is leaving the German bank. The CEO has de-risked the lender and paid back most of its crisis-era state aid. Less happily, Commerz’s costs and returns are still not up to scratch. A share price jump shows investors welcome the scope for fresh ideas.
HTC needs breathing space for revival 2 Nov 2015 At $2 bln, the Taiwanese handset maker is worth little more than its dwindling cashpile. The founder rules out a sale. So HTC needs to buy time by raising funds, perhaps by selling a stake. Even then, new smartphones and a push into virtual reality both look like long shots.
China index: Slowing down on the home front 2 Nov 2015 The old growth engines are running out of steam. Rail freight and steel production dropped in September, while investments in new property fell for a second consecutive month, a first in our data set. It’s a stark reminder that times have changed.