Viacom movie-studio stake sale is only the trailer 23 Feb 2016 CEO Philippe Dauman may sell a minority of Paramount Pictures. It’s a first step for the $15 bln media conglomerate that is under pressure from shareholders unhappy with Dauman’s leadership and Sumner Redstone’s control. Investors will clamor for a much bigger-budget revamp.
Cox: Let the Chinese buy Chicago’s stock exchange 23 Feb 2016 Congress is up in arms about an obscure Chongqing group swallowing the old but tiny Midwest bourse. It’s an outcry that badly misses the point. The deal will force the new owners to learn a thing or two about disclosure, robust regulation and the benefits of free capital markets.
LSE and Deutsche Boerse union faces uphill battle 23 Feb 2016 The UK and German stock exchanges are in detailed discussions to merge. Market and regulatory shifts make doing so logical. But this deal will probably raise both financial stability and competition concerns – and encounter the complication of coinciding with a possible Brexit.
Forget Bloomberg: Boris Johnson for U.S. president 23 Feb 2016 London’s maverick mayor, now openly opposed to UK Prime Minister David Cameron on Europe, hasn’t yet given up his American citizenship. In an imaginary world where Johnson has been exiled, here’s how he might campaign for the White House against Trump, Clinton, Bloomberg et al.
Deutsche bondholders send tepid vote of confidence 23 Feb 2016 The bank had to buy back less than half the 3 bln euros of debt on offer, making a tidy profit as most investors stood pat. That may allay fears of a market panic, but wide credit spreads suggest the lender is still considered risky. Its return to health is a work in progress.
Time plus Yahoo conjures ghoulish AOL past 23 Feb 2016 Merging the $1.5 bln magazine publisher with the troubled $30 bln internet company’s core would be much like a smaller version of the epically bad Time Warner deal. Combining print and digital might make more sense now than in 2000. The financial contortions it would take don’t.
Light at end of StanChart’s tunnel grows dimmer 23 Feb 2016 New Chief Executive Bill Winters’ restructuring plan dragged the lender to its first full-year loss in 26 years. Slowing emerging markets and lower interest rates aren’t helping. Even a modest 10 percent return on equity target for 2020 looks far from certain.
VW car buyback would speed emissions-scandal exit 23 Feb 2016 After five months, the German automaker hasn’t shown U.S. watchdogs that its diesel vehicles can meet environmental standards. Purchasing the worst clunkers might limit legal exposure, appease regulators and help end the fiasco. The hefty $5 bln cost could be money well spent.
InterContinental’s slowdown could book in a merger 23 Feb 2016 The hotels group’s revenue per available room grew less quickly in the fourth quarter. The takeover of Starwood Hotels by Marriott International has raised expectations for more industry tie-ups. But InterContinental’s $1.5 bln special dividend implies it won’t be a predator.
BHP admits dividend pledges and mining don’t mix 23 Feb 2016 The world’s largest miner slashed its interim dividend 74 pct and followed rival Rio in scrapping a “progressive” policy. About time. Promising payouts will only ever go up is daft in such a cyclical sector. Consistency matters less than safeguarding the balance sheet.
Honeywell could snare UTC with Dow-DuPont formula 23 Feb 2016 A $160 bln merger of the aerospace conglomerates would be an antitrust mess. But like the chemical giants last year, their similar size, complementary units and overlapping shareholders may offer a solution: tax breaks to entice UTC and spin-offs to appease regulators.
Unusual truce holds water in Aussie ports fracas 23 Feb 2016 Rival bidders Brookfield and Qube are mulling a joint $6.5 bln breakup of Asciano, the rail and container-terminals operator. It’s rare for M&A adversaries to make peace. But an armistice would sidestep competition and funding problems while ensuring no-one is left empty-handed.
Apple may test speech recognition of legal kind 22 Feb 2016 The tech giant’s refusal to help unlock a shooter’s iPhone raises tough issues. U.S. national security, a 225-year-old law and attack-survivors’ voices may force CEO Tim Cook’s hand, but his privacy points are strong. A novel free-speech argument could give the company an edge.
Alphabet sinks further into antitrust quagmire 22 Feb 2016 The European Commission may beef up its anti-competitive complaint against Google. U.S. authorities are probing the search giant, too. Proving abuses will be difficult, but the expanding scope means the company will have to expend more energy to pull itself out of the bog.
U.S. to kick foreign banks while they’re down 22 Feb 2016 European lenders, already clobbered by investors, face more pain from American watchdogs. New rules require the ring-fencing of big U.S. businesses, which means earmarking more capital and liquid assets. That will squeeze earnings further – but how much depends on the fine print.
Irish banks’ bad debt clean-out is paying off 22 Feb 2016 Bank of Ireland said it would pay a dividend in 2016 for the first time since the crisis. No wonder – unlike some EU peers, Irish banks have made progress in hacking back their bad debts. As the economy recovers, the release of provisions could help to bolster capital further.
Energy haves circle have-nots as oil crunch bites 22 Feb 2016 Balance sheets and the recent Saudi-Russia deal will be on industry bigwigs’ agenda at a yearly gathering in Houston. Eighteen months into the crude price slump, the sector is primed for more M&A as a dearth of funding for weak producers pushes them into stronger players’ arms.
HSBC shares weighed down by fear of future 22 Feb 2016 The global bank hiked its dividend even as 2015 pre-tax profit fell 7 pct. HSBC thinks it can raise returns even as its balance sheet shrinks. But investors remain worried about negative rates, cheap oil and China’s slowdown. An 8 percent yield shows they can’t both be right.
Options market reveals depths of UK/EU jitters 22 Feb 2016 Sterling is sliding and gilts and the FTSE 100 are underperforming peers because of growing concern that Britons might vote to leave the European Union. But these moves are just the tip of the iceberg. Derivatives show an even deeper pessimism about the outlook for UK assets.
BTG Pactual’s Swiss sale less cheap than it looks 22 Feb 2016 The under-fire Brazilian investment bank will sell Swiss wealth manager BSI to EFG International for $1.3 bln. A 10 pct discount to tangible book looks fair. A probe into corruption in Malaysia could hit BSI and the potential for cost savings, despite a guarantee to cover fines.
Italy’s new bank giants hide elusive value 22 Feb 2016 A merger between Banco Popolare and BPM will begin a wave of dealmaking among Rome’s mutuals. It could create Italy’s third-biggest bank and add over 40 percent to the companies’ value. While cost cutting may be hard and merging disruptive, consolidation is long overdue.
China’s new securities chief faces old constraints 22 Feb 2016 Top regulator Xiao Gang has taken the blame for his fumbling efforts to prop up stocks, but he was only following orders. His replacement, former AgBank chairman Liu Shiyu, is unlikely to enjoy any more independence. China’s pledge to heed market forces remains on hold.
Wage restraint hurts Japan’s battle with deflation 22 Feb 2016 Japanese bosses reckon the world is too uncertain for wages to rise much this year. Oddly, the country’s unions basically agree – despite a robust labour market. This is another setback to Prime Minister Shinzo Abe’s efforts to stoke inflation, consumption, and economic growth.
Health woes show limits of Alibaba’s Midas touch 22 Feb 2016 A unit of the Chinese e-commerce giant has suffered a run-in with mainland regulators. Though shares in Hong Kong-listed Ali Health soared when Alibaba invested last year, reality has proved less exciting. It’s a reminder that even Jack Ma can’t cure investors’ loss of faith.
Dixon: Investors yet to price in Brexit risks 21 Feb 2016 Now Cameron has a deal with the EU, it’s down to the British people to vote. While the risk of Brexit looks less than evens, the economic consequences could be severe. With Boris Johnson bolstering the leave campaign, markets don’t seem to be factoring in the tail risks.
Jeb Bush leaves Wall St establishment in the lurch 21 Feb 2016 The former Florida governor dropped out of the White House race, putting millions in donor money and big backers in play. With Trump ahead, financiers like Henry Kravis, a gaggle of Goldman execs and others are skeptically calculating whether a return on Rubio is worth the risk.
Cameron’s EU deal just worth paper it’s written on 19 Feb 2016 The prime minister has won the right for the UK to prompt member states to discuss financial reforms it doesn’t like. It’s something, but doesn’t mean such rules can’t get through. And helping the City probably doesn’t help convince Britons not to vote for Brexit.
Argentina reaches endgame with bond adversaries 19 Feb 2016 A U.S. judge says he will allow the Latin American nation to resume paying creditors by March if Argentina’s Congress cooperates. He also praised President Mauricio Macri for helping forge a deal. Settlement looks like the only option for hedge fund Elliott and fellow holdouts.
Newfound fears of investor panic can be soothed 19 Feb 2016 There’s a greater chance that credit woes spark bank-like runs on mutual funds, a New York Fed study suggests. One reason is that such asset managers haven’t evolved with the times. Longer lockups for some would reduce the pain for both the funds and the financial system alike.
New Barclays investment-bank boss may revise realm 19 Feb 2016 Tom King is leaving and liable to be replaced by an outsider. Recruiting a new leader won’t be easy for Barclays CEO Jes Staley, himself an investment banker now atop one that lacks top-five clout. Just who he picks, though, could send a clearer signal about the strategy.