Fluffy watchdog fintech pitch exposes bigger issue 31 Mar 2016 The OCC’s foray into overseeing tech’s role in finance, the first by a U.S. regulator, is full of generalities, not specifics. That’s because the agency doesn’t police the nonbanks driving many of the changes. Resolving which watchdog is in charge would foster clearer rules.
New M&A marriage vows raise cost of fooling around 31 Mar 2016 Markit must ensure the CEO of merger partner IHS gets the top job or risk breaking the combined company’s bylaws. AbbVie gave the boss of Pharmacyclics similarly ironclad rights. A rise in stock deals is forging stronger prenuptial agreements for so-called social issues.
Bickering ad men promote more women than tech does 31 Mar 2016 A discrimination lawsuit at a WPP unit has led boss Martin Sorrell to trade barbs with Publicis CEO Maurice Levy over women’s advancement. Both firms, though, do better on gender equality at senior levels than Facebook or Google. That’s a rare edge over their new rivals.
Europe’s IPO market has ladders as well as snakes 31 Mar 2016 Issuance is at a seven-year low, but those new stocks that have listed this year are up 9 pct on average. Better conditions now should allow more companies to come to market. But the UK’s EU referendum and the U.S. election suggest the window for IPOs will open only briefly.
Google CEO nestles inside fortress of entitlement 31 Mar 2016 Sundar Pichai was given another $200 mln of equity on top of $100 mln last year. He’s not a founder and Google’s search business is a well-oiled near-monopoly. Shielded by a three-share structure, Alphabet bosses Larry Page and Sergey Brin are showing their imperialist ways.
GE Capital shows systemic tagging is working 31 Mar 2016 GE’s finance unit wants the U.S. to end its too-big-to-fail designation now that it has slashed size and risk. MetLife, which a court just freed from its label, had initiated a breakup. Even big banks have trimmed a bit. SIFI-dom’s burdens may be achieving what lawmakers wanted.
Pensions not steel are Tata’s big UK headache 31 Mar 2016 The Indian group’s British plants have issues, but could be rendered profitable. The bigger challenge is funding shortfalls in its pension scheme for 130,000 members. If a new acquirer could find a workaround and new investment, British steelmaking could still work.
French telco unwind would be missed opportunity 31 Mar 2016 Orange and Bouygues are in make-or-break talks to seal a deal. Their terse statements after months of discussions have spooked the market, with shares in all four French operators tumbling, because a tie-up might benefit all. But obstacles like governance and valuation remain.
Wanda trades places in $4 bln property buyout 31 Mar 2016 Chinese tycoon Wang Jianlin may delist his flagship property firm from Hong Kong less than 16 months after its IPO. It’s a bad time for a company exposed to China’s smaller cities to be in the public eye. Wang may nurse big plans, but minority investors have only a bit part.
Italy gets pain of bail-ins, without the benefit 31 Mar 2016 The Italian government wants to compensate retail creditors of four failed banks through a bank levy. That may save the government the cost. Yet making other banks pay weakens lenders. And, the more creditors are protected, the worse they will be in holding management to account.
Politics, not finance, is key question for Anbang 31 Mar 2016 The ambitious Chinese group could probably buy U.S. hotelier Starwood for $14 bln without breaching limits on insurers’ overseas assets. Raising the necessary funding would be doable, too. The real issue is whether Anbang can keep China’s government onside.
India cotton seed spat sows bigger trouble 31 Mar 2016 The government’s move to cap the fees Monsanto can charge for licensing its technology for genetically modified seeds looks short-sighted. It rekindles old fears about India’s cavalier attitude to intellectual property and gives big foreign firms another reason to stay away.
Guest view: Time to harness power of green trade 30 Mar 2016 Progress is being made on financing cleaner technologies, but many nations charge high tariffs on water purifiers and such. Upcoming WTO talks could help push to make environmentally friendly products more affordable, argues former U.S. Treasury Secretary Henry Paulson.
Big Data cuts into red tape of official statistics 30 Mar 2016 Government figures for inflation and the like benefit from consistency, but they come late and sometimes adulterated. Using people wielding mobile devices, tech firms can add bottom-up figures, speed and global comparisons. A World Bank test may help win over wary civil servants.
Students deserve debt relief but truth comes first 30 Mar 2016 More Corinthian Colleges alums may see their federal loans forgiven after the defunct U.S. university lied about job prospects. Meanwhile, a law school beat fraud claims over dodgy employment stats. Strict disclosure rules would be a better way to teach fibbing educators lessons.
MetLife SIFI heroics give Uncle Sam a headache 30 Mar 2016 The insurer has won its battle to overturn its designation as a systemically important financial firm. CEO Steve Kandarian is now the toast of Wall Street, even if few can emulate him. It’s a big defeat for regulator FSOC, though, which is also facing attacks on other fronts.
Intesa complicates UniCredit’s escape route 30 Mar 2016 Italy’s two biggest banks are underwriting capital raises by weaker peers. Given the market panic, UniCredit is entitled to seek state help to cut its risk on Banca Popolare di Vicenza. But by pressing on with a separate underwriting, Intesa is underlining its relative strength.
Valeant’s best shot depends on lenders’ mercy 30 Mar 2016 The drugmaker wants to extend its deadline for filing financial statements and ease interest-coverage covenants. The latter request would insure against a cash-flow crisis but it’s still alarming. Creditors will demand a pound of flesh and control of Valeant’s destiny in return.
U.S. market watchdog’s small moves may be big help 30 Mar 2016 Clearer rules for trading halts and “dark pool” exchanges are among the Securities and Exchange Commission’s modest reforms. They’re far from the broad changes mulled after charges of rigged markets. But with President Obama’s time short, they’re worthy preludes to larger steps.
Metro demerger might lift valuation by a third 30 Mar 2016 The 8 bln euro German retailer is splitting in two. Its food and electronics business had few synergies but a big conglomerate discount. If Metro can close half the valuation gap to peers, and Russia doesn’t deteriorate further, shareholders should be significantly better off.
Sharp take-under oddly denotes Japanese success 30 Mar 2016 Foxconn has clinched control of the ailing Japanese display maker for a reduced $3.5 bln. Fixing Sharp will be a tough task for the Taiwanese giant led by Terry Gou. But this historic, if somewhat ugly and complicated deal, is Exhibit A that Japan Inc is capable of reform.
Banks on Brexit: deeds count more than words 30 Mar 2016 Bank of America Merrill Lynch’s B-word ban is the latest sign global financial firms are tying themselves in knots over the UK’s European Union referendum. If big banks want to keep the union, silence is helpful. But a better plan is to hire more people outside London.
Sports turns into pricey contest for Chinese tech 30 Mar 2016 Entertainment group LeSports has raised $1.2 bln to take on giants like Alibaba and Tencent. With the tech sector flush with cash, and sports in favour politically, another costly battle for market dominance looms. Unproven business models raise the stakes further.
Tata Steel is wise to play to its home advantage 30 Mar 2016 The Indian steelmaker may sell all of its UK business. Weak local demand and a flood of cheap Chinese imports make Tata’s European arm much less attractive than its domestic operations. M&A at home may also prove more profitable than the ill-fated 2007 takeover of Corus.
Even Wall Street’s M&A pros can get scammed 29 Mar 2016 A partner brought into Paul Taubman’s advisory firm in last year’s Blackstone deal has been accused of a $25 mln fraud. Andrew Caspersen’s privileged background makes the charges all the more jarring. It’s a reminder that determined wrongdoers are hellaciously difficult to stop.
Apple could take a bigger bite out of Washington 29 Mar 2016 The iPhone maker’s lobbying efforts pale next to rivals like Google and Facebook. Apple’s more modest policy ambitions in some ways justify the thrift. The latest encryption battle, however, suggests the $580 bln tech giant might benefit from investing more in the U.S. capital.
UK tiptoes around buy-to-let housing boom 29 Mar 2016 The Bank of England wants lenders to apply stricter checks on landlords, including a 5.5 pct interest rate test. But this will barely slow the rampant growth in buying homes for investment. Amid tax reform and the risk of an EU exit, any more might have provoked a housing slump.
Change at the top will do Telefonica good 29 Mar 2016 Cesar Alierta is stepping down as executive chairman after nearly 16 years of expanding the Spanish telecom company. Recent returns for shareholders haven’t been great. There is a danger in overstaying and other long-serving Spanish bosses ought to take note.
Post-Rousseff Brazil may enjoy only brief respite 29 Mar 2016 The president’s bid to avoid impeachment is faltering as badly as the economy. Her likely replacement, Michel Temer, might win backing from the markets. But he may only have two-and-a-half years in office, and possibly far less. Brazil’s problems will take longer to fix than that.
Iran more red herring than black swan for oil 29 Mar 2016 Despite lifted sanctions and a more moderate government, Tehran lacks the investment to deliver a boost to supply. Next month’s unofficial OPEC meeting may produce an output freeze. With Russia also less liable to increase its flows, pressure on prices looks more up than down.