France tries potent anti-Brexit ploy: threats 3 Mar 2016 Gallic warnings that migrants will be waved through to Britain if the country leaves the EU could be scare tactics. But Economy Minister Emmanuel Macron’s words may do more to sway UK voters who fear immigration than economic arguments about the benefits of staying in the club.
Russia gets even less enticing for foreign banks 3 Mar 2016 Goldman Sachs may not help underwrite a Russian state bond issue after Washington criticised U.S. involvement, reports say. Foreign investment banks that remain in Moscow need business. But the difficulty in negotiating the conflicts shows why some are quitting.
Schroders picks bad time for not-great governance 3 Mar 2016 Michael Dobson will stand down as chief executive of the UK asset manager and become non-executive chairman. That’s not good practice. Schroders has reasons for the move, but given the tough environment for fund managers, there are good grounds for fresh blood.
Sports Direct investors get what they deserve 3 Mar 2016 The sports retailer will be relegated from the FTSE 100 after a profit warning and a minimum-wage controversy hammered the shares. Founder Mike Ashley’s control gives investors almost no influence. But they have always known that risk – and until now, have done well despite it.
China’s web curbs pose real threat to foreign tech 3 Mar 2016 Draconian new rules stop foreign outfits putting text, videos, maps or games online. Precise limits remain unclear and China doesn’t always enforce such sweeping bans. Still, the regulations could make life hard for Apple, Disney and others - and boost their homegrown rivals.
Wanda finds new financial rollercoaster in Paris 3 Mar 2016 The group run by China’s richest man is already betting on soccer and movies, two famously fickle businesses. Now Wanda and France’s Auchan will build a $3.4 bln leisure complex near Paris. Theme parks can be a pretty wild ride: just look at the French capital’s Disneyland.
Flawed Aubrey McClendon changed the energy world 2 Mar 2016 The former Chesapeake boss has died, a day after he was accused of conspiring to rig bids for oil and gas leases. Controversial business practices cost him his job and left the company struggling. He also helped kick off the shale revolution, a legacy that will endure globally.
AT&T screens TV’s cordless future 2 Mar 2016 In its first big move since buying DirecTV for $49 bln, the U.S. telecom titan is rolling out a video service that bypasses the set-top box. Verizon is selling a similar plan as T-Mobile US allows customers to binge on data. Consider the battle against King Cable fully engaged.
Guest view: Job numbers miss gig economy’s impact 2 Mar 2016 Official U.S. employment figures shed light on the millions of so-called platform workers driving cars or walking dogs. Understanding this evolution is critical to developing better labor policies, says former White House economist Diana Farrell of the JPMorgan Chase Institute.
Germany’s Facebook cartel probe deserves a Like 2 Mar 2016 The social network doesn’t charge a price, yet still is not free: users pay with their personal data. But are they getting a fair deal or is Facebook abusing its market power? Either way, it’s good that a pioneering investigation by Germany’s competition watchdog is asking the question.
Who pays for London City Airport’s golden ticket? 2 Mar 2016 The financier’s hub of choice has been bought for 2 bln stg by a group including Ontario Teachers’ Pension Plan. The price, about 30 times 2015 EBITDA, implies the airport needs to double its passengers to make decent returns. Or it can hike prices – and annoy its own customers.
Chesapeake ex-CEO may give enforcers overdue scalp 2 Mar 2016 U.S. prosecutors have failed to nail top executives in Libor and mortgage scandals, but bid-rigging charges against the energy firm’s McClendon might be a chance for some redemption. Though his antics make him a clear target, there’s nothing easy about holding bosses accountable.
Sports Authority loses game with unforced errors 2 Mar 2016 The U.S. retailer declared bankruptcy a decade after a $1.3 bln buyout. Debt and internet competition contributed to its demise, but rivals like Dick’s survived similar challenges and turned in a stellar performance. Bad management was largely to blame for the costly strikeout.
Rolls-Royce’s board activist is double-edged sword 2 Mar 2016 U.S. activist fund ValueAct has a seat on the board of Rolls-Royce. If the engine maker’s No. 1 shareholder musters enough patience, it can underpin the turnaround engineered by CEO Warren East. But should it push for quick fixes like a breakup, Rolls’ predicament could worsen.
India lowers capital hurdle for stretched banks 2 Mar 2016 Central bank Governor Raghuram Rajan has stepped in to help lenders neglected by the country’s tight budget. Tweaking the rules on what counts as Tier 1 capital could shrink the sector’s equity shortfall by $8 bln. Though shareholders are pleased, banks have less room for error.
Darty bids will leave investors well upholstered 2 Mar 2016 The electrical retailer’s 662 mln pound merger with French bookstore Fnac has been gazumped by furniture retailer Conforama. Fnac could pay a lot more, and add cash. But Conforama’s parent seems intent on diversifying away from South Africa. Darty can sit tight for a better deal.
Caixabank’s BPI ambitions require African solution 2 Mar 2016 The Spanish lender is reportedly in talks to acquire Angolan investor Isabel dos Santos’ stake in the Portuguese bank. But first it needs BPI to find a way to cut exposure to Angola. Otherwise Caixa’s efforts to control BPI will be no more successful than previous attempts.
AB InBev opts for speed in discount Chinese sale 2 Mar 2016 The brewer is selling SABMiller’s share of a joint venture that makes China’s top beer brand for just 5.2 times EBITDA. The $1.6 bln deal makes it easier for Beijing to approve AB InBev’s takeover of SAB. Besides, the Belgian group had little prospect of ever controlling Snow.
Wall St girds for role as White House battleground 2 Mar 2016 Hillary Clinton and Donald Trump emerge from Super Tuesday as their parties’ likely presidential nominees. Both have vulnerable ties to high finance. That’ll be fodder for heated attacks and even wayward campaign promises. Bankers are resigned to it. But it’s just what markets hate.
JD tests limits of Amazon’s "jam tomorrow" model 2 Mar 2016 The Chinese group has emulated the U.S. web giant in e-commerce. It’s taking a similar approach to investing in new businesses. Sales may be growing quickly, but so are losses. The risk is that JD won’t be able to fund these ventures for long, or that investors lose patience.
Spotify’s cash hoard signals it’s ready to dance 1 Mar 2016 The digital music service may be about to raise $1 bln of convertible debt, much of it from TPG. That’d hand the private-equity firm an IPO discount without affecting the $8.5 bln valuation from last year’s funding round. It’d also give Spotify firepower to hunt for partners.
U.S. bank watchdog may at last be back in business 1 Mar 2016 The Senate committee that oversees Wall Street essentially has been on hiatus for months as Chairman Richard Shelby tends to his re-election. Ex-Im Bank, the Fed and the SEC are all waiting. An end to this pathetic case of congressional inaction hinges on Tuesday’s polls.
Jamie Dimon to Wells Fargo: Go ahead, make my day 1 Mar 2016 The JPMorgan boss suggests that if his big, boring rival wants to compete internationally, it’ll have to buy an investment bank. Bulking up on Wall Street would recklessly push the lender led by John Stumpf into businesses it doesn’t know well. Dimon wouldn’t want that. Right?
Negative yielding bond world favours the agile 1 Mar 2016 German 10-year bond yields are in sight of last year’s record low, 0.05 percent. There’s no reason why they can’t fall lower than this given Japan just auctioned comparable debt at a sub-zero yield. Investors need to be nimble to make money in this world of negatives.
Exxon supertanker cruises on stormy financial seas 1 Mar 2016 Yields on the energy titan’s $12 bln bond issue were higher than previous debt sales, reflecting jitters about cheap crude and worries about Exxon’s triple-A rating. Paying 4.1 percent for 30-year money, though, is a problem cash-strapped oil rivals would love to have.
NYC judge unlocks door to Apple privacy win 1 Mar 2016 A jurist in Brooklyn says the FBI can’t force the tech giant to bypass security on an iPhone. The ruling confirms that a 225-year-old law doesn’t apply and that the hack would unduly burden Apple. It’s a roadmap for the better-known case unfolding in California and Congress.
Barclays’ new strategy is uneasy mix of past two 1 Mar 2016 The UK bank will exit Africa but keep the group’s investment bank intact. CEO Jes Staley’s predecessors Antony Jenkins and Bob Diamond respectively aimed to slash trading and advisory, and invest in it. In assuming the unit is the right size, the risk is weak returns persist.
Deutsche Boerse’s LSE bid could slip up on ICE 1 Mar 2016 The U.S. exchange may crash a merger between Germany’s exchange and its UK peer. Cash and a higher premium would be enough to turn LSE investors’ heads. The German group can counter with big synergies or hike its own bid - but that might annoy customers and its own shareholders.
Glencore’s recovery scores three out of four 1 Mar 2016 The Swiss-based miner has cut costs, reduced debt and proven its trading business does well when commodity prices are low. To reach a net debt target of $15 bln, boss Ivan Glasenberg needs to offload mines and a stake in its agricultural business into a market awash with sellers.
Western banks’ Chinese deals are a cautionary tale 1 Mar 2016 Citi is the latest foreign outfit to exit a Chinese lender. Like most rivals, it will make a decent return with this $3 bln selloff. But strategic benefits proved elusive. If the sector’s bets on financial technology play out the same way, that could prove more dangerous.