“Hard Brexit” less bad than hard uncertainty 26 Sep 2016 London’s financiers are fretting that the UK may advocate a clean break with the EU. That would hurt the City, but at least banks could plan to move elsewhere. For now, the problem is that the final result could still be benign - so there’s a big risk of jumping the gun.
RWE gives masterclass in financial alchemy 26 Sep 2016 The troubled German utility is listing a minority stake in its healthy parts - grids, renewables and retail. Nothing will change much operationally. Yet the company hopes the spun-off part, Innogy, will have twice RWE's market cap. If that sounds illogical, that's because it is.
Japan has most to lose from global trade backlash 26 Sep 2016 The country is begging America to ratify the TPP trade pact and urging Britain to handle Brexit carefully. The desperate pleas reflect Japan's outsized reliance on international trade. TPP also helps Prime Minister Shinzo Abe shake up the domestic economy, especially in farming.
Asian cull makes Goldman Sachs look rattled 26 Sep 2016 The Wall Street bank is laying off nearly a third of its Asian investment bankers. Lumpy deal flow, fierce competition and low fees are endemic in Asia, but Goldman's pullback suggests the scandal over Malaysia's 1MDB may have also dampened its appetite for risk.
Viewsroom: Apple’s driving ambition 23 Sep 2016 The iPhone maker’s desire to enter the auto market could benefit from taking a stake in Elon Musk’s Tesla. Recent actions by the BOJ may help kickstart the Japanese economy. And what it means that hedge-fund manager Leon Cooperman is fighting the SEC rather than settling.
Brazil’s energy future may fly under Canadian flag 23 Sep 2016 State-controlled Petrobras is selling its natural gas pipelines to help pay down debt. Investors from China and Singapore will back the $5.2 bln acquisition led by Toronto-based Brookfield. The clever structure and the buyer's deep pockets could augur more deals between the two.
Facebook blunder may stem online TV tide 23 Sep 2016 The $370 bln social network for two years erroneously inflated how long users were watching videos. It's an embarrassing mistake that should give advertisers a stronger negotiating position with Facebook. It also could prompt a recalibration of media strategies and budgets.
Harvard struggles to overcome its hedge-fund past 23 Sep 2016 The Ivy League university's $36 bln endowment lost 2 pct in the year to June, falling short of its yardsticks and rival Yale's 3.4 pct gain. More than a decade after the champion of its partially in-house operation quit, Harvard faces problems of leadership and investment style.
Tech vultures try luck with broken-winged Twitter 23 Sep 2016 Google, Salesforce and others may want to buy the $16 bln social network. Slowing revenue and user growth, along with a lack of direction, make a sale a logical option for Twitter. The rationale for an acquirer is less clear, but cash piles and egos could prevail over reason.
Review: The bad and good of a world without work 23 Sep 2016 Will robots liberate everyone from boring labour, or will they make many workers redundant? Ryan Avent's "The Wealth of Humans" suggests they could do both. So it's up to governments to find new ways to share out the benefits. Past experience suggests this will not be easy.
Corbyn is global symbol not of rage but confusion 23 Sep 2016 The UK Labour Party leader, facing re-election this weekend, has split the left in two. Divisive figures like Jeremy Corbyn and Donald Trump reflect a new difficulty in identifying heroes and villains. An old foe, globalisation, is in retreat, yet perceived inequality persists.
Hadas: Central banks play with monetary absurdity 23 Sep 2016 Monetary authorities have taken recourse in increasingly empty promises. The Bank of Japan's Haruhiko Kuroda has taken this verbal drama to a new and ultimately dangerous level. Central banks could rely on deeds, not words, if their tools and targets were more realistic.
Sports Direct does leg two of governance triathlon 23 Sep 2016 The UK retailer's CEO will be replaced by owner Mike Ashley, its second big concession to investors in a week. That will satisfy calls for the powerful founder to be held accountable. Shareholders might rather have seen the chairman go, but the move shows the group is changing.
Telefonica’s tower IPO deserves discount 23 Sep 2016 The Spanish telco giant is selling up to 40 pct of its infrastructure business, valued at up to 3.8 billion euros. Other telecom tower flotations have been warmly received, but the new company Telxius also includes a hard-to-value undersea cable business. That dulls its appeal.
UK, even now, is a good bet for Li Ka-shing 23 Sep 2016 The Hong Kong tycoon is reportedly eyeing $14 bln of gas grids. Never mind Brexit uncertainties or the veto of Li's British mobile merger. UK infrastructure offers solid, stable returns, and this could be a good use of the $7 bln cash pile stranded at Li's Power Assets unit.
Vodafone tops up for a fight in India 23 Sep 2016 Injecting $7 bln of cash will help the mobile giant's Indian unit compete in a mega spectrum auction and in a price war against new entrant Jio. It also suggests an IPO of the wholly owned business is off the table for now. India may become a big drag on its London-listed parent.
Yahoo hack could test sale to Verizon 22 Sep 2016 The internet firm disclosed the theft of data from 500 mln user accounts in 2014. The breach, apparently by a state-sponsored actor, is an embarrassing coda to Yahoo's independent existence. If it has a big enough impact, it could even give Verizon a way out of its $4.8 bln deal.
Carlos Slim may be necessary evil for Brazil’s Oi 22 Sep 2016 The Mexican billionaire's America Movil is interested in buying part or all of the bankrupt telecoms firm. Economic recession and a fragmented market pushed Oi over the edge and may now hasten consolidation. Slim wouldn't be Brasilia's first choice, but he has deep pockets.
Hedge-fund fee reality will set in only slowly 22 Sep 2016 The archetypal 2-and-20 structure isn't actually the norm. Even slightly lower charges, though, look way too high against the feeble returns of late. New data suggests fees are drifting lower, as they should. There are, though, plenty of reasons to think the process will drag.
Trump would follow in Obama’s debt footsteps 22 Sep 2016 The Republican presidential nominee's economic plan would add $5 trln in U.S. borrowing, a new study estimates. Barack Obama tallied about $8 trln during his two terms. Adding debt for infrastructure makes more sense than for cutting taxes on the rich. Both kick the can, though.
Shrink to greatness? It’s not always that simple 22 Sep 2016 Danish conglomerate Maersk just said it will break up. The shares barely moved. Carving up a complex corporate beast can make great sense - think HP. But some hybrid companies that resist being split, like Rolls-Royce, ABB and AB Foods, may have a point.
MPS sub debt trade is only for the bold 22 Sep 2016 Monte dei Paschi di Siena needs bondholders to swap their debt into shares to make a 5 billion euro rescue viable. That will require arm-twisting, and bold assumptions on the bank’s profitability. There are less stressful ways to trade Italy’s biggest bank rescue.
Irish budget handout spreads largesse beyond Apple 22 Sep 2016 The government may phase out an unpopular levy introduced during the financial crisis. A strong recovery gives it scope to part with a tax that brings in 8 percent of revenue. Offering goodies to workers may also quiet demands that it accept Apple’s 13 bln euros in back taxes.
CaixaBank’s Portugal saga ends in messy trade-off 22 Sep 2016 The Spanish bank’s bid for BPI will proceed after the latter removed a voting cap on CaixaBank's 45 percent stake. Another issue - BPI’s problematic exposure to Angola - may be resolved, albeit by ceding control in the African unit. At least CaixaBank has a free hand in Portugal.
Coal rally may already be out of steam 22 Sep 2016 The steel-making fuel is likely to give producers like BHP Billiton and Anglo American unexpected earnings boosts but there are few reasons to believe in a lasting rally. Weak Chinese metals demand and a potential revival in domestic supply could make gains fragile for investors.
Indonesia’s e-commerce riches will be elusive 22 Sep 2016 Capital is pouring into Southeast Asia's most promising e-commerce market. Alibaba's $1 bln stake in Lazada gives it a head start. But competition is fierce. Issues like logistics and payments will make it costly to replicate the dominance the Chinese group enjoys at home.
China gets steelier about debt restructuring 22 Sep 2016 Metals trader Sinosteel has agreed a $4 bln workout. The deal is a fudge, but spreads the pain more widely than expected. Meanwhile, a smaller miner has been allowed to fail. Both episodes suggest China is getting a bit tougher about debt problems in moribund sectors.
Music industry jams to a new scapegoat groove 21 Sep 2016 Subscription services like those from Apple and Spotify helped lift U.S. spending on tunes by 8.1 pct to $3.4 bln in the first half. It's the best news in years for music makers. They always seem to find a villain, though, and this time they're beating up on Google's YouTube.
Latest Apple rumor may vanish as fast as a McLaren 21 Sep 2016 The iPhone giant may have approached the British supercar firm. Apple, though, has made few acquisitions, even to help it pioneer smartphones. While McLaren is high-tech, it's hard to see it taking Apple's car ambitions far. Fancy can run free when a company has $230 bln of cash.
Fed “forward guidance” blows too much smoke 21 Sep 2016 The U.S. central bank again declined to raise rates, leaving what hedgie Dan Loeb called the crack cocaine of loose monetary policy in place. The Fed counts talking to the market as one of its tools. But its story has changed so much that it might do better being less chatty.