Peru could use legal tip from Brazil or Argentina 21 Jan 2016 The Andean nation beats neighbors economically but may lag on the legal front. A court scandal over land-reform bonds has hedge fund Gramercy and others crying foul. Rio and Buenos Aires are learning market confidence comes easier with independent judges and a wish to negotiate.
Chancellor: Best cure for low oil is low prices 21 Jan 2016 Having invested heavily, both mining and energy firms are struggling with oversupply and weak prices. New mining production from BHP and others will continue to weigh on commodities for years. But oil investment cuts set the stage for the next bull market in the black stuff.
How Symantec let bad math lead to a shaky deal 21 Jan 2016 Carlyle’s buyout of the software company’s Veritas unit was never actually worth the $8 bln headline figure. Excessive leverage was dressed up to make it look workable. Even the new 8 pct price cut is misleading. Boards and investors can help themselves by getting M&A sums right.
New index puts long-term investors to useful test 21 Jan 2016 Fund heavyweights, including Canada’s CPP and GIC of Singapore, are committing $2 bln to round up some 250 stocks that meet higher standards of corporate governance and profitability. Alphabet and Facebook, worth $760 bln combined, miss the cut. That makes it a bold experiment.
Smith & Wesson calls top of gun market 20 Jan 2016 The iconic weapons maker wants to go on a buying spree for sporting-goods businesses. That reflects industry worries that years of bumper sales stoked by fears of gun control are coming to an end. On past evidence, though, such diversification may not offer much relief.
Motown recovery proceeds in the slow lane 20 Jan 2016 President Obama’s visit to the Detroit auto show comes just over a year after the city emerged from bankruptcy. There’s less crime, a burgeoning hipster scene and private investment at work. But as with the region’s carmakers, which rallied quickly, big challenges lie ahead.
Investors teeter on edge of self-feeding panic 20 Jan 2016 Global equities are lurching lower as a rout in energy stocks spills into other sectors, including healthcare. The global growth outlook is looking less rosy, meaning valuations are worth reconsidering. Rising volatility, however, is apt to make much share selling indiscriminate.
Goldman and rivals’ pay cut may have bright side 20 Jan 2016 Staff compensation at the Wall Street firm is 8 pct less on average than in 2014 and down almost 11 pct at Morgan Stanley. JPMorgan workers fared better but still took a hit. With share values way down, though, those paid in stock may get a great deal – barring another crash.
Carlyle gives LBO targets cause to flap 20 Jan 2016 The yellow-bellied deal squawker is back. Symantec now will sell Veritas for $7.4 bln, 8 pct less than originally agreed. The separation hurt the data-storage firm’s sales and debt markets didn’t help. Hen-pecked investors should beware dangerous games of buyout chicken.
Swaps watchdog and KPMG belong in audit doghouse 20 Jan 2016 The CFTC understated liabilities by more than 75 pct of its operating budget over the last two years, prompting the accounting firm to pull opinions certifying the books. It’s bad enough the regulator couldn’t keep its figures straight. KPMG’s obliviousness looks even worse.
London’s Magic Circle invites U.S.-style danger 20 Jan 2016 Freshfields is the latest member of the city’s legal elite to create more second-class partners. Stars get bigger pieces of the pie, ensuring they don’t defect to richer rivals. That can lead to resentment from other lawyers. Defunct Dewey showed how the pay gap causes trouble.
EU monopoly fears may defeat data-sharing phobia 20 Jan 2016 Europe’s technology scene lags the U.S. in information-sharing, as in funding. Cultural and legal traits are tough to change. But data for medical research, for example, should be freely available. The EU’s financial tech upstarts could even benefit from antitrust moves, too.
BTG Pactual breathing sigh of relief too early 19 Jan 2016 The Brazilian investment bank’s new bosses reckon they’re past the worst of the fallout from ex-CEO André Esteves’ arrest. But the firm stayed profitable last quarter only by selling assets. U.S. rivals have shown recovering from a franchise-threatening event can take years.
Viacom activism is smarter than it looks 19 Jan 2016 Another unhappy shareholder wants a governance revamp at the $16 bln U.S. media company. With Sumner Redstone controlling 80 pct of the vote, Eric Jackson’s campaign seems quixotic. But Redstone won’t be around forever, and even modest change now could get the ball rolling.
Cox: Trump set to invade Davos if in spirit only 19 Jan 2016 The blustery real estate mogul isn’t due to attend the World Economic Forum with other business and political leaders, but the force behind his unlikely campaign for the White House will. Populism finds its roots in the inequality that Davos both represents and tries to solve.
U.S. bank laggards prove cuts alone don’t cut it 19 Jan 2016 Morgan Stanley and BofA had pitiful fourth quarters despite slashing more costs. Bosses Gorman and Moynihan have some decent businesses – as does Citi, another weak performer. Even with leaner operations, though, they aren’t eking out anything like the returns investors expect.
Facebook forerunner misses out on $300 bln legacy 19 Jan 2016 Friends Reunited, a UK site started in 2000 and once valued at 175 mln pounds, is shutting down. Social networking and the online subscription model were both ahead of their time. The combined market value of Facebook, LinkedIn and Twitter attest to the lost opportunity.
JD emulates Alibaba with black-box finance unit 18 Jan 2016 A fundraising has valued the Chinese e-commerce group’s financial division at $7 bln. The business dabbles in loans, payments, and crowdfunding. Yet JD.com does not disclose its financials. As with larger rival Alibaba, outside investors can only guess at its true worth.
Too-big-to-fail cabal nursing $130 bln in damages 15 Jan 2016 That’s the amount of market value swiped from the top six U.S. banks in the past two weeks. All but Wells Fargo now trade below book value. It’s not a reaction to lackluster fourth-quarter results, but a sign investors expect a year of pain. Whether they’re right is a toss-up.
Wal-Mart store closings a sign of Amazon gains 15 Jan 2016 The largest U.S. retailer is still growing, but plans to shutter 269 outlets suggest darker days ahead. An increased focus on selling groceries may slow the slide of the company’s share price. Relentless competition from the online rival, though, is clearly taking a toll.