Fed hikes may flummox newbies and old hands alike 17 Jun 2015 Many people in the financial markets have never worked through U.S. policy rate rises. Unhappily, training and textbooks are of limited use, because there are no precedents for the end of so many years of ultra-low rates. Besides, crisis and regulation have transformed trading.
Coty investors in premature lather over P&G swoop 16 Jun 2015 The fragrance group’s shares rose 19 pct on reports it won the auction for its rival’s perfume, cosmetics and shampoo brands. That implies some punchy cost cuts on a complex, as yet unsigned deal that may tie up resources for some time. Shareholders may have to rinse and repeat.
Elizabeth Warren’s anti-buyback call a winner 16 Jun 2015 U.S. share repurchases are hitting record levels. But more cash for shareholders means less for workers and investments. The Massachusetts senator is right to see a political angle. Even if she has no luck in her quest to change the law, she may help make buybacks unpalatable.
Rob Cox: Colt failure more mismanagement than guns 16 Jun 2015 The 179-year-old maker of the revolver that won the U.S. West has filed for a fast-track bankruptcy. Sciens, the buyout firm that sucked Colt dry with dividends and fees and now owns its headquarters, is the default bidder. That could mean déjà vu for the gunmaker and lenders.
Kirk Kerkorian: the carmaking king who wasn’t 16 Jun 2015 The billionaire, who has died at age 98, helped shape Las Vegas. He was less successful, though, at trying to inject a unique brand of fuel into Detroit’s engine. Kerkorian’s career is a sobering lesson for Fiat boss Sergio Marchionne, who drives his own brand of auto activism.
Goldman may lose its way on Main Street 16 Jun 2015 The Wall Street denizen plans to lend to regular Joes and Joannes online. Healthy returns probably await. CEO Lloyd Blankfein may also hope a broader set of customers comes in handy in the next crisis. It’s a big strategic change, however, fraught with distractions and risks.
Wall Street lead over EU banks looks set in stone 16 Jun 2015 European trading and advisory revenue is down 30 pct since 2010 while U.S. investment banking has grown. Now Deutsche Bank and HSBC are cutting further, even more ground will be ceded. The region’s tentative recovery and capital markets project offer only slim hope of a reversal.
U.S. homebuilders pour $5 bln slab of common sense 16 Jun 2015 Standard Pacific and Ryland have unveiled a purported merger of equals that actually approximates one. Investors even pushed both stocks up over 5 pct on Monday. The new group needs help from housing markets – but if it’s approved, the deal looks like a solid foundation.
Under Armour dresses in ugly Google governance 16 Jun 2015 The $18 bln athletic-wear maker wants to hand out a new class of stock, as the web search giant recently did, to keep control in founder Kevin Plank’s hands. Super-voting stock is bad enough. Changing the rules on shareholders is worse. The Great Man theory has gone wild.
Fed might fret about emerging market "spillback" 16 Jun 2015 Weak investment and import demand in developing nations is threatening to drag down U.S. growth just as the Federal Reserve mulls raising interest rates. The central bank was able ignore the effects of its bond-buying on others. But a spillback could choke the American recovery.
Health insurer M&A is risky Obamacare side effect 15 Jun 2015 Cigna rebuffed Anthem’s $45 bln offer while mulling a $32 bln bid for Humana. The urge to merge is a predictable attempt to boost profit after the controversial law clamped down on premiums. With only five big insurers, though, any deals will get a thorough antitrust checkup.
Judge humbles Greenberg and Uncle Sam in one shot 15 Jun 2015 The former AIG boss proved the insurer’s $182 bln rescue was technically illegal, yet the government owes him no money. What can probably be spun as a victory for both sides will surely please neither. The reality is that huge egos have finally been cut down to size.
Hudson’s Bay wangles way back to Teutonic roots 15 Jun 2015 The Canadian owner of U.S. store Saks – once an English company headed by a German – has the best of a $3 bln deal to buy Cologne-based retailer Kaufhof. Offloading real estate will help it finance the trade. It also gives Hudson’s Bay a cushion against old world risks.
Bombardier’s solo test flight could be telling 15 Jun 2015 The C$6 bln manufacturer is showcasing its long-delayed and over-budget CSeries jets at the Paris Air Show this week. Orders and cancellations there are often important. For Bombardier, which is listing a slug of its more profitable rail unit, the stakes may be even higher.
U.S. car boom collides with its tech corollary 15 Jun 2015 Auto dealership software specialist Dealertrack Technologies agreed to a $4.8 bln buyout by Autotrader and Kelley Blue Book owner Cox Automotive. It’s a steep price for a loss-making firm – and a further sign that cheap credit and pent-up demand are fueling a frothy car market.
Activists may feel pill chill before watchdog bite 12 Jun 2015 An SEC probe of investor wolf packs for collusion seems a stretch. Poison pills might be a bigger threat to cabals of ornery owners. Sotheby’s and Dan Loeb’s recent spat suggests they’re legal. Regulators may have to sit out this emerging battle over shareholder democracy.
REIT gambit gives Sears $2.6 bln more to burn 12 Jun 2015 The flailing U.S. retailer wants shareholders to exercise rights to capitalize a real estate unit which will buy 235 stores. The REIT may be a decent bet, and the proceeds will buy Sears boss Eddie Lampert time. The danger is that the hollowed-out merchant will waste the cash.
Review: Inequality part deux is a better start 12 Jun 2015 François Bourguignon’s book explores a paradox: a welcome decline in the global gap between rich and poor and a potentially worrying increase within countries. The French economist sketches the facts more succinctly than Thomas Piketty and also admirably allows for uncertainty.
Can countries rebrand themselves like companies? 12 Jun 2015 A Lazard-WPP partnership to create “nation branding programs” raises the question. It’s one thing for a cheese or booze maker to become Mondelez or Diageo, quite another for despotic regimes or broken economies to simply rename themselves. Our columnists take a stab at a few.
Return to China tough for American orphan stocks 12 Jun 2015 Soaring home markets are prompting Chinese companies to delist from U.S. exchanges. The likes of social network Renren and data centre group 21Vianet may hope for higher valuations in China. But rigid rules make mainland listings harder. Only the unloved will attempt the journey.