China’s market size gives it trust-busting clout 3 Dec 2013 One of the country’s competition watchdogs is investigating Qualcomm. Though details are scarce, a probe is likely to involve the mobile phone chipmaker’s approach to licensing technology. China’s big and fast-growing market gives it extra heft when going after foreign companies.
Canadian economy far from loony 2 Dec 2013 GDP expanded at a 2.7 pct rate in Q3, while stocks are up 8 pct in 2013. Housing may be set for a downturn and softer commodity prices don’t help. But its well-run banking system and moderate money supply growth mean Canada remains better crisis-proofed than most big economies.
Amazon’s drone promise is yet more jam tomorrow 2 Dec 2013 The online retailer expects airborne deliveries just a few years hence. It’s a striking vision, but it seems as overly optimistic as investors’ expectations of the company overall. Amazon’s market value has ballooned to $180 bln despite big profits always hovering in the future.
The synthetic CDO returns humbled and tame 2 Dec 2013 Mere mention of the complex derivative induces ire and laughter for its role in the crisis and JPMorgan’s whale fail. Citi’s latest iteration of the CDO, though, is less of a monstrosity. It shows that while there’s no way to eradicate greed, buffers for it can at least be built.
Icahn’s Talisman revamp may not bring fortune 2 Dec 2013 The activist has won two board seats at the Canadian energy firm. But it was already clear that the $12 bln company needed to sell assets. With BP, Apache and Conoco also offloading wells, the problem is not so much the strategy as whether it can add value in a buyer’s market.
Princelings on payroll can be proper despite peril 29 Nov 2013 Morgan Stanley, Citi and JPMorgan are under scrutiny for hiring the scions of foreign officials. Making job offers just to gain government business can amount to bribery. But connections are a virtue, as long as they’re combined with experience and other solid qualifications.
Repsol’s boardroom brawl won’t end peacefully 28 Nov 2013 The Spanish oil firm’s second-largest shareholder, Mexico’s Pemex, has publicly attacked Repsol’s boss, his record and his pay. It may have a point, but the form is poor. An open, protracted conflict is in no-one’s interest. It is unlikely to have a happy ending.
Giant Interactive’s $2.9 bln buyout hard to resist 28 Nov 2013 The Chinese gaming group’s chairman is leading a consortium to take it private. At 13 times this year’s earnings, the offer is at a chunky premium to peers. The buyer can benefit from leverage and Giant’s strong product pipeline. But independent investors have few alternatives.
Edward Hadas: Bitcoin is a step back not forward 27 Nov 2013 The web currency delights right-wing, anti-government economists. But private-sector money is a fantasy. Currencies need political authority; money matters are naturally the state’s responsibility. Bitcoin’s appeal has a lot to do with governments being bad monetary managers.
Activists torpedo their own case with "greenmail" 27 Nov 2013 Uppity investors like Carl Icahn say their rattling of corporate cages benefits all shareholders. That’s one reason they can exert pressure on large enterprises with small investments. But the argument is weakened when they sell their stock to their targets in exclusive deals.
Chinese “tapering” may worsen U.S. bond woes 27 Nov 2013 Large dependable buyers of Treasuries may be thin on the ground in the coming years. The Fed will trim, and eventually stop, its asset purchases. And now China is talking about halting its reserve accumulation. U.S. bond yields could rise faster and further than expected.
New U.S. mortgage supremo set to be step backwards 26 Nov 2013 Congressman Mel Watt is President Barack Obama’s pick to be Fannie Mae and Freddie Mac’s new regulatory overlord. Last week’s Senate rule change makes him a shoo-in. But with no experience, clear political bias and campaign cash from both companies, he’s a bad choice all round.
Proponent is odd part of $27 bln Canadian oil plan 26 Nov 2013 A west coast refinery to process domestic crude into products for Asia makes decent sense. What’s headline-grabbing is that the idea comes from David Black, a newspaper mogul, not from an energy specialist. Despite hints of Chinese financing, that makes the proposal seem flaky.
Turning suit deal inside out reveals silver lining 26 Nov 2013 After fending off a hostile bid from Jos. A. Bank, Men’s Wearhouse is now proposing to buy its smaller rival. Cost savings worth up to $1.1 bln cover much of the price and the combined company would be less indebted. Structured this way, the deal is financially more fashionable.
Repsol nears underwhelming YPF deal 26 Nov 2013 The Spanish oil group may accept $5 bln from Argentina as compensation for the expropriation of its stake in YPF. The snag? It might be paid in government debt. Still, investors expected less and Repsol probably has little scope to get more in this politically charged situation.
U.S. trustbusting would make a great monopoly 25 Nov 2013 The Justice Department is beating the pants off the Federal Trade Commission with pushback on AT&T, US Airways and AB InBev deals. The FTC has scored points protecting consumers. Leaving antitrust to DoJ would reduce costly overlap and let the agencies play to their strengths.
YPF’s expropriation rebound threatened by Apache 25 Nov 2013 The energy group has surprisingly rebounded since Argentina confiscated Repsol’s stake 18 months ago. The shares have doubled and output is rising. But that doesn’t justify going shopping. YPF needs capital for its $37 bln shale project more than it needs additional wells.
Chrysler IPO delay edges Fiat into driver’s seat 25 Nov 2013 The union fund that owns 42 pct of the Detroit automaker needs an $18 bln total valuation to make a public listing worthwhile. Recent price talk has been considerably lower. Pushing the stock sale into next year suggests majority owner Fiat is in a better negotiating position.
Wal-Mart CEO choice acknowledges glum reality 25 Nov 2013 Replacing Mike Duke with international boss Doug McMillon is a safe pick for the $260 bln retailer. It avoids the upheaval that rivals have invited by hiring outsiders and yet heralds nothing radical in the fight with Amazon. Wal-Mart looks resigned to play the plodding behemoth.
Time Warner Cable deal requires Malone magic 22 Nov 2013 Charter wants to buy its larger $60 bln rival, which probably means larding the combined company with debt. Obvious synergies are worth only about $3 bln today. That implies crafty cable magnate John Malone, Charter’s minority owner, may have other ideas to make a merger work.