DONG’s green energy premium is a work in progress 24 May 2017 By hiving off its North Sea oil and gas assets for $1.3 bln, the state-owned Danish utility is now one of the biggest clean energy pure-plays. Yet its stock market value does not reflect this unique position. A 20 pct discount to German rival Innogy seems excessive.
Jump at Bunge shows Glencore has its M&A mojo back 24 May 2017 The commodity giant's agricultural arm approached the $11 bln U.S. grain trader about a friendly deal. A takeover may not be the goal, and Bunge is cool on a tie-up. But after some tough balance-sheet repair, Ivan Glasenberg’s trading powerhouse is clearly back on the offensive.
Saudi dollars overexcite Blackstone’s investors 23 May 2017 They've pushed the private-equity firm's shares up 9 pct since the kingdom's possible $20 bln infrastructure commitment was revealed, bringing the market cap to $38 bln. But finding investments will take time, and fees will be on the low side. The value uplift looks overdone.
Nokia-Apple spat lays bare tech law of the jungle 23 May 2017 The two groups settled a patent row with a deal that includes the U.S. giant buying extra kit, and selling Nokia products in Apple stores. Patent wars may appear to be about legal rights and wrongs. They’re really just a fight over who gets what share of the value chain.
Euro rally is on probation 23 May 2017 The single currency is at six-month highs above $1.12. The euro zone economy’s improving health is being acknowledged, and French political risk has diminished even as it has risen in the United States. Yet options prices show little conviction that the gains will continue.
Suicide bombing brings tragic twist to UK election 23 May 2017 The attack that killed at least 22 concertgoers in Manchester is Britain’s deadliest in more than a decade. Its aftermath will dominate the remaining two and a half weeks of campaigning. As in other European countries, economic issues will take a back seat to security concerns.
Universal Music spinoff could be a one-hit wonder 23 May 2017 Vivendi could float a stake in its music label, the French media group’s CEO has said. The growth of online streaming has revived the industry’s prospects, but the long-term economics are still shaky. An offering would say more about chair Vincent Bolloré’s empire-building.
Only Russia can make OPEC great again 23 May 2017 Moscow is giving the cartel more pricing clout. A mooted deal to extend output cuts and drain global crude stockpiles can only succeed with the continued support of the world’s biggest crude producer. With U.S. drillers recovering, it may be time to make the alliance permanent.
Germany is dealing with its bank-branch addiction 23 May 2017 Measly interest margins and rising capital requirements are forcing the country’s savings institutions to cut costs and shut branches. Germany still has more banks than petrol stations, but the shift is helpful, and may benefit big lenders like Deutsche Bank and Commerzbank.
Zimbabwe takes monetary lunacy to the next level 22 May 2017 The African state suffered hyperinflation in 2007 after paying bills by printing its own currency. A decade on, it is doing so by printing U.S. dollars instead. The idea of conjuring foreign currency from nowhere with the tap of a keyboard sounds too good to be true – and is.
Time for UK to lose timidity on taxing property 22 May 2017 Theresa May has backed down on a so-called “dementia tax” following a backlash against older Britons using their homes to fund social care. How much the state should subsidise these costs is up for debate. But unearned housing equity should be taxed more.
Clariant-Huntsman tests formula for big M&A 22 May 2017 The $14 bln Swiss-American chemicals merger stacks up strategically, is fairly priced and could create $2.6 bln in post-tax savings. Yet the market initially factored in only half of the upside. The unpredictability of antitrust vetting and U.S. politics may explain the gap.
Two Irans go in different directions 22 May 2017 Reformist Hassan Rouhani was re-elected president in a landslide victory over hardliners. At the same time, U.S. President Trump placed the country firmly back into the “axis of evil”. The former ought to make Iran more investor-friendly, but it’s the latter that will shape its destiny.
Spain is beginning to look more like Italy 22 May 2017 Pedro Sanchez’s unexpected victory in Socialist primaries could weaken the already fragile minority government. The risk of a crisis is low, but a more fragmented parliament, similar to Italy, makes economic reforms harder, and undermines Spain’s call for European integration.
Clarity missing from SoftBank’s $100 bln Vision 22 May 2017 Japanese maverick Masayoshi Son has closed the first round of his huge tech fund. If he can find more gems like Alibaba, this could be a bonanza for SoftBank investors. For now, he has kept them in the dark without crucial details on everything from fees to profit sharing.
Saudis place $20 bln bet against U.S. dysfunction 21 May 2017 The Kingdom's pledge to Blackstone may turn into $100 bln of firepower aimed at upgrading American infrastructure. The problem is finding states and cities that want private cash. Riyadh will need a lot more patience than with its equally huge SoftBank-led tech venture.
OPEC caught in vicious Permian cycle 19 May 2017 As President Trump heads to Saudi Arabia, the oil cartel looks set to extend production cuts. It may buoy prices and keep drills running. But efficient U.S. wells in the Permian and elsewhere will benefit most, limiting increases. It’ll be hard for OPEC to regain the upper hand.
ECB snared by bond-buying ambiguity 19 May 2017 European lawmakers have called for more transparency from the European Central Bank over its corporate bond purchases. The demands are flawed: the ECB discloses quite a lot and clarity can backfire. Yet it’s a reminder of the risks from central banks meddling in private credit.
Active-passive battle will end in ceasefire 19 May 2017 Index-trackers are eating into traditional investment managers' business – and could soon own half of U.S. equities held in funds. Even so, managers can find refuge in some places, like emerging-country debt. Shrinking market share may also help active investors outperform.
Theresa May’s manifesto leaves Brexit wiggle room 18 May 2017 Britain’s Tory party will slash migration and quit the EU without a deal if need be should it win a June 8 election. But its leader has left herself room to make Brexit very hard or relatively soft. That’s artful, but ensures adherents of one or the other will be disappointed.