Trump’s Flynn scandal has many corporate analogues 14 Feb 2017 Like messes that roiled firms from Wells Fargo to Valeant, the furor over the national security adviser's misleading statements over Russia point to a common problem: the management style of the CEO. The commander in chief has much to learn from real public-company bosses.
Rolls-Royce is on a slow flight to recovery 14 Feb 2017 The UK engine maker’s record 2016 loss of 4.6 bln pounds masks a better-than-expected underlying performance. Turnaround boss Warren East has limited scope to deliver more positive surprises. New engines are sold at a loss, and revenue for servicing them will take time to rise.
Credit Suisse lure just visible beneath the warts 14 Feb 2017 The Swiss bank's socking 2.3 bln Swiss franc fourth-quarter loss followed a charge to settle U.S. mortgage litigation. Equities trading and Asian investment banking were dismal. But private banking and balance-sheet resilience favour Credit Suisse's stock over richer-priced UBS.
OPEC’s solidarity points to longer production cuts 14 Feb 2017 The cartel has taken two steps forward and one step back. Compliance with output cuts is narrowing the gap between supply and demand, but it is also encouraging U.S. producers to drill more wells. Sustained higher prices may require even more restraint to keep the market balanced.
Prada can grow into frilly valuation 14 Feb 2017 An investor who bought shares in the Italian luxury company's 2011 flotation is 12 percent worse off today. But the slide in Prada’s sales is slowing. If China recovers and the handbag maker makes up lost ground online, its sky-high price-earnings ratio will look more fitting.
Allergan adds ice and a slice to M&A cocktail 13 Feb 2017 The drug company is paying $2.5 bln for Zeltiq and its diet-avoiding, fat-freezing tech. It sounds a wackier play than the dozen deals Allergan struck last year. But vain customers pay cold cash for the treatment, making it less speculative than other deals, like gene therapy.
Switzerland shoots itself in foot on tax reform 13 Feb 2017 Voters rejected a government plan to balance low corporate rates with global reforms. That might make sense if international cooperation on tax fails. But the Swiss are mainly hoping to avoid higher personal taxes. If multinationals flee, these will happen anyway.
Hadas: How the liberal economy got lost 13 Feb 2017 As President Trump puts his promises on trade and migration into noxious practice, cowed elites are debating how their ideas failed. The big causes are forgotten history, ideological hubris, bad finance and excessive self-interest. Fixing those flaws is essential to any revival.
Body Shop buyout risks being far from fragrant 13 Feb 2017 L’Oreal is mulling a sale of the UK cosmetic chain. Higher margins at L’Occitane imply a buyout firm with retail nous could squeeze out more profit. But the chain’s fading appeal means its new owner would be just as likely to take a bath – and not a nicely scented one.
Bidding war over Stada will be far from generic 13 Feb 2017 The German pharma company has two takeover offers, including one from private equity firm Cinven. Cutting costs or breaking up the group could create value. However, a new management team has yet to tackle low growth. Potential bidders will be loath to pay too big a premium.
Buying Co-op Bank calls for leap of faith 13 Feb 2017 The troubled UK lender has put itself on the block despite saying it is short of capital. Viewed generously, the underlying Co-operative Bank might be worth 200 million pounds. But any scale-hungry peers would have to overlook legacy problems that militate for a discount.
EU has too much to lose in global finance gunfight 10 Feb 2017 European Commissioner Valdis Dombrovskis has hinted at reprisals if other states raise barriers for EU-based financial groups. Brussels could in theory slap higher capital demands on foreign banks, and restrict euro clearing. But aggression would hurt it as much as its new foes.
China will make or break Reckitt’s $17 bln deal 10 Feb 2017 The cleaning products-to-condoms group is paying $90 a share in cash for baby formula-maker Mead Johnson. Cost savings only cover about half the $3.8 billion premium. Whether it can make up the balance will depend largely on boosting sales in the People's Republic.
Investors can hitch a ride on Renault’s recovery 10 Feb 2017 After last year's record sales and profit growth, the French carmaker has pledged to lift margins close to the levels enjoyed by premium rivals by 2022. Even if CEO Carlos Ghosn is being overly optimistic, Renault's lacklustre valuation looks increasingly hard to justify.
Euro risks replacing sterling in FX doghouse 10 Feb 2017 The battered pound has won a reprieve as post-Brexit growth is proving more resilient than investors had anticipated. By contrast, the euro's star is waning before France's unpredictable elections. Options prices signal that the single currency could become traders' next victim.
Michael Dell holds good hand in KKR poker game 10 Feb 2017 The IT entrepreneur has built up a 10 percent stake in German consumer research group GfK. It's a punt that a tender offer by private equity group KKR will succeed, paving the way for a much-needed restructuring. For all the risks, Dell has a decent chance of tripling his money.
Viewsroom: Keeping banks in the sin bin 9 Feb 2017 President Trump wants to "do a number" on post-crisis financial reforms, but overturning them will be tough. Paris emerges as the top city for financial types after Brexit. Plus, why a legal brief filed by Google and others against Trump’s immigration ban is such an unusual move.
Investment drought is about more than spreadsheets 9 Feb 2017 Companies’ reluctance to invest is one of the main conundrums facing policymakers. A new Bank of England survey suggests old habits and crisis memories play a bigger role than any shortage of finance. It’s another reminder that loose monetary policy can only achieve so much.
Mediobanca can plan lengthy stay in shop window 9 Feb 2017 The Italian bank's financials are solid yet its future is in doubt if Generali, in which its holds a 13 pct stake, is sold. Mediobanca's simplest plan would be to sell itself to a larger bank. But Plan B, in which CEO Alberto Nagel focuses on his own deals, looks more promising.
SocGen gets stress test joker with asset shuffle 9 Feb 2017 The French bank is buying an insurer for 500 million euros and will list part of its car leasing unit. Societe Generale wants to grow each business. But with stress tests kinder on insurance than banking, and auto loans treated fairly harshly, there could be a secondary benefit.