RBS takes baby step on road to U.S. redemption 26 Jan 2017 The UK bank's latest $3.8 billion charge almost doubles provisions relating to alleged mis-sellling of U.S. mortgage securities. The final cost could be far higher, since RBS is probably a year away from a settlement. Still, the extra bit of balance sheet clarity is welcome.
Syngenta forces hedgies to read Chinese tea leaves 26 Jan 2017 Investors have swung from despair to optimism over the agribusiness giant's $43 bln sale. The implied probability of ChemChina's bid for Syngenta succeeding has leapt from 10 pct to over 60 pct in a few short weeks. Beijing's involvement means extra complexity for arbitrageurs.
Italy’s Renzi has chance to stage feeble comeback 25 Jan 2017 The country's highest court has overhauled an electoral law crafted by Matteo Renzi. The ruling allows early elections, but that will be small consolation for the former prime minister. Even if he regains power, he may have to rely on a weak coalition that will enact few reforms.
Trump can teach May about the art of the deal 25 Jan 2017 A trade pact between the UK and the United States could be helpful to both. The faster it comes, the less comprehensive it would be. Yet what an accord between the two leaders might lack in scope would be made up for by the creation of a clear loser: Europe.
Santander’s constrained capital has an upside 25 Jan 2017 The Spanish bank's top and bottom lines grew in the fourth quarter, despite a slowdown at home. Santander's 10.6 pct capital ratio is improving, but looks light versus EU peers. Limited resources at least discourage it from mis-steps like buying smaller rival Banco Popular.
London bankers may dodge one-way trip to Frankfurt 25 Jan 2017 UK-based bankers accompanied by EU colleagues might still be able to advise continental clients after Britain leaves the bloc. The ruse might allow financial institutions to keep more staff in London. But both national and European laws would have to remain accommodating.
Intesa risks its halo with punt on Generali 25 Jan 2017 Carlo Messina has won investor kudos for running Italy's strongest and most profitable large bank. Splashing out on sickly insurer Generali would be the kind of dealmaking the Intesa CEO did well to avoid. A merger could bring appealing synergies, but also distinct risks.
Cox: Buy Amazon, short the euro zone, readers say 24 Jan 2017 Those are two ideas to emerge from people who attended Breakingviews predictions events in London, New York, Hong Kong and Singapore. Our audiences also anticipated a U.S. recession in 2019 and expected the family car to outlast supermarkets, television, the euro and NAFTA.
Schulz makes German election more of a contest 24 Jan 2017 The country’s Social Democrats have chosen Martin Schulz to take on Angela Merkel. The former president of the European Parliament should mount a more effective challenge to the chancellor. Yet forming a stable left-of-centre government still looks a momentous challenge.
Turkish lira will stick with FX underdog role 24 Jan 2017 Rate-setters passed up the chance to give the battered currency even a brief respite. Investors’ doubts about the central bank’s independence show how political concerns are breeding economic ones. Steep market losses can entice bargain hunters, but not when worse may lie ahead.
Brexit sceptics win battle but will lose the war 24 Jan 2017 Pro-EU campaigners succeeded in their quest to give parliament a say on triggering Brexit. The catch is that Prime Minister Theresa May will probably win a vote. Besides, her opponents would struggle to prove suboptimal outcomes like EEA membership are better than May's vision.
German pump bid lacks investor pressure 24 Jan 2017 Family-owned Busch has offered to buy the 73 pct of Pfeiffer Vacuum it doesn’t already own, valuing its rival at $1 bln. Paying a 12 pct premium to the three-month average share price is too stingy. Pfeiffer’s improving profitability and potential synergies merit a higher price.
Philips’ heart failure is a buying opportunity 24 Jan 2017 The Dutch medical kit maker says the U.S. is probing its defibrillators. While the business pulls in just 1 pct of revenue, the setback follows problems in medical imaging and the sale of specialty LEDs. Still, if Philips can exit its lighting unit briskly the shares look cheap.
Generali dark arts still allow Intesa bid 24 Jan 2017 The Italian insurer has snapped up a stake in the country’s largest bank, rumoured to be planning a takeover with Allianz. The step makes it harder for Intesa Sanpaolo to build a stake in Generali and wield influence. But as the market has noticed, it can still launch a bid.
BT’s Italy scandal is more than a wrong number 24 Jan 2017 The UK telecom found alarming levels of collusion, incompetence and fraud at an Italian business that had been closely vetted by itself and external auditor PwC. The collapse in BT’s shares – far more than the actual losses – shows a pressing crisis of trust, not just accounting.
Generali woes defy easy M&A solution 23 Jan 2017 The Italian insurer's stock jumped on talk of a takeover by German Allianz. Any deal could face antitrust challenges. A carve-up by rivals might make more sense but is still complex, and politically fraught. For shareholders, the road to value creation looks long and arduous.
UK industrial strategy needs to go big or go home 23 Jan 2017 Theresa May is right to try and revive Britain's industry - not least because its financial services cash cow is en route to the slaughterhouse. Infrastructure, exchange rates and regional stimulus would be helpful priorities. Otherwise the squeakiest wheels may get the grease.
France’s Macron is gifted risky centre ground 23 Jan 2017 The presidential hopeful looks increasingly like the lone mainstream candidate in the country's coming election. It's a huge opportunity to attract voters turned off by more radical solutions from the left and right. Yet appearing conventional carries its own dangers.
Five things Davos Man will get wrong this year 23 Jan 2017 Each January the politicians, financiers and company bosses who gather in the mountains offer a snapshot of elite thinking. However, this "Davos consensus" is often wide of the mark. From Donald Trump to Xi Jinping, here are five widely-held views that will probably be mistaken.
Calm words won’t stop bankers leaving London 20 Jan 2017 The City is a big source of UK tax revenue and the European Union's main capital market. Both sides have good reasons for a sensible post-Brexit agreement on financial services. Unless they first extend the timetable, banks will not wait for a deal before moving staff.