MPS solution requires further bondholder sacrifice 7 Dec 2016 The Italian bank has secured a fifth of the 5 billion euros it needs in new equity by turning some bonds into shares. The priorities are to protect retail depositors and attract outside investment. Institutional investors, and Brussels, will both have to give a little.
New Linde CEO’s mark of success will be redundancy 7 Dec 2016 The German industrial gases group has named corporate veteran Aldo Belloni as its new chief executive. His main challenge is to secure a $65 bln merger with Praxair. New concessions by the U.S. rival and less sceptical Linde unions improve his chances of doing away with his job.
French bond rot has capacity to spread 7 Dec 2016 Gallic bonds are trailing euro zone peers. This suggests investors are worrying that the far-right's Marine Le Pen might do better in the 2017 presidential elections than polls show. Were her chances to improve materially, market damage would quickly spread across the region.
Credit Suisse realism does investors little good 7 Dec 2016 The Swiss bank has scaled back its targets for pre-tax profit and balance sheet strength. Boss Tidjane Thiam may have averted another equity hike, but only just, by finding 1 bln Swiss francs in new cost cuts. And his new, more muted vision puts the bank's dividends in question.
City of London should woo not threaten on Brexit 6 Dec 2016 A bad-case Brexit might demolish some of the financial sector's record 71 bln pounds in tax contributions, outlined in a new report. Other bits of the economy could also suffer from the fallout. But bankers might gain more from an upbeat case for their salvation.
E.ON brinkmanship gets rewarded in court 6 Dec 2016 Germany’s constitutional court has ruled in the troubled utility’s favour over an 8 bln euro compensation claim following the government’s U-turn on nuclear power. A payout should ease E.ON’s balance sheet headache and vindicate its decision to delay a much-needed capital hike.
UK regulator makes brokers feel like their clients 6 Dec 2016 The FCA is set to cap leverage punters can take when spread-betting. It shouldn’t have been a shock given EU peers had questioned a product in which 80 pct of clients lose money. Brokers’ 30 pct share falls imply they suffer from the same mindless optimism as their customers.
Greece turns from Sisyphus into Hercules 6 Dec 2016 Euro zone lenders agreed to rejig some of its debt, which adds to the likelihood that future financial support isn’t just good money thrown after bad. Greece is no longer pushing a rock up a hill, but some pretty hefty tasks still stand between it and economic recovery.
Brexit Supreme Court case is a sideshow 5 Dec 2016 The UK's top court may force the government to give parliament a say on triggering Brexit. Yet this wouldn't necessarily change Prime Minister Theresa May's plans much. Two related legal matters - including whether the exit process is reversible - might provide firmer resistance.
Bank clean-up opportunity is Italy’s to waste 5 Dec 2016 The failed referendum need not cause a crisis if UniCredit completes its rights issue and fellow lender MPS can be quickly stabilised. Political turmoil and weak growth, though, could push up bad loan levels. A new "bad bank" would help, but political will may be lacking.
Coach passes Burberry’s new CEO heavy baggage 5 Dec 2016 The UK trenchcoat maker has reportedly spurned takeover approaches from its U.S. rival. Burberry could fetch 8.1 bln pounds with a premium. New boss Marco Gobbetti doesn’t start until next year. His first task will now be to show why going it alone is the better option.
Abject RBS gives handy $1 bln show of legal pluck 5 Dec 2016 The UK bank's deal with three out of five groups suing over a 2008 rights issue comes after stress tests branded it class dunce. RBS already has the 800 mln pounds offered. Although holdouts should still go to court, it's a timely reminder that the worst may not materialise.
Italy’s vote is for uncertainty but not for crisis 4 Dec 2016 Matteo Renzi resigned as prime minister after losing his constitutional reform referendum. The immediate challenge facing his successor is to make sure banks in need of capital still get it. Longer term, Italy will hobble on without the change-minded strong government it needs.
Austria’s “nein” to far-right buys time for reform 4 Dec 2016 The presidential election ended in a clear defeat for Norbert Hofer's Freedom Party. Chancellor Christian Kern has just under two years to deliver a "new deal" including lower tax and more infrastructure spending. His right-wing opponents have taken a knock, but remain strong.
S&P’s sleight of hand is South Africa’s gain 2 Dec 2016 The credit ratings firm has downgraded the sub-Saharan state's local currency bonds but spared its foreign debt. This allows South Africa to escape junk status for the time being. Almost as important, there's no excuse now for firing respected finance minister Pravin Gordhan.
Richmond sharpens up Britain’s Brexit divide 2 Dec 2016 The victory of a pro-EU liberal in a UK local election hints at a potential swing back to the centre. Stronger opposition could keep the government honest as it negotiates Brexit. Yet Richmond is wealthy, and voted strongly to stay in Europe. More clarity doesn't mean more unity.
Hollande’s problem was bigger than Hollande 2 Dec 2016 France's president saved his ruling Socialist Party from electoral annihilation by saying he won't seek a second term. His flaws had become obvious. But whoever seeks the country’s highest office faces the same challenge of reconciling modernisers with those opposed to reforms.
Daily Mail submits a vague New Year’s resolution 1 Dec 2016 The UK tabloid's parent wants to slim down a portfolio which spans media, events, education, and property information. Weak advertising makes a new svelte form a priority. But if boss Paul Zwillenberg doesn't offer more detail the pledge could end like many post-Christmas diets.
Politics hampers delivery of good postal bid 1 Dec 2016 Belgium's Bpost has made a final offer of 2.5 billion euros for Dutch rival PostNL. The deal is a play for the fast-growing parcel business. With the target's shares trading below the offer, Dutch government opposition may scupper delivery of a good deal for investors.
Europe’s long weekend presents a triple threat 1 Dec 2016 In the space of just 48 hours Italy's premier will face a make-or-break referendum, Austria could elect a far-right president, and Greek debt talks will reach a head. All three have the potential to revive the centrifugal forces that could send Europe spinning out of control.