Carney delays Bank of England exit by bare minimum 31 Oct 2016 The governor is staying until mid-2019. That's a year longer than originally planned but two short of a full term. Facing down critics who were calling for his head confirms the central bank's independence. But the debate about its post-Brexit status has only been postponed.
Hexagon CEO probe adds to Swedish governance murk 31 Oct 2016 Norwegian authorities have detained the $13 bln Swedish IT company's boss, Ola Rollen, for suspected insider trading. Rollen, who denies the charges, has grown Hexagon's market cap over 50-fold. After misdeeds at the likes of Swedbank, local scandals are no longer even a shock.
Hadas: The left behind can’t blame globalisation 31 Oct 2016 Has the rise of cheap labour in poor countries harmed unskilled workers in rich lands? Sure, but it’s a new twist of an old story - technological unemployment. Even though the problems are fairly easy to solve, governments continue to fail many of the latest losers.
South African U-turn on Gordhan is Pyrrhic victory 31 Oct 2016 The rand has recovered after the national prosecutor dropped fraud charges against the finance minister. Relief that Pravin Gordhan will stay on to repair the stuttering economy may be short-lived. The case has revived concern about political interference in state institutions.
Britain better off if Carney stays 31 Oct 2016 The governor’s tenure has become a test of the Bank of England’s status. If he left in 2018 the decision would spook foreign investors and embolden the bank’s domestic critics. Extending his term would signal that the British government still values independent monetary policy.
Saint-Gobain loses either way in Sika fight 31 Oct 2016 The French materials group's two-year effort to sneak control of a $9 bln Swiss chemicals maker by buying a 16 pct super-voting family stake has hit a new legal setback. Saint-Gobain could keep trying or make a proper offer - but giving up would be better for its shareholders.
UBS probe neatly captures Hong Kong market dilemma 31 Oct 2016 Regulators are looking into UBS's role in local IPOs. Whatever the outcome, it epitomises a clash between lofty governance goals and too many banks chasing sometimes questionable listing candidates. Long-term, global institutions would gain from taking the high road.
Review: UBS whistleblower sounds cautionary note 28 Oct 2016 Bradley Birkenfeld helped expose tax evasion at the Swiss bank, landing it with a big fine. He was put in jail but also collected a $104 million reward. As Wall Street braces for more penalties, his memoir outlines the perils facing whistleblowers – and those who listen to them.
RBS dividends depend on finding branches saviour 28 Oct 2016 The UK bank says several parties are in talks to buy its Williams & Glyn network. This millstone was responsible for a 301 mln pound charge in the third quarter. Without it, Royal Bank of Scotland’s capital base looks strong enough to weather all but the biggest legal bills.
Britain’s Brexit airbag can’t cushion everyone 28 Oct 2016 Nissan’s UK plant will get state help if its competitiveness is harmed by Britain leaving the EU. Offsetting potential tariffs is unorthodox, but feasible and not especially expensive, even if rolled out to the whole industry. But picking winners also means picking losers.
Spanish banks ready for a subdued fiesta 28 Oct 2016 Despite fair economic winds, results from Santander, BBVA and their peers showed a squeeze from low rates and competition for scarce borrowers. Yet the bottom looks near. Banks are focused on costs, lower bad loan charges and capital. All three are headed in the right direction.
Higher global bond yields have solid foundations 28 Oct 2016 The recent rise in benchmark yields is not as dramatic as last year’s surge - but far more significant. Last year market quirks played a big role. This time the drivers are expectations for higher inflation and stronger growth. These are harder for investors to brush off.
UBS ban in Hong Kong would compound terrible year 28 Oct 2016 The Swiss bank says a probe into some IPOs might put its corporate finance business in the Asian city on hiatus. UBS is struggling in Hong Kong, and has slid down the league tables. With third-quarter results showing global fees down more than rivals, this comes at a bad time.
No cure for Big Pharma’s diabetes problem 28 Oct 2016 Sanofi and Novo Nordisk’s earnings from diabetes drugs are collapsing. Financial remedies are scant. Novo is cutting costs and scraping investment, while Sanofi is buying back shares and prowling for acquisitions. At least the latter’s stock is already cheap.
Resilient UK growth adds to policymakers’ quandary 27 Oct 2016 GDP rose by 0.5 pct in the third quarter as the economy barely broke its stride after Britain voted to leave the EU. The good news makes it harder for the government and Bank of England to justify a hefty stimulus. But if things do get worse their response may come too late.
Volkswagen is painting over its rust spots 27 Oct 2016 The troubled $71 bln German carmaker reported a surprising 17 pct increase in quarterly operating profit and a better outlook. Yet the improvements owe more to accounting small print than better operating performance. At least the group's cash cushion is still expanding.
GE plays tactical hardball with Elliott 27 Oct 2016 The U.S. industrial firm is feuding with the hedge fund over two 3D-printing companies. It refused to cave in to Elliott on one, opting for a rival instead, and raised its bid on the other. This is a decent enough compromise and will stop activists from seeing GE as easy prey.
Telefonica finally faces up to debt reality 27 Oct 2016 The Spanish telco has sensibly cut its dividend and abandoned strict leverage targets. Though the payout may still be too high, the reduction eases the pressure to complete difficult asset sales. Telefonica can now focus on its operations, where cashflow is growing nicely.
Fair winds not enough for Deutsche and Barclays 27 Oct 2016 The European banks gained from Wall Street’s bond trading fervour in the third quarter. But legal costs dragged return on tangible equity down to 2 pct at Deutsche and 3.6 pct at Barclays. The UK lender has fewer troubles than its German peer, but both need good times to last.
Guest view: Oil market needs a “swing consumer” 26 Oct 2016 The oil market is broken. Volatile prices undermine global energy security and increase geopolitical risk, while OPEC seems unable to co-ordinate a cut to supply. There is a solution: focus on demand rather than supply. What’s needed is a “tactical petroleum fund”.