SoftBank and Saudi pump fresh air into tech bubble 14 Oct 2016 Masayoshi Son's group and Saudi Arabia are plotting a $100 bln tech fund. That incredible sum could finance some huge LBOs, or inflate startup valuations again just as other investors start to fatigue. Even if Son casts his net very wide, it will be hard to stay disciplined.
Essar sale points to no taboos in bad-debt fight 14 Oct 2016 A $12 bln-plus sale of Essar Oil to the U.S. sanctioned-Rosneft and others would be a milestone in India's effort to clean up balance sheets. Not long ago it was hard to imagine banks could turn the screws on tycoons like the Ruia brothers. Lenders have a rare reason to cheer.
Viewsroom: Samsung’s fiery future 13 Oct 2016 Cancelling production of its self-combusting Note 7 smartphone puts the company's reputation as well as $17 bln or more at risk. Cities, businesses and investors are putting Trump and Clinton to shame on climate change. Plus: Brexit politics get shaken up by the pound's decline.
German labour law not so bad, unless you’re a bank 13 Oct 2016 Only in Venezuela and China is it harder to sack workers. Teutonic industrial companies have learned to cope and job creation is booming. The only catch is that Germany’s labour-friendly rules are ill suited to the generous pay and hire-and-fire culture of global finance.
Cox: Amsterdam has first-world financial dilemma 13 Oct 2016 The city that invented the stock exchange and multinational may be Europe's ideal post-Brexit banking hub. Beyond fears about traders' Ferraris clogging bike lanes, however, Amsterdammers will need to overcome a bonus cap. This is where populism may win out over Dutch pragmatism.
ING’s partial London confidence vote stacks up 13 Oct 2016 The Dutch lender is moving 60 staff to the UK capital even as Brexit fears push rivals to ponder leaving. London's financial centre status and talent pool remain big draws. And by relocating only execution-focused traders rather than sales staff, ING caps its downside.
British retailers have leverage over Unilever 13 Oct 2016 The maker of Dove soap wants supermarkets like Tesco to pay more for its goods as the pound weakens. They can’t easily pass that cost on to shoppers. Grocers have two reasons to play tough: Unilever's 15 pct operating margin, and their access to the consumer.
BoE’s credit bazooka is misfiring – again 13 Oct 2016 Bank of England Governor Mark Carney’s corporate bond-buying programme is failing to lower company borrowing costs. As in 2009, the bank can be accused of not being aggressive enough. Then again, Prime Minister Theresa May’s lukewarm support doesn’t help.
Specter of Trump scares open Western purse strings 12 Oct 2016 Spooked by growing populist backlashes, politicians are promising to boost spending. Sensible investments in infrastructure and education are overdue, but will take years to pay back. With debt at record levels, central banks will need to help pick up the tab.
Saudi can’t have cheap oil and a war in Yemen 12 Oct 2016 The kingdom's fight against Houthi militants in Yemen is a burden on finances strained by cheap crude. Persisting with its expensive military adventure may require Riyadh to let oil prices rise further. Otherwise real-world battles may spill over into the economic kind.
Deutsche gets cautious vote of creditor confidence 12 Oct 2016 The German bank is issuing expensive debt. That shows it can access markets, despite a feared $14 billion U.S. fine. It's less powerful a signal than buying it back, as Deutsche Bank did in February, but at least shows investors don't fear losses that could eat into senior debt.
Ericsson’s poor strategy rings in fresh pain 12 Oct 2016 The Swedish telecom company's dividend is at risk after third-quarter operating income slumped more than 90 percent. Industry peers are also exposed to falling demand for mobile network kit. But Ericsson has cut costs too slowly and embarked on misguided diversification.
BASF’s caution beats Bayer’s chutzpah 12 Oct 2016 German chemical giant BASF stayed on the fence when rival Bayer splashed out $66 bln for Monsanto. Since May, BASF's value relative to the DAX index has risen, while Bayer has lost twice as much. Better-than-expected quarterly results make BASF look doubly smart.
South Africa is making the worst of a bad job 11 Oct 2016 State prosecutors have told Finance Minister Pravin Gordhan to appear in court on fraud charges, just days after he is supposed to deliver a budget to ease fears about a credit-junking. Such antics needlessly exacerbate Pretoria’s economic problems – including a sliding rand.
VTB snub only hurts UK if American banks follow 11 Oct 2016 Russia's second largest lender may pull investment bankers from London because of Brexit. But VTB's existing base in Vienna is unlikely to suit other big banks. And the Wall Street giants London would actually miss are unlikely to make big logistical decisions in a hurry.
UK gilts face growing array of threats 11 Oct 2016 Ten-year government bond yields have doubled from record lows within two months. Rising inflation expectations partly explain the waning influence of Bank of England asset purchases. A bigger risk is that pension funds and life insurers could become less captive buyers of gilts.
Britain faces uphill battle taming gig economy 11 Oct 2016 About 14 million UK workers do a new type of casual, no-strings job. Business likes the looser arrangements, but so too do most giggers. With workers’ rights a priority, Theresa May will struggle to address the downsides of the new age without hitting some of its benefits.
Osram illuminates flaw in German takeover laws 11 Oct 2016 A potential Chinese bid for the lighting group is feeding concern about foreign tech takeovers. No national interest is at stake here and domestic ownership was no bar to job cuts. Other deals may be more ambiguous. Germany lacks a proper framework to address future challenges.
Robots offer blueprint for Chinese M&A in Germany 11 Oct 2016 China's Sanan is circling Osram, the $7 bln lighting firm backed by Siemens. The recent takeover of Kuka, a German robotmaker, could be a precedent. That suggests Sanan needs to offer job guarantees and other concessions to keep Berlin onside, as well as a big premium in cash.
Apollo finds a line yield-seekers won’t cross 10 Oct 2016 Leon Black's buyout shop yanked a 500 mln euro debt issue for French bottle maker Verallia after investors balked. They disliked that they might be paid in more debt while Apollo returned itself some cash. Brexit, Trump and ECB fears finally are rousing bond buyers to push back.