Coal rally may already be out of steam 22 Sep 2016 The steel-making fuel is likely to give producers like BHP Billiton and Anglo American unexpected earnings boosts but there are few reasons to believe in a lasting rally. Weak Chinese metals demand and a potential revival in domestic supply could make gains fragile for investors.
Latest Apple rumor may vanish as fast as a McLaren 21 Sep 2016 The iPhone giant may have approached the British supercar firm. Apple, though, has made few acquisitions, even to help it pioneer smartphones. While McLaren is high-tech, it's hard to see it taking Apple's car ambitions far. Fancy can run free when a company has $230 bln of cash.
ABB breakup an option, not a necessity 21 Sep 2016 Activists are pressing the $49 bln Swiss engineer to split by selling its power grids division. But ABB would lose a business with improving margins and strong order growth. Cost cutting, plus small deals like the $930 mln sale of its cable business, may be enough for now.
Ukraine’s IMF bailout is a drop in the bucket 21 Sep 2016 The International Monetary Fund approved a $1 bln aid tranche after a year’s delay, waiving some criteria in the process. It’s a start. But the country has to overcome corruption and get back in business. An ongoing standoff with Russia makes that unusually tough.
Unilever scrubs up venture capitalist credentials 20 Sep 2016 The $136 bln Dove soap maker is buying green products firm Seventh Generation, talking with Jessica Alba's company and acquired Dollar Shave. Assimilating fast-growing niche brands with entrepreneurial cultures isn't easy. Unilever's Ben & Jerry's experience gives it a leg up.
Bayer lowers Monsanto expectations even further 20 Sep 2016 The chemical giant raised a key profitability target, assuming it closes its $66 bln purchase of Monsanto. Yet it's below what analysts might expect based on the $1.5 billion in synergies Bayer has promised. Estimates are always slippery. In this case, the synergies might be too.
GSK tries out alternative medicine with new CEO 20 Sep 2016 It's a logical move to name consumer head Emma Walmsley as the drugmaker's new chief executive. Pharma companies can learn a lot from the efficient personal care sector. Critics may see a doubling down on GSK’s HIV-to-Horlicks model, without a fix to its weaker pharma business.
Government bonds signal confusion, not cheer 19 Sep 2016 Yields on long-term sovereign debt have perked up across the developed world. Normally that's a sign of optimism. Yet borrowing costs remain ultra-low. The upward drift most likely reflects uncertainty about central bank policy and worries about the effects of negative rates.
Milk recovery sounds sour note for food producers 19 Sep 2016 Dairy Crest says higher cream prices could hit its margins, though it expects to meet full-year guidance. Sharp falls in milk prices over the past two years mean there are now fewer cows to go around. Yet as the cycle recovers, it's hard to pass higher costs on to consumers.
Where Berlin’s voters go, Germany may not follow 19 Sep 2016 Angela Merkel's grand coalition lost power in the city, while right-wing populists won their first seats there. But an easing refugee crisis, and western Germans' loyalty to mainstream parties, suggest that the 2017 national election will bring less of an upheaval.
Deutsche’s hybrid beast is partly tamed 19 Sep 2016 Fears of a $14 bln settlement have hit the German bank's Tier 1 bonds. Yet reassuringly, the effect on other banks is less than when Deutsche spooked the market back in February. The sting is that regulators may therefore be happier to inflict losses on bondholders in future.
Trading really is about survival of the fittest 19 Sep 2016 A new study finds trading prowess is linked to accurate detection of one's own heartbeat, a trait common in people with lower body mass indexes. Despite its limitations, the paper implies physiology has a profound role in markets, and that humans still have an edge on machines.
RBS legal double whammy could wreck capital return 16 Sep 2016 The UK bank faces a shareholder suit seeking up to 6 bln pounds and a U.S. fine for alleged mis-sold mortgage securities. The prospect of both cases exacting maximum pain looks remote, though the threat of a $14 bln DOJ settlement for peer Deutsche Bank raises the stakes.
Smaller fine might still force Deutsche fire sale 16 Sep 2016 The German lender insists it won't pay as much as the $14 bln proposed by the U.S. Justice Department. But even two-thirds of that amount would deplete its reserves, a Breakingviews calculator shows. Deutsche may then need to sell assets to meet rising capital requirements.
SVG holds up frail shield to HarbourVest battery 16 Sep 2016 The private equity fund fending off a hostile bid brought forward results and hinted at a better deal. That may stop investors selling to the U.S. investment group. Yet rigid UK rules, and HarbourVest's aggression, give SVG just three weeks to flesh out a tricky alternative.
Tech giants don’t grow on European soil 16 Sep 2016 The region hasn't produced its own answers to tech disruptors like Facebook and Alibaba. That leaves the EU open to accusations of sour grapes when foreign companies like Apple are targeted for unpaid taxes. Regulation and fragmented markets explain Europe's failure to launch.
Deutsche’s frailty is strength in DOJ dispute 16 Sep 2016 The U.S. Justice Department has proposed the German lender pay $14 bln to settle mortgage securities charges. Peers have negotiated the DOJ down, and Deutsche can't afford much more than half that. The bank's significant size and weak capital position may secure a big discount.
Russia’s World Cup risks a Sochi-style own goal 15 Sep 2016 Moscow is wrestling with the cost of the 2018 soccer fest. The trick with the World Cup and the Olympics is to use private funds and focus on regeneration. Russia’s ill-fated 2014 Winter Olympics implies it has yet to work this out.
How Hinkley delivers a bad deal for everyone 15 Sep 2016 The approval of Britain’s new nuclear power plant puts politics ahead of sense. Consumers could end up paying 15 bln pounds in today’s money. New ownership tests erode the country’s reputation for openness. Brexit has undermined Britain’s bargaining power.
Morrisons shows there’s life in large supermarkets 15 Sep 2016 Britain’s fourth-largest grocer has racked up three consecutive quarters of positive sales despite being an online laggard and having no fast-growing convenience stores. Operating margins have also improved. CEO David Potts is playing a bad hand well.