Capita faces trifecta of debt, delay and doubt 29 Sep 2016 The UK outsourcing company is finding out investors don’t like surprises in a usually predictable industry. Delays in a big Transport for London contract and post-Brexit jitters could see profit before tax be 13 percent below its target, and make its balance sheet look strained.
Bedroom musicians may amplify Spotify profit issue 29 Sep 2016 The Swedish streaming group is in talks to buy SoundCloud, a site where amateur musicians upload songs for free. It would bring 175 mln monthly listeners and additional industry clout. But buying a loss-making group might not help Spotify address its key goal: turning a profit.
Output deal buys OPEC time but not deliverance 28 Sep 2016 The oil cartel surprisingly agreed to cap production but has deferred agreement on which members will reduce the flow of crude. Limiting daily output to 32.5 mln barrels should support global prices for now. A lasting plan to balance supply and demand, though, may remain elusive.
German airlines leave logic in the ejector seat 28 Sep 2016 In most sectors, a heavily loss-making company with liabilities that exceed its assets would disappear. Yet German carrier Air Berlin is still airborne, and Lufthansa may take on a chunk of its fleet. Aviation bosses continue to think they can defy financial gravity.
Past mortgage fines give Deutsche room for hope 28 Sep 2016 Settlements by other banks imply the German lender owes up to $5.5 bln for mis-selling mortgage-backed securities. That's much less than the $14 bln the U.S. government wants. But a previous Deutsche fine was much bigger than rivals'. Calculating penalties is an inexact science.
Anglo-German mail merge delivers value both ways 28 Sep 2016 Deutsche Post is paying 243 million pounds for UK Mail, in a play for the British e-commerce market. The target's shares have spent a year in the doldrums after problems at its new automated hub. But a 43 percent premium makes the purchase look less opportunistic.
Italy can be bolder with its budget laxity 28 Sep 2016 Rome will delay its deficit goal next year, citing emergency factors like refugees. Brussels may quibble, but Italy needs growth, and a fiscal crunch could hurt Prime Minister Matteo Renzi's chances in a critical referendum. The leeway is too modest and fleeting to ensure either.
Iran’s upper hand in OPEC could be fleeting 28 Sep 2016 The Islamic Republic's resistance to an oil deal leaves its rival Saudi Arabia stuck with low prices. Yet that is pushing Riyadh to launch necessary economic reforms, which should make the kingdom more competitive. Iran, despite its current rapid growth, risks falling behind.
StanChart picks bad time to test U.S. patience 27 Sep 2016 The emerging markets bank has referred charges of wrongdoing at one of its private equity portfolio companies to authorities. After facing the rap for sanctions abuses in 2012, StanChart is on probation in the U.S. It's a risky situation in such a politically charged atmosphere.
Dutch food IPO has a German fly in the soup 27 Sep 2016 Meal delivery website Takeaway.com is seeking 350 million euros in an IPO. Revenue is growing rapidly, but so too are losses. Investor appetite for a sales valuation in line with profitable Just Eat rests on whether it can dominate the tough German market.
Deutsche Bank has airbags – but only one matters 27 Sep 2016 The German lender’s market value has shrunk below 14.5 bln euros on fears of big fines. Yet markets seem calm about knock-on effects. It’s less that post-crisis bank rules are fit for purpose, and more that Chancellor Merkel would have to be brave or foolish to let Deutsche fail.
UniCredit fire sale need not destroy its returns 27 Sep 2016 The Italian bank is selling its most profitable assets to plug a capital shortfall. New CEO Jean-Pierre Mustier can recoup some lost earnings by cutting costs. Even then, UniCredit's returns might not exceed its cost of equity - but they would be a good bit better.
HSBC CEO role calls for a superbanker 26 Sep 2016 The sprawling $150 bln bank has its work cut out to replace CEO Stuart Gulliver. The job requires a multitasker who can manage huge workforces, is compliance savvy, an expert in finance, and has the knack of being able to appear in several places almost at once.
Dubai could create its own demographic dividend 26 Sep 2016 The emirate has weathered low oil prices, but an unbalanced workforce means it is missing an economic opportunity. Only one in 23 active workers is a local, official data suggests. If Dubai can't turn citizens into workers, it might as well turn skilled workers into citizens.
“Hard Brexit” less bad than hard uncertainty 26 Sep 2016 London’s financiers are fretting that the UK may advocate a clean break with the EU. That would hurt the City, but at least banks could plan to move elsewhere. For now, the problem is that the final result could still be benign - so there’s a big risk of jumping the gun.
RWE gives masterclass in financial alchemy 26 Sep 2016 The troubled German utility is listing a minority stake in its healthy parts - grids, renewables and retail. Nothing will change much operationally. Yet the company hopes the spun-off part, Innogy, will have twice RWE's market cap. If that sounds illogical, that's because it is.
Japan has most to lose from global trade backlash 26 Sep 2016 The country is begging America to ratify the TPP trade pact and urging Britain to handle Brexit carefully. The desperate pleas reflect Japan's outsized reliance on international trade. TPP also helps Prime Minister Shinzo Abe shake up the domestic economy, especially in farming.
Review: The bad and good of a world without work 23 Sep 2016 Will robots liberate everyone from boring labour, or will they make many workers redundant? Ryan Avent's "The Wealth of Humans" suggests they could do both. So it's up to governments to find new ways to share out the benefits. Past experience suggests this will not be easy.
Corbyn is global symbol not of rage but confusion 23 Sep 2016 The UK Labour Party leader, facing re-election this weekend, has split the left in two. Divisive figures like Jeremy Corbyn and Donald Trump reflect a new difficulty in identifying heroes and villains. An old foe, globalisation, is in retreat, yet perceived inequality persists.
Hadas: Central banks play with monetary absurdity 23 Sep 2016 Monetary authorities have taken recourse in increasingly empty promises. The Bank of Japan's Haruhiko Kuroda has taken this verbal drama to a new and ultimately dangerous level. Central banks could rely on deeds, not words, if their tools and targets were more realistic.