Actelion could give J&J hypertension 25 Nov 2016 The U.S. baby lotion-maker is reportedly eyeing the $17 bln Swiss group Actelion, a specialist in blood pressure drugs. Given the latter's high price, J&J would need big cost cuts to make the deal work. Moreover, Actelion is fiercely independent, and faces mounting competition.
Markets’ 1980s revival looks a flawed throwback 25 Nov 2016 The prospect of tax cuts and higher interest rates in America invite comparison with the era of Ronald Reagan and Paul Volcker. U.S. bond yields and the dollar have started soaring, as they did then. But the threat of protectionism makes history an unreliable guide to the future.
Too soon for Spain to be a role model for others 25 Nov 2016 The country's deputy prime minister thinks others see the domestic economy as a case study for its rapid recovery. GDP has risen and Madrid deserves credit. But with growth likely to slow and unemployment and a big budget deficit both problems, there's no room for complacency.
Britain’s productivity fund is a long shot 24 Nov 2016 As in other Western countries, output per worker is growing less quickly than before the financial crisis. There is little agreement about the reasons for the slowdown, however. That means the UK government's new 23 billion pound productivity fund is throwing darts at a board.
UK’s independent institutions face stress test 24 Nov 2016 Attacks on Britain’s official economic forecaster follow those on the judiciary and the central bank. Critiques of powerful public bodies are vital for democracy. With a growing debt and a big current account deficit, so is accepting the integrity of their judgments.
Overdue market renovations bite UK estate agents 24 Nov 2016 Letting agents’ share prices plunged as the government said it might stop tenants from being billed directly for admin fees. Agents don’t have much chance of passing those costs on to landlords. Even if the government is micromanaging, the effect will be a more efficient market.
Remy Cointreau can stay for another round in China 24 Nov 2016 The spirits group’s first-half operating profit grew 7 pct on strong U.S. and Chinese demand. Remy cut its Asian exposure after a 2012 corruption crackdown in the PRC, but now sales of posh drinks in China could beat other lines. The only catch is a recovery looks priced in.
ThyssenKrupp stumble strengthens case for breakup 24 Nov 2016 The German engineer's recovery is fizzling. Falling earnings reveal the weak case for combining elevators, car parts and submarines. CEO Heinrich Hiesinger wants to hive off steel but defends his eclectic collection of capital goods. It’s time for more radical ideas.
Ctrip pays luxury fare to see more of the world 24 Nov 2016 China's top online travel agent will buy Skyscanner for $1.7 bln in its first big push overseas. The British "metasearch" engine gives Ctrip a big base of travellers who compare prices across airlines and travel agents. Reaping sizeable benefits from the deal will be a long haul.
Brexit means UK is wise to defer budget handouts 23 Nov 2016 Leaving the European Union means lower growth and more borrowing. Dumping previous constraints enabled Chancellor Philip Hammond to invest a bit more in housing and research. Though he has wiggle room, Brexit negotiation uncertainty means there are grounds to hold back for now.
EU’s “Chapter 11” bankrupts Brexit assumptions 23 Nov 2016 Brussels wants to introduce protection for bust companies, similar to the U.S. model. British lawyers have tended to be dismissive of continental restructuring laws. If these changes go through, the UK may have to copy its neighbours to keep up. So much for sovereignty.
Generali’s cost cuts could go further 23 Nov 2016 Under pressure from low rates and Italian political risk, the insurer wants to boost operating performance. Boss Philippe Donnet is right to slash expenses to help do so. Yet hitting Generali's cost of equity implies cutting more than what is currently planned.
Markets well equipped for a post-truth world 23 Nov 2016 French builder Vinci's shares plunged after a hoax news release on Nov. 22, then mostly recovered. Markets have always been prey to the fake news and bogus rumours that now plague politics. The difference is that truth usually reasserts itself quickly in the world of money.
Deutsche chair ought to have both hands on wheel 23 Nov 2016 Paul Achleitner's likely re-election at the German lender has riled some investors. On his watch, Deutsche Bank shares have slid nearly 50 pct. A thorough if belated management overhaul earns Achleitner some credit. He could get more by ditching board roles at Daimler and Bayer.
Making pilots shareholders may save Lufthansa 23 Nov 2016 The carrier's pilots are striking to get a 20-pct pay rise that Lufthansa, dogged by high costs, cannot afford. Paying them in shares might end the gridlock. The airline would save cash, and entrepreneurial spirit in the cockpit could soften the pilots' outlandish demands.
EU unwise to play at banking tit-for-tat 22 Nov 2016 Brussels could insist foreign lenders trap more capital locally. There's logic from a stability point of view in forcing U.S. banks to do what European lenders already have to in New York. The risk is that American lenders don't see the EU as quite so integral to their business.
VW’s big-is-beautiful strategy is misguided 22 Nov 2016 The carmaker’s troubled core passenger-car brand is rightly cutting costs and focusing on newer technology, such as electric vehicles. Yet the gameplan unveiled on Nov. 22 repeats past errors by placing too much emphasis on how many cars are sold and too little on profitability.
Enel finds safety in disruption 22 Nov 2016 The Italian energy producer faces waning demand and tough competition. So it is trying to cut costs and attract customers by spending 4.7 bln euros on digitising the grid. That may be more than just jargon. Enel’s undemanding valuation at least gives it room to experiment.
Irish lack ammo in corporation tax battle 22 Nov 2016 Theresa May and Donald Trump’s plans to slash UK and U.S. corporation tax rates are ominous for Ireland. Cutting its headline rate further is toxic politically and would reduce a key source of revenue. It leaves Dublin reliant on EU access as competition for investment grows.
Sherwood exit highlights wider Goldman transition 21 Nov 2016 The investment bank’s European co-head Michael Sherwood is retiring. A brush with bust retailer BHS, while maybe not the reason, could have hindered a possible step up to CEO. In any case, Europe and fixed income, his other area of expertise, face uncertain futures.