Portugal’s three bad B’s: banks, budget, Brexit 22 Jul 2016 Lisbon’s banks are saddled with bad loans, and need capital. The government is caught between Brussels’ fiscal rules and a weak coalition. And the UK vote to leave the EU may hurt already grim growth. The three B’s may imperil Portugal’s BBB rating, and blow up its bond yields.
UK’s currency pounding cracks door wider for yuan 22 Jul 2016 Chinese state media have griped that last month's Brexit vote hobbles London's ability to help internationalize the yuan. But there are pluses, too. For one thing, the sterling selloff has made the free-floating democratic pound look a lot less safe next to the steadier renminbi.
Mega beer merger develops case of the shakes 21 Jul 2016 An offer of 71 billion pounds that SABMiller accepted from AB InBev in November no longer looks generous - and not just because sterling has plunged. SAB’s board still has time to push for a better deal, or at least get a second opinion.
FX market haunted by past bad behaviour 21 Jul 2016 A senior HSBC manager has been arrested for trading ahead of a big order in 2011. U.S. prosecutors’ case evokes the disregard for clients and flawed incentives that were the hallmark of past market-rigging cases. It compounds pressure on the FX market to show it has changed.
EasyJet is post-Brexit bet for the brave 21 Jul 2016 The UK airline says it doesn’t know what security scares, currency turmoil and Britain’s exit from Europe will do to earnings. The shares have fallen around 30 pct in less than a month. Yet in past downturns easyJet has snatched market share. There’s no reason it can’t again.
UK grocers pedal themselves down bumpy path 20 Jul 2016 Sainsbury's is trialling a one-hour bike-delivery service in London. A third of Britons have access to Amazon Prime Now, putting pressure on grocers to match it on speed. But with retailers struggling to make money online, being sucked into a delivery war won't help profit.
Unilever’s razor-club buy is a sharp move 20 Jul 2016 The consumer-goods giant may be paying $1 bln for Dollar Shave Club. At five times sales, that's a fair price if Unilever grows the business well. Owning a scrappy startup that has already blunted the market for pricey razors at rival Procter & Gamble's expense doubles the edge.
VW profit rebound may run out of gas 20 Jul 2016 While the emission scandal's costs are rising, Volkswagen has beaten second quarter operating profit forecasts by a mile. Successful cost cutting and rising sales point to inherent strengths. Yet a new risk looms: a possible slump in car demand due to the shock of Brexit.
UK economy tiptoes down predictably gloomy path 20 Jul 2016 A new Bank of England report hints at rising prices, risks to investment and delayed hiring plans since Britain voted to leave the EU. Even more worrying, there are reports that demand for loans is easing. This medley of problems wasn't hard to forecast, but is hard to fix.
ASML could be cousin to ARM in next tech wave 20 Jul 2016 Like the UK chip-designer Japan's SoftBank has agreed to buy, ASML is a niche but dominant player. Its tools make chips smaller and punchier. ASML would be harder to take over than ARM, but if big data and the internet of things merit the hype, it's in a good position to cash in.
Pimco’s new boss adds welcome pep 20 Jul 2016 Emmanuel Roman's contribution as head of Man Group was to make decent acquisitions and be a prominent figurehead. That should suit his new employer. There are deals to be done in asset management, and Pimco never quite filled holes left by Bill Gross and Mohamed El-Erian.
Hadas: The realist’s approach to Brexit 20 Jul 2016 It's easy to think of things Britain might want to keep if it leaves the European Union. But an alternative approach is to work out what aspects it most wants to cast off. That leads to a difficult conclusion: what the UK really wants is what it already has.
Slovenian twist puts Italy on straight and narrow 19 Jul 2016 Europe’s top court said Ljubljana was right to hit creditors when recapitalising banks. That’s unhelpful for Italian premier Matteo Renzi, who has banks to rescue but doesn’t want to punish their bondholders. He may have to play it straight, which would be no bad thing.
Monsanto may be overestimating independence 19 Jul 2016 The U.S. crop giant rejected Bayer's latest $64 bln takeover offer, calling it "financially inadequate." To achieve the $125 a share on offer on its own over three years would be tough, however, even with aggressive assumptions. Monsanto boss Hugh Grant is protesting too much.
Profit upgrade puts Zalando back in fashion 19 Jul 2016 The German online fashion retailer has calmed worries about competition from Amazon by raising full-year operating profit margin guidance by around a quarter and forecasting strong revenue growth. While shares are up by a fifth in a day, valuations can grow richer still.
The City will survive Britain’s big rift 19 Jul 2016 The UK's Brexit vote threatens London's financial hub-ness, but it would be wrong to think in simple binary terms. Even at worst, the costs to a global bank of staying on in the UK are likely to be counterbalanced by the costs of leaving. And really, it's clients who will decide.
SoftBank’s Son tests limits of investor patience 19 Jul 2016 SoftBank shares tanked after its no-synergy, $32 bln bet on UK chip designer ARM. Having just lost his heir apparent, founder Son talks about the company as if it is private and says the highly leveraged entity is "net debt zero". It takes the shine off his striking track record.
SoftBank’s new ARM may tie Sprint’s behind back 18 Jul 2016 The Japanese tech and telecom titan spent $32 bln on the UK chipmaker because it's feeling good about its U.S. wireless carrier. SoftBank's confidence confounds. Sprint is fourth of four in a maturing market locked in a price war. It's a bad time to have a distracted parent.
Nuclear subs are symbol of UK’s ebbing charm 18 Jul 2016 Renewing its ageing fleet of Trident submarines is one way for the UK to punch above its weight. It’s even possible to justify the 31 bln pound cost as a stimulus, since British companies like BAE Systems benefit. Hard power gets more alluring when soft power is in retreat.
Italian newspaper war has “man bites dog” ending 18 Jul 2016 The battle for Corriere della Sera publisher RCS has delivered a surprise outcome: a share-based offer beat a rival cash bid, and the old guard of Italian corporate finance, led by Mediobanca, got a bloody nose. Italian corporate finance is changing, but remains no less complex.