Property gives Britain first post-EU stress test 5 Jul 2016 Standard Life’s 2.9 bln stg UK property fund blocked redemptions after too many investors wanted out. Something similar happened in 2007-08, after which real estate values fell 40 pct. The property market is stretched, as it was then. Hopefully the financial system is more solid.
China’s M&A spree will face growing backlash 5 Jul 2016 German politicians are the latest to get jittery about a Chinese takeover bid. In the absence of global foreign investment rules, countries can block deals they don't like. China's reluctance to open its markets means surging cross-border acquisitions will spark more resistance.
Japan’s carmakers are passengers in wild FX ride 5 Jul 2016 Shares in Toyota, Nissan, Honda and others have crashed since Britain voted to quit the EU. All will be hit by an economic slowdown, and some would suffer from new tariffs on UK-made vehicles. But the selloff mostly reflects how exposed the firms are to currency-market swings.
Sainsbury’s finds super-cheap isn’t super-cheerful 4 Jul 2016 The UK grocer will close the Netto brand of low-cost supermarkets that was meant to challenge Lidl and Aldi. Budget food retail is set to grow 40 percent over the next five years. But the bigger retailers don't necessarily need to join the discounters to beat them.
ECB picks bad time to give Monte Paschi good slap 4 Jul 2016 The EU bank regulator wants the Tuscan bank to sell bad loans quicker. It's right, but MPS could need capital. That may require a politically contentious bail-in of Italian creditors, or Brussels to cave in to Prime Minister Matteo Renzi by watering down state aid rules.
The declaration of independence from Europe 4 Jul 2016 It's 2076, and researchers finally gain access to Boris Johnson's private archives. They find a printed document bearing scribbled annotations made in 2016 by the American-born former London mayor, politician and campaigner for Britain's exit from the EU. Here are excerpts.
Credit Suisse special pay looks less than special 4 Jul 2016 The Swiss bank last year trebled extra awards it makes to hire or retain star recruits. The boost partly fits the change in management and compensation philosophy under boss Tidjane Thiam. Still, too many were given too much at a time when industry profitability is wilting.
Abu Dhabi $29 bln banking merger looks after No.1 4 Jul 2016 National Bank of Abu Dhabi - and the emirate's government - get a slight advantage in a merger with First Gulf Bank. Yet synergies leave both better off. The all-share deal will create the largest lender in the UAE and an institution capable of competing with foreign rivals.
UK’s tax cut goal: calm business, scare Brussels 4 Jul 2016 George Osborne has plans to cut the UK's already-low corporate tax rate to near-Irish 15 pct levels. It might stop domestic business jumping ship post-Brexit. But the prospect of a tax haven UK also acts as a bargaining chip to use in forthcoming exit negotiations.
Guest view: Brexit’s economic hit can be managed 1 Jul 2016 Britain's vote to leave Europe is a political problem before it is an economic one, write Giancarlo Bruno and Michael Drexler of the WEF. If politics are handled carefully, markets and investment can be calmed. A key challenge is to leave the City of London to do its job.
Britain joins China in investment limbo 1 Jul 2016 Heathrow Airport's expansion is on hold. Now the UK has voted to leave the EU, controversial or financially demanding decisions may be left dangling. There's a precedent in China, where a graft purge led to widespread dawdling. British inertia could be much tougher on growth.
London’s divorce from wider UK can only go so far 1 Jul 2016 The capital's new mayor is right to seek greater tax autonomy. But after a divisive vote in which Londoners wanted to stay in the EU, the trick is to do so without increasing divisions with the rest of the UK. Offsetting devolution with lower grants is a good place to start.
Britain tests catastrophe bounce back theory 1 Jul 2016 Doom-mongers overestimated how much the U.S. economy would suffer after Lehman's collapse in 2008 or the 9/11 attacks. Gloom about the UK leaving the EU is better judged. As Bank of England Governor Mark Carney acknowledges, policymakers face much tougher challenges this time.
Guest view: Changing the definition of growth 30 Jun 2016 It's time to reconsider the all-consuming focus on GDP to concentrate on what underpins development, argues David Cruickshank of Deloitte. Measuring social progress can help countries identify and improve the factors upon which economic stability and prosperity depend.
EU’s Italy bailout more political than prudential 30 Jun 2016 The EU has approved Italy's request for funding guarantees to avoid a bank collapse. They won't be used, and don't fill banks' capital holes. But the aid may help Prime Minister Matteo Renzi show he can do deals in Brussels – thus boosting his chances in October's vital referendum.
UniCredit plucks direction out of disorder 30 Jun 2016 The Italian bank named Jean-Pierre Mustier as chief executive, much faster than expected. The potential mess from the UK vote to leave the EU means it is not a good time to be rudderless. Mustier is internationally respected, and unlikely to shirk tough decisions.
BoJo exit is small net positive amid UK shambles 30 Jun 2016 Boris Johnson’s decision not to run as Tory leader adds to Britain’s political chaos. The next UK prime minister will most likely be EU-exit advocate Michael Gove or reluctant Remainer Theresa May. A Brexit U-turn now looks less likely - but the process could be more cordial.
Goldman’s BHS faux pas is cost of doing business 30 Jun 2016 The investment bank admitted its reputation was not enhanced advising retail magnate Philip Green on the sale of the now-bust UK retailer. Indeed it wasn’t. But courting the rich and colourful is just another kind of trade. Sometimes it brings revenue, sometimes it brings costs.
Believe bonds not stocks on Brexit damage 30 Jun 2016 Stocks have rebounded after the referendum, suggesting Britain’s prospects aren’t too grim. Yet falling gilt yields point to bleaker outcomes. In the absence of hard economic data, a post-vote slump in consumer morale supports the pessimistic thesis.
Britain’s best course of EU action is inaction 30 Jun 2016 It would be silly to push the button on leaving the European Union before Italy’s referendum in October or French and German elections in 2017. By then the UK will have more leverage, and voters a better idea what leaving looks like. Investors could be in for a dull interregnum.