Eurovision puts Ukraine in helpful spotlight 16 May 2016 Kiev’s pride in winning Saturday’s annual croon-fest has a downside: it has to pay to host next year’s. Russia has pointed out Ukraine has a ropey economy and a war in the east. The experience of former hosts, though, suggests there could be a return on the investment.
Saudi downgrade ought to galvanise reform 16 May 2016 A cut to its credit rating by Moody’s confirms the kingdom has taken the hard path: reform and low oil prices, with a goal of being diversified away from crude by 2030. A stronger balance sheet requires pricier oil or more reform impetus. The latter is the only real option.
Blockchain teamwork could help banks fight hackers 13 May 2016 An $81 mln central bank heist and a new attack on a commercial lender underscore the rise of cyber-related risks. The European Central Bank wants banks to log serious incidents. But industry collaboration - as seen with distributed ledgers - would do more to shore up defences.
China trade spat risks blowing out of proportion 13 May 2016 Europe’s parliament voted against granting China “market economy status” at the World Trade Organisation. Yet the move only affects potential anti-dumping defences on 1.4 pct of bilateral trade. China and its partners are attaching too much symbolic importance to the issue.
Tesco boss spies a possible bargain 13 May 2016 Dave Lewis is opting to take 75 pct of his bonus in shares. That aligns his 4.6 mln pound pay package better with shareholders, whose stock slumped last year. Since Tesco sales are now turning round, his timing may be shrewd. The group stocks a lot of things, but not hair shirts.
Tehran timidity says more about banks than Iran 12 May 2016 European lenders seem reluctant to follow U.S. Secretary of State John Kerry’s entreaties to do business in the republic. An avalanche of legal and practical banana skins hint at why. These could be surmountable - if bank bosses believe their systems are up to the job.
Carney’s Brexit forecast: fog followed by storms 12 May 2016 The Bank of England chief has warned that leaving the EU might tip the economy into recession while fuelling inflation. It’s a scary combination. The more immediate problem is that he has no real idea how much of the current economic slowdown is due to referendum uncertainty.
Bayer would risk choking on Monsanto 12 May 2016 The $94 bln German chemical giant may be mulling a bid for the U.S. seed maker. Monsanto, worth $39 bln, would need convincing. A deal pitched at a 30 pct premium is financially feasible, but Bayer would need to raise a lot of cash – and deal with clashing cultures.
Bankers and lawyers hold key to fighting graft 12 May 2016 Britain’s plan to launch a register for companies’ beneficial owners is important. Yet it only works if what’s in the register can be verified. Were watchdogs, banks and law firms tougher in checking ultimate beneficiaries’ status, dodgy deals might get snuffed out earlier.
Aegon mixes short-term pain, long-term plain 12 May 2016 The Dutch insurer saw its capital position fall after changes to its hedging strategy led to a 50 pct year-on-year fall in earnings. New solvency rules mean capital ratios will move about more. That’s not great when markets are volatile too.
RWE and DONG at opposite ends of green power shift 12 May 2016 The soon-to-IPO Danish utility DONG embraced renewable energy early. The result is strong growth and healthy returns. Late movers like German RWE are suffering badly. Its shares have more than halved in three years. Capital is leaving the old and dirty, and going into the new.
EU sets high antitrust bar for future telco deals 11 May 2016 Despite blocking the purchase of the UK’s O2, Margrethe Vestager claims she doesn’t have a one-size-fits-all approach. The UK market does have idiosyncrasies, and the antitrust tsar raised legitimate concerns. But Brussels is hardening its stance on the risks from consolidation.
UK’s own corruption safeguards less than fantastic 11 May 2016 The prime minister’s description of Nigeria and Afghanistan as “fantastically corrupt” has some basis in global graft indices. And Britain talks a good game on anti-corruption. But its recent adoption of US-style “deferred prosecution agreements” suggests no room for complacency.
Brussels O2 veto cements BT’s home advantage 11 May 2016 The EU’s antitrust tsar has rejected CK Hutchison’s 10.3 billion pound takeover of O2, because it says it would raise mobile prices. That leaves several UK players figuring out next steps. In an industry moving towards packages of mobile, landline, broadband and TV, the winner is the beefed-up BT.
Belgium may not be only loser at Draghi’s casino 11 May 2016 The small euro zone state hedged the risk of borrowing costs rising - only to suffer losses because ECB President Mario Draghi’s monetary easing drove yields down so much. Those states that ditched such hedges look smart right now. If rates go up, they will look like Belgium.
Raiffeisen’s untangling gets off to a bad start 11 May 2016 The Austrian bank may merge its foreign-focused listed subsidiary with its unlisted domestic business. But considering this has been necessary for some time, the bank has given precious little detail. The uncertainty isn’t great for a group with a thin capital ratio.
Feeble margins could stall Alstom’s speed-up 11 May 2016 The French train maker boasts a strong balance sheet, record order intake and big mid-term growth ambitions. Yet a lacklustre operating margin of 5.3 pct leaves little room to cope with intensifying global competition. Sorting this quickly should be Alstom’s key focus.
Moncler’s off-piste record deserves more credit 11 May 2016 The Italian maker of 1,000-euro puffer jackets saw revenue grow 17 percent in Q1. Despite its sales densities and profit margins being among the highest in the luxury sector, its shares trade at a discount. Exposure to one product explains why, but it’s probably due more slack.
Altice’s wily Cablevision math adds up to trouble 10 May 2016 Patrick Drahi’s telecom group told investors it can cut $900 mln in costs to justify the $18 bln U.S. cable acquisition. To appease New York officials worried about service, Altice is using a shorter timeframe to tout a $450 mln sum. Both constituencies will end up disappointed.
UniCredit’s least-bad option: sell more assets 10 May 2016 The Italian bank’s sub-par capital ratio shrank in the first quarter. Even if it parted company with its under-fire CEO, a rights issue would be tricky. Selling the likes of Poland and Turkey would make the bank less diversified, but UniCredit lacks plentiful alternatives.