Chancellor: Oil prices don’t need a Doha to rise 22 Apr 2016 An agreement among feuding OPEC members to cut production may still be elusive. But the Saudis and other oil-producing nations are in no position to ramp up. As U.S. oil output is set to fall sharply this year, the price of energy is likely to keep heading upwards.
VW’s $4.5 bln emissions fine buffer feels adequate 22 Apr 2016 The carmaker has set aside $18 bln for the dieselgate scandal. Stripping out likely costs for buybacks, recalls, compensation and lawyers implies a $4.5 bln fine - just a tenth of the theoretical maximum. But at four times the industry record, it looks a reasonable base case.
Daimler’s emissions snootiness grinds to a halt 22 Apr 2016 The German carmaker has vigorously refuted environmentalists’ accusations it is another VW. Now U.S. authorities have requested an emissions probe. It’s possible that any infringements are technical, relating to disclosure oversights. But shareholders have grounds to feel edgy.
Anglo American’s pay mess is self-inflicted wound 22 Apr 2016 Over two-fifths of the mining group’s investors rejected Mark Cutifani’s pay in a non-binding vote. Anglo should be in investors’ good books: its CEO’s turnaround is working. But by offering a pay package that hedged the risk of it failing, the group shot itself in the foot.
SoftBank star just displays usual Valley flaws 22 Apr 2016 Unnamed investors have attacked Nikesh Arora, the Japanese group’s president. It’s true he is paid a lot, networks hard, and has made some punchy bets. So far, so Silicon Valley. Other charges lack bite, while hiding behind a U.S. law firm further weakens the assailants’ case.
Telefonica faces arduous Plan B 22 Apr 2016 If Brussels nixes the sale of its UK unit O2, the Spanish telco must find ways to cut its 50 bln euro debt pile. Options include finding buyers for O2 or assets like Mexico. Execution risk is high - but low rates and an improving Spanish market work in Telefonica’s favour.
Technogym IPO is fittest without luxury tag 22 Apr 2016 The Italian upmarket exercise-machine maker should net an equity value of 675 mln euros, the middle of its price range. Technogym’s valuation looks more properly benchmarked against fitness peers than the luxury sector. Softness in the new-issues market calls for safety first.
Climate deal suffering from serious water shortage 22 Apr 2016 The Paris agreement global leaders are formally signing on Earth Day doesn’t mention water once. But the world’s dirtiest industries are also the thirstiest. Cutting CO2 emissions needs wiser H2O regulation and pricing. The energy sector will be especially vulnerable.
Volkswagen hurtling into guardrail, not off cliff 21 Apr 2016 The besieged German carmaker struck a crucial deal with U.S. regulators over its dirty-diesel fraud. But the full price it must pay is still unclear. Buybacks and compensation to American drivers alone can cost $11 bln, and fines come on top. Dieselgate remains a nail biter.
Obama view on UK-EU can sway minds but not hearts 21 Apr 2016 The U.S. president, visiting London, could speak in favor of Britain staying in the EU. The big-picture economic case, in particular, is hard to dispute. But just as Donald Trump’s supporters defy logic, disengaged Brits may be ready to blow a raspberry at the establishment.
Germany should buy into Italy’s bad bank 21 Apr 2016 If the government reforms, Italy’s Atlante fund for banks’ bad debt could be a money spinner. German insurers and pensioners earn nothing on Bunds, and are already exposed to Italy anyway through ECB money printing. Atlante would be a better investment—and good politics.
Saudi’s sweet debt deal could rebound on banks 21 Apr 2016 The kingdom is close to its first international debt deal in 25 years to plug a hole in its finances caused by weak oil prices. Vast oil reserves make Saudi debt enticing, but the price slump is changing the game in several ways. And Middle East states have defaulted before.
Darty’s spiraling price tag can still go higher 21 Apr 2016 Fnac has upped its offer for the electrical goods retailer to 779 mln pounds, and added cash. Its bid is now higher than rival Conforama’s latest one, although the South Africans can probably offer more. But, after finding additional synergies, so now can Fnac.
When Mario Draghi buys, it’s time to sell 21 Apr 2016 The European Central Bank president’s promise to buy bonds has caused corporate funding costs to fall. It is also causing distortions in derivative markets. That may be a sign the programme is helping companies and investors, but history suggests the easy money has been made.
Ericsson’s Nokia-Alcatel fear rings in new changes 21 Apr 2016 The $30 bln Swedish mobile equipment maker is tinkering with its restructuring after a bad first-quarter miss. Ericsson promises no new savings, just higher costs for reorganisation this year. It looks desperate, but may help Ericsson square up to the newly merged Nokia-Alcatel.
Rome’s Atlas bank fund takes on ever bigger burden 21 Apr 2016 The Greek titan held the heavens on his shoulders. Its Italian namesake, a rescue fund, may end up with a big stake in troubled Popolare di Vicenza - which may not even be listed. The messier this bailout, the less firepower Atlas has for its other task of buying bad loans.
Google and EU fight losing battle for good reasons 20 Apr 2016 European trustbusters have accused the tech titan of abusing its dominance in smartphones by tying services together. The case is solid but a tortuous process limits deterrent value. And Google probably can justify the cost of a brawl even if it doesn’t win.
Mitsubishi is distant second in emissions cheating 20 Apr 2016 Despite tight scrutiny of regulators and environmentalists since “Dieselgate”, it took seven months for another carmaker to get caught manipulating emissions data. For now, the scope of Mitsubishi Motors’ misconduct appears smaller. VW seems really to be in a cheat league of its own.
Russia’s $50 bln Yukos victory looks incomplete 20 Apr 2016 A Dutch court has overturned an order for Moscow to compensate shareholders in the oil group that lost out from its seizure. Russia could use the money, and the positive PR. But the legal battle isn’t over, and the new ruling doesn’t address whether Yukos was fairly treated.
Pain-free post-Brexit trade deal is a pipedream 20 Apr 2016 Britain’s justice minister says leaving the European Union won’t harm trade. Michael Gove reckons the self-interest of German carmakers and French farmers will force their governments to keep the free-trade status quo. Trouble securing an EU-U.S. trade deal suggests otherwise.