UK slowdown has a silver lining for Cameron 3 May 2016 An unexpected contraction in manufacturing is the latest sign that growth is losing momentum. Usually such a slowdown would be unmitigated bad news for the government. Right now, it’s all useful PR fodder for Prime Minister David Cameron in his battle to keep Britain in the EU.
Investors treat Russia like a wounded bear 3 May 2016 Russia’s escalating anti-Western rhetoric is damaging its chances of winning back foreign investment. Shifting the blame may keep Russians distracted from economic realities for a while longer, but it can’t replace hard cash.
UBS’s golden ratio shows cuts are vital 3 May 2016 The Swiss bank is rejigging its wealth unit after trading income as a percentage of invested funds dipped to historic lows. Group return on equity was just 5.1 pct in the first quarter. UBS depends on rich folks being active. When they aren’t, the only option is to trim expenses.
HSBC and ANZ take roundabout path to stability 3 May 2016 Choppy markets and higher bad debts knocked HSBC’s pre-tax profit by 14 pct in the first quarter. Erstwhile rival ANZ slashed its dividend after first-half earnings dropped almost a quarter. The process of making banks safer and less exciting is proving far from straightforward.
Marchionne’s job upgrade bodes ill for Fiat 3 May 2016 The storied boss of Fiat Chrysler has taken over as chief executive of spun-out Ferrari, too. Leading the iconic luxury carmaker is surely the more alluring of the two jobs. Yet challenged Fiat Chrysler arguably needs Sergio Marchionne’s full attention more than ever.
BNP keeps capital catch-up plan on track – just 3 May 2016 The French bank’s revenue shrank less than costs, reversing the dynamic from the previous quarter and helping returns to improve. BNP needs profits to bring solvency in line with peers. But it would help if earnings were driven by a higher top line, not just lower bad debts.
Leicester City upends "size is everything" mantra 3 May 2016 The lowly UK soccer club has, remarkably, won the Premier League. Victory in Britain’s top division had been the preserve of a five-club oligopoly since 1992, and Leicester was a 5000-1 outsider. Businesses facing seemingly unbreakable glass ceilings have a new role model.
Aberdeen’s big problem is emerging "meh" 3 May 2016 The UK asset manager’s stock has slumped, despite a recovery in its core emerging market investment business. The good news is that outflows have slowed, and Aberdeen is hacking costs and diversifying. The bad news is that the recovery is tepid, and clients come back only slowly.
Who cares who invented bitcoin? 2 May 2016 The whole point of the cryptocurrency and related technology is that they now live a life of their own. That makes Australian Craig Wright’s claim to be bitcoin creator Satoshi Nakamoto a curiosity at best. There is, however, a caveat related to the originator’s personal stash.
Gucci misses opportunity in "hell handbag" spat 29 Apr 2016 The Italian label wants Hong Kongers to stop burning paper versions of its $3,000 handbags at relatives’ graves. While it has a point, legally speaking, Gucci’s ire is misplaced. Wanting to spend the afterlife with a Gucci handbag is the ultimate pledge of brand loyalty.
RBS sale delays hit credibility more than finances 29 Apr 2016 The part-state owned UK bank says it may miss an EU-mandated timeframe to dispose of 300 branches. Even if it takes another 12 months, RBS’s capital position should be OK. But for investors to believe the path to dividend reinstatement, it needs to avoid any missteps.
Deutsche Bank’s zeal to reform takes odd detour 29 Apr 2016 The German bank has parted company with the head of its integrity committee, following criticism of his “overzealous” approach. Deutsche has new executives and says it is committed to addressing past scandals. If so, there should be a place at the table for such ardour.
Euro zone needs better glue than Canadian kindness 29 Apr 2016 Portugal’s eligibility for ECB bond-buying hangs on the rating of Toronto-based agency DBRS. Effectively, the ECB has outsourced the decision of whether to cut off a country. It works to a point: it’s hard to imagine the ECB abandoning Italy or France whatever their ratings.
Investment is real star of strong French growth 29 Apr 2016 GDP increased by a surprisingly robust 0.5 percent in the first quarter, boosted by the biggest rise in household spending in more than a decade. Nationwide shopping sprees may just be the flipside of the frugal end to last year. The pickup in investment is far more cheering.
Private equity gets loco with pricy Spanish IPOs 29 Apr 2016 Telepizza’s dismal IPO debut joins a list of recent duds sold on the market by buyout barons. Investors in other IPOs like Parques Reunidos are getting more cautious. By pushing for high prices, buyout barons may be shooting themselves in the foot.
Too many cooks spoil UK restaurants’ broth 29 Apr 2016 Shares of the Restaurant Group, owner of the Chiquito chain, dropped a fifth after it warned of slower sales, hit by lower footfall in shopping malls. The sector is also gorging on overexpansion. New stores are opening at twice the speed of consumer spending on eating out.
VW leaves worrying set of tyre tracks 28 Apr 2016 Volkswagen’s stricken core brand is selling fewer cars for more money but at a loss. That’s an odd bunch of signals, but hints at price cuts and aggressive marketing to mitigate the fallout of its emissions scandal. At least its premium brands are picking up the slack.
Deutsche Bank upgrades from dire to depressing 28 Apr 2016 The German lender made first-quarter earnings of 236 mln euros, confounding forecasts for a loss about that size. But Deutsche’s capital position fell, return on equity was just 1.4 pct and the only bit that really beat revenue expectations was Postbank, which is on the block.
Sanofi bidding war looks expensive from the start 28 Apr 2016 The French pharma group’s $9.3 bln bid for cancer drugmaker Medivation is opportunistic and logical: the target’s shares have fallen on U.S. pricing fears, and Sanofi needs to diversify. But it’s not cheap, and other suitors lurk. Sanofi will struggle to finish the full course.
Lloyds’ dividend promise has Brexit caveat 28 Apr 2016 The UK bank’s payout growth hinges on keeping its capital ratio at 13 percent - which it barely managed in the first quarter. Lloyds’ potential to generate lots of capital is undimmed. But if Britons vote to quit the EU, those earnings may have to be diverted to running repairs.