Spanish debt hangover easing but still painful 7 Mar 2016 Private debt has been falling since 2010 but is still high at 175 pct of GDP. Over-indebted companies are finally cleaning up balance sheets. Lenders may soon be able to increase net lending, which would be good for their earnings – though maybe not for a still-leveraged economy.
Barclays shouldn’t double dip with Diamond 4 Mar 2016 The UK bank is selling its listed ownership of several lenders in Africa. Ex-Barclays boss Bob Diamond, who has operations there, would need $4 bln to buy a majority stake. That’s quite a tall order. And Barclays would face huge pressure not to give Diamond too good a deal.
LSE merger of equal-ness is a red herring 4 Mar 2016 Is it a merger? Are they really equals? It matters not. Deutsche Boerse’s approach for its UK rival could leave London Stock Exchange shareholders 16 pct better off. If a spoiler comes from U.S. peer ICE, value not format is what should guide LSE’s board and boss Xavier Rolet.
StanChart reinforces case for simpler pay 4 Mar 2016 The bank gave new boss Bill Winters 6 mln pounds to buy him out of hedge fund Renshaw Bay. Yet that’s hard to square with the now-known price at which the fund’s main business was later sold. Standard Chartered’s numbers may still add up, but investors can only guess.
Investment banks fiddle while economic value burns 3 Mar 2016 Even by 2020 they won’t earn returns above their cost of capital, a poll of 147 analysts has predicted. Deutsche Bank and Standard Chartered have almost said as much. Rather than accept that as a fact, the industry could do more to exit weak businesses and cut costs.
France tries potent anti-Brexit ploy: threats 3 Mar 2016 Gallic warnings that migrants will be waved through to Britain if the country leaves the EU could be scare tactics. But Economy Minister Emmanuel Macron’s words may do more to sway UK voters who fear immigration than economic arguments about the benefits of staying in the club.
Russia gets even less enticing for foreign banks 3 Mar 2016 Goldman Sachs may not help underwrite a Russian state bond issue after Washington criticised U.S. involvement, reports say. Foreign investment banks that remain in Moscow need business. But the difficulty in negotiating the conflicts shows why some are quitting.
Schroders picks bad time for not-great governance 3 Mar 2016 Michael Dobson will stand down as chief executive of the UK asset manager and become non-executive chairman. That’s not good practice. Schroders has reasons for the move, but given the tough environment for fund managers, there are good grounds for fresh blood.
Sports Direct investors get what they deserve 3 Mar 2016 The sports retailer will be relegated from the FTSE 100 after a profit warning and a minimum-wage controversy hammered the shares. Founder Mike Ashley’s control gives investors almost no influence. But they have always known that risk – and until now, have done well despite it.
Wanda finds new financial rollercoaster in Paris 3 Mar 2016 The group run by China’s richest man is already betting on soccer and movies, two famously fickle businesses. Now Wanda and France’s Auchan will build a $3.4 bln leisure complex near Paris. Theme parks can be a pretty wild ride: just look at the French capital’s Disneyland.
Germany’s Facebook cartel probe deserves a Like 2 Mar 2016 The social network doesn’t charge a price, yet still is not free: users pay with their personal data. But are they getting a fair deal or is Facebook abusing its market power? Either way, it’s good that a pioneering investigation by Germany’s competition watchdog is asking the question.
Who pays for London City Airport’s golden ticket? 2 Mar 2016 The financier’s hub of choice has been bought for 2 bln stg by a group including Ontario Teachers’ Pension Plan. The price, about 30 times 2015 EBITDA, implies the airport needs to double its passengers to make decent returns. Or it can hike prices – and annoy its own customers.
Rolls-Royce’s board activist is double-edged sword 2 Mar 2016 U.S. activist fund ValueAct has a seat on the board of Rolls-Royce. If the engine maker’s No. 1 shareholder musters enough patience, it can underpin the turnaround engineered by CEO Warren East. But should it push for quick fixes like a breakup, Rolls’ predicament could worsen.
Darty bids will leave investors well upholstered 2 Mar 2016 The electrical retailer’s 662 mln pound merger with French bookstore Fnac has been gazumped by furniture retailer Conforama. Fnac could pay a lot more, and add cash. But Conforama’s parent seems intent on diversifying away from South Africa. Darty can sit tight for a better deal.
Caixabank’s BPI ambitions require African solution 2 Mar 2016 The Spanish lender is reportedly in talks to acquire Angolan investor Isabel dos Santos’ stake in the Portuguese bank. But first it needs BPI to find a way to cut exposure to Angola. Otherwise Caixa’s efforts to control BPI will be no more successful than previous attempts.
Negative yielding bond world favours the agile 1 Mar 2016 German 10-year bond yields are in sight of last year’s record low, 0.05 percent. There’s no reason why they can’t fall lower than this given Japan just auctioned comparable debt at a sub-zero yield. Investors need to be nimble to make money in this world of negatives.
Barclays’ new strategy is uneasy mix of past two 1 Mar 2016 The UK bank will exit Africa but keep the group’s investment bank intact. CEO Jes Staley’s predecessors Antony Jenkins and Bob Diamond respectively aimed to slash trading and advisory, and invest in it. In assuming the unit is the right size, the risk is weak returns persist.
Deutsche Boerse’s LSE bid could slip up on ICE 1 Mar 2016 The U.S. exchange may crash a merger between Germany’s exchange and its UK peer. Cash and a higher premium would be enough to turn LSE investors’ heads. The German group can counter with big synergies or hike its own bid - but that might annoy customers and its own shareholders.
Glencore’s recovery scores three out of four 1 Mar 2016 The Swiss-based miner has cut costs, reduced debt and proven its trading business does well when commodity prices are low. To reach a net debt target of $15 bln, boss Ivan Glasenberg needs to offload mines and a stake in its agricultural business into a market awash with sellers.
Amazon pantry raid should worry UK grocers 29 Feb 2016 The Seattle giant’s move into British fridges, via a deal with Wm Morrison, is starting modestly. Just 5 pct of UK grocery sales happen online, and profit is scarce. But Amazon has three things in its favour: size, a tolerance for low margins, and no pesky real-world stores.