Luxottica wears its dysfunctional governance well 2 Feb 2016 The revolving door at the Italian eyewear group hasn’t spooked the market as much as it should. The shares are up over 30 percent since Luxottica lost the first of three CEOs in 17 months. With steady growth and a rollout in emerging markets, it can afford the dramatics for now.
Investment acronyms shift from optimism to angst 2 Feb 2016 BRICS has been buried. Just as well: it was a “Bloody Ridiculous Investment Concept”. Now VIIPs and TICKs vie to take its place. But searching for groups of vibrant economies jars with the gloomy mood. The most appropriate new acronym might be a set of worries labelled CFO.
Bank dark-pool cases deserve harsh light of trial 1 Feb 2016 Barclays and Credit Suisse will pay $150 mln to settle U.S. charges of duping clients in their trading venues. Ending costly probes makes sense, but it’s unlikely savvy investors didn’t know of high-frequency traders and other risks. A court test would clear up some mysteries.
European mobile mergers won’t kill competition 1 Feb 2016 The European Union is reviewing a UK merger between O2 and Three. Other deals are in the works. More concentration raises the spectre of higher bills for consumers. But past tie-ups suggest that’s not inevitable at all.
Brexit index: The “Out” risk is real 1 Feb 2016 Britons are warming to the idea of Britain leaving the European Union, says a new Breakingviews Brexit index. It crunches nine different metrics to show the “Out” camp is gaining ground. The inputs include asylum applications, consumer confidence – and Daily Mail front pages.
Oil slump seriously harms Saudi Arabia’s health 1 Feb 2016 Big cuts to healthcare spending show the many ways in which low prices are putting strain on the Kingdom’s economy. Treating Saudi’s population of diabetics would absorb 15 percent of oil export revenue at $20 a barrel. Private investors will be needed to fill the gap.
Dixon: How to rehabilitate capitalism 1 Feb 2016 The classic leftist response to capitalism’s unfairness - tax and spend - has failed. A better bet is to fight unfairness caused by corruption, vested interests and tax cheating, while investing in education. India and Italy show some of the right ideas.
Magic formula fuels Ryanair’s ascent 1 Feb 2016 The lure of cheap flights has proved a match for Europeans’ fear of terrorism. The Irish carrier lowered prices after attacks in Paris, attracted 20 pct more passengers in the latest quarter than a year earlier, and even expanded its margins. High-cost rivals can’t keep up.
Swiss 1MDB probe holds fat tail risks for Malaysia 1 Feb 2016 Switzerland’s attorney general has indicated $4 bln was misappropriated from state firms, undermining Prime Minister Najib Razak’s efforts to shrug off the mess involving the sovereign fund. Though he can manage the fallout at home, foreign investigations are a lingering threat.
UK banks get capital clarity, plus BoE charity 29 Jan 2016 The Bank of England wants the largest UK lenders to hold only a touch more capital to lessen their systemic threat to the domestic economy. Given no big players will be hit badly, it looks like the latest reduction in bank-bashing. But the system also will be less opaque.
Barclays 2008 blessing still has elements of curse 29 Jan 2016 The UK bank’s former adviser Amanda Staveley is suing over aspects of an 11.8 bln stg capital raising. For Barclays, the financial positives from dodging a state bailout outweigh the negatives. But shareholders now also see reputational and ethical issues as more important.
Italy’s bad bank fit for its one real purpose 29 Jan 2016 The new plan to get bad loans off banks’ books is mind-bendingly complex. But the inputs are quite simple: banks’ desperation, investor greed and rating-agency whims. The lender where it’s most likely to work is Monte dei Paschi di Siena, which happens to be Italy’s biggest woe.
Murdoch’s second season could be good for Sky 29 Jan 2016 Four years after resigning at the height of a phone-hacking scandal, James Murdoch is back as chairman of the pay-TV group. That may rattle minority investors, but Murdoch has proven himself. It would be an odd move if Fox planned to buy the 61 percent of the company it doesn’t own.
Monetary policy enters mysterious quantum realm 29 Jan 2016 Japan’s foray into negative rates typifies a world where conditions are so loose that traditional relationships break down. Take bond yield curves, which used to be able to foresee recessions. This handy warning system no longer behaves as expected in the new quantum paradigm.
ThyssenKrupp salvation is right on its doorstep 29 Jan 2016 The German steel-making group’s turnaround has sputtered: shares are down 35 pct in a year and the outlook is tepid. A better corporate structure could create new oomph. A full-blown breakup may be tricky, but fellow Essen resident RWE’s spinoff plans may work for Thyssen too.
What happens in Baku may not stay in Baku 28 Jan 2016 Azerbaijan is calling in the IMF as its currency plunges. Yet it isn’t the only one heavily exposed to oil and gas prices. Dependence on Russia for trade, growing debt and reliance on commodities could unsettle the region unless prices recover or financial holes are plugged.
EU tax reform is flawed – get used to it 28 Jan 2016 European measures to kybosh flagrant corporate tax avoidance schemes look broadly welcome. Without global agreements, though, disparities will always let the likes of Apple and Alphabet whittle down bills. And binding sovereign countries to one approach is akin to herding cats.
Deutsche Bank risks its own “keep dancing” moment 28 Jan 2016 Despite a rotten quarter in investment banking, Germany’s biggest lender will keep adding risk and rainmakers. CEO John Cryan is entitled to see fixed-income issues as cyclical. But in time his stance may echo ex-Citi boss Chuck Prince’s 2007 pledge to stay at the subprime ball.
Russia and OPEC only need to give an inch on oil 28 Jan 2016 Russia has given its biggest signal yet that a grand bargain with Saudi, Iran and the rest of OPEC to reduce oil output is possible. All sides want to avoid the economic catastrophe of $20 crude but none wants to sacrifice market share. A modest cut may be all that is required.
H&M suffers from rare wardrobe malfunction 28 Jan 2016 The Swedish fast-fashion retailer said discounts on a glut of winter wear would weigh on sales. H&M is a little less efficient than chief rival Inditex, and the strong dollar isn’t helping either. Still, both are in a different league from most peers.