M&S CEO leaves shop well placed for 20th century 7 Jan 2016 Marc Bolland’s six years running the $10.5 bln UK retailer has left its food business shining and troublesome non-food business more efficient, even if sales are weak. In the days when M&S’s competition was basically British, that might have excited investors. Not anymore.
Bank culture just one side of a strategic trilemma 7 Jan 2016 Britain has scrapped a state probe into banking ethics. So it should – such reviews are usually a waste of time. A better way is to see bank culture, size and shareholder value as three irreconcilable sides of a triangle. Recent history suggests banks can achieve, at most, only two.
Portugal’s creditor-mugging may prompt EU copycats 7 Jan 2016 Lisbon’s decision to trash bondholders of Novo Banco rode roughshod over creditors’ claims for equal treatment. The region’s new resolution regime is meant to be clearer. Yet it too leaves room for more bad behaviour.
EU bank profit riddle has deceptively easy fix 6 Jan 2016 Bank profitability has replaced capital as the ECB’s chief regulatory concern. Since interest rates in the region are low and economic activity is slow, the easiest way to bolster earnings is widespread M&A. But neither central banks nor lenders are likely to want to play ball.
Wall Street’s pay reveal has germ of a good idea 6 Jan 2016 U.S. banks now say how many of their staff in Europe earned 1 mln euros or more in 2014. Knowing that 1,107 bankers from the top five did so is no great surprise. But JPMorgan’s policy of cancelling bonuses if long-term return targets aren’t met could make pay more defensible.
Sainsbury may have to pay more to bag Argos 6 Jan 2016 The UK grocer could buy Home Retail Group, the owner of homewares chain Argos, at the current price and make a return above 8 percent - with no growth or synergies. Cost savings could add much more. The execution risks are high, but the target is right to hold out for more.
Migrant crisis buys Germany unexpected growth 6 Jan 2016 Angela Merkel’s open door for war refugees will push government spending up by 31 bln euros over two years. Healthy public finances mean Berlin can foot the bill. In the face of sluggish global growth, the stimulus will make Germany’s relative strength more pronounced.
Sainsbury’s non-food foray smacks of desperation 5 Jan 2016 The UK supermarket has disclosed an approach for underperforming Home Retail Group. At around 1.1 bln stg it might prove a bargain acquisition, and Sainsbury’s grocery business faces acute price pressure. But homewares and electricals could just add trolley-loads of risk.
Sweden ignores Swiss lesson on FX intervention 5 Jan 2016 The Swedish central bank is talking about intervening to curb the inflation-dampening strength of the crown. Its own history and the experience of Switzerland, which spectacularly abandoned attempts to cap its currency almost exactly a year ago, augur failure.
VW’s U.S. lawsuit shows reboot is only half done 5 Jan 2016 A strongly worded government complaint has undermined Volkswagen’s progress in tackling its emissions scandal. U.S. laws are tougher than in Europe, and the German carmaker’s lobbying clout there is smaller. VW needs drastic steps to win goodwill.
Next’s best shopping days could be behind it 5 Jan 2016 Shares of Next have almost doubled since 2013 as the UK clothes shop has grown sales and refused to join the price-cutting game. Pre-Christmas sales rose just 0.4 pct, partly because of the warm winter. Yet things are set to get tougher for Next even if the weather returns to normal.
French telcos’ next call: sweet-talking consumers 5 Jan 2016 Orange and Bouygues are eyeing a tie-up that would give the French telecoms operators half the market. The state’s 23 pct stake in Orange makes the deal more likely to succeed, unless the EU intervenes. The key may be convincing customers of the long-term benefits.
Rail feud could set Italy on good governance track 4 Jan 2016 Minority shareholders in STS think Hitachi is offering them less than it effectively paid for a 40 pct stake from Finmeccanica. A decision from regulator Consob could shed light. A vote in favour of small investors would suggest Italian governance is changing for the better.
Saudi-Iran standoff magnifies upside risk for oil 4 Jan 2016 The kingdom has cut off diplomatic relations with Iran, suggesting it will continue a strategy of pursuing low oil prices to cripple the weak Iranian economy. An escalation, though, could threaten the one-fifth of world oil supplies that travels through the Strait of Hormuz.
China’s new year market volatility is overdue 4 Jan 2016 Falling shares triggered new “circuit breakers” on their first day of operation. The yuan is at its weakest since April 2011. Growing signs of an economic slowdown are feeding the jitters. But the turmoil is also a delayed reaction to previous flawed efforts to prop up markets.
Dixon: EU enters brave new world of bank bail-ins 4 Jan 2016 Europe has wasted too much taxpayers’ money rescuing failing lenders. So it is right to try to get investors to help foot the bill in future. But the tough new regime carries political risks which could make the rumpus caused by recent bail-ins in Italy and Portugal look minor.
Review: Making Big Data visible and tangible 31 Dec 2015 Projecting selfies onto a screen in real time shows both the value and vulnerability of today’s flood of ones and zeros. A London exhibition explores the good, the bad and the infrastructure of data from inventive angles. It makes a vital unseen world visible – and scary.
Volkswagen top brass will be up for the chop 31 Dec 2015 The German carmaker’s chairman and CEO are both new to their roles. But in 2016, huge emissions-cheating fines and a scathing external report on VW’s governance will shine a spotlight on leaving long-term insiders in charge. Chairman Hans Dieter Poetsch looks particularly exposed.
European populism poised for troubling second wave 31 Dec 2015 Southern Europe’s high debts and unemployment made it ripe for populism, but movements like Podemos have been held in check partly by economic recovery. They may now gather steam in other European countries, feeding on growing anti-immigration and eurosceptic sentiment.
Oil will blow past $80 a barrel in 2016 30 Dec 2015 Low-cost OPEC producers will win the hydrocarbon price war because they can fight harder for longer. For now, OPEC is flooding the market with cheap crude. But it is building power over prices by making rival output uneconomic. The next big move in the oil price will be up.