Banks ponder blockchain’s first-mover disadvantage 16 Dec 2015 Lenders are racing to adopt Bitcoin-style technology to cut their costs. Successfully incorporating so-called distributed ledgers could eventually cut $20 bln from industry costs. But it’s not clear what models will work, and whether free-riding rivals will share the prize.
Bollore and apathy triumph at Telecom Italia 15 Dec 2015 The chairman of Vivendi forced through a bid for board seats at Telecom Italia, despite opposition from other shareholders. The clincher was a low turnout at the vote, a poor sign for TI’s management. Investors apparently prefer uncertainty to unexcitement.
Greater China slowdown bedevils Prada 15 Dec 2015 Over nine months of 2015, U.S. and Middle Eastern sales slipped. But Greater China was the showstopper. Local currency retail sales tumbled 24 pct in the region. The $9 bln label’s chosen focus – it even listed in Hong Kong – is looking like the wrong economic and fashion choice.
Sanofi and Boehringer scratch each others’ backs 15 Dec 2015 The French pharma group is swapping its animal health business for the consumer arm of the German company. The 23 billion euro deal helps both while avoiding the risk of expensive M&A. Boehringer may have a marginally better deal, but Sanofi’s need is probably greater.
Pininfarina deal shows money buys taste after all 15 Dec 2015 Indian conglomerate Mahindra is paying a modest price to control the storied Italian car designer, saving it from high debt, anemic earnings and a jaded business model. As peers Ferretti and Pirelli already found, even Italian engineering flair doesn’t go very far without cash.
Spanish vote risks Portuguese-style messy outcome 15 Dec 2015 Polls reckon the incumbent conservatives will win this week’s election, but fall short of a majority. Many expect centrist Ciudadanos to back the winner, but it could instead opt for a deal with the Socialists and Podemos – similar to the motley crew that now runs Portugal.
Oil price slump takes gloss off Paris climate deal 14 Dec 2015 Brent crude trading close to an 11-year low could be a big boost to global growth. But at least in the short-term, the cheaper oil price will stoke fossil fuel demand. Even if the Paris accord helps longer-term, both oil prices and consumption are set to tick up.
BAE deal beats Rolls-Royce nationalisation 14 Dec 2015 The British government has concerns about the aero-engine maker that also handles some nuclear submarine work for the UK. In extremis, nationalisation is a possibility. A better scenario is that defence contractor BAE steps in. It might dust off deal ideas in any event.
South Africa’s Zuma discount is entrenched 14 Dec 2015 Assets of Africa’s second-largest economy are up after President Jacob Zuma’s rethink on a new finance minister. But 10-year bonds and shares are yet to recover all their losses. As the U.S. prepares to hike rates, the government has lost credibility at just the wrong time.
Bollore’s offensive on Telecom Italia looks clumsy 14 Dec 2015 The Vivendi chairman pulled support for Telecom Italia’s plan to convert non-voting shares into the regular kind. The move comes as his bid for TI board seats is struggling. If it works, he avoids dilution, but creates a messy conflict with the board and other shareholders.
Dixon: UK’s EU bind not quite a blind alley 14 Dec 2015 Prime Minister David Cameron has boxed himself in by asking the EU to let him deny “in-work” benefits to European migrants. Though other countries almost certainly won’t agree to this, there may be ways out of the box. Hopefully one will work. Otherwise, the UK could quit the EU.
New Renault-Nissan pact is only roadside repair 14 Dec 2015 France’s growing power at Renault is curbed, as is the French carmaker’s sway in Japan. It ends months of distraction for the auto alliance led by Carlos Ghosn. But the fiddly legal fixes only go so far. It would be better to see the duo drive towards a full merger.
Paris deal gives green light to eco-investing 14 Dec 2015 The climate goals agreed by 195 countries are laudably ambitious. Scepticism over governments’ ability to hit them is warranted. But the accord should encourage venture funds, bond- and shareholders to stump up more capital. And making an impact is not as hard as it may sound.
Heathrow offers useful dry run for Brexit debate 11 Dec 2015 David Cameron has deferred a decision on airport development around London. One business group called the move “gutless”. But expansionists haven’t yet convinced the populists. As with the UK’s looming poll on EU membership, it will take more than economics to win over voters.
Cash calls leave issuers with unfinished business 11 Dec 2015 Lonmin and Standard Chartered’s shares have both slipped further than theory might suggest since issuing a combined $5.5 billion of new stock. That’s logical at miner Lonmin, which now has a big stock overhang. For lender StanChart, it looks like a vote of diminished confidence.
Breakdown: Uneven CO2 prices are better than none 11 Dec 2015 Plenty of governments and executives support a uniform carbon emissions cost. Yet it’s unlikely one will emerge from the U.N. climate change confab. That’ll leave a hodge-podge of local schemes in place. As the need for energy innovation rises, it beats having nothing.
L&G swells ranks of quarterly report refuseniks 11 Dec 2015 The UK insurer and asset manager has ditched quarterly reporting and will update the market on a semi-annual basis. Reduced transparency is forgivable: Legal & General’s business is long term and lumpy. Rivals could follow, though saying less rather than more isn’t for everyone.
Road to ruin is paved with market prophecies 11 Dec 2015 The long-range forecast factory is in overdrive as the year-end nears. But too much depends on what an unpredictable OPEC does and how the opaque Chinese economy performs. Worse still, big price trends are prone to violent upsets when too many investors jump on the bandwagon.
Zuma is making South Africa’s bad situation worse 10 Dec 2015 Local markets are diving after the president sacked his finance chief. Domestic woes include acute electricity shortages, drought and strikes. Investors are apt to lump the country in with the likes of recessionary Brazil. Firing the money man will only confirm their prejudices.
Lloyds strikes blow for edgy CoCo issuers 10 Dec 2015 The UK bank has won its appeal against a ruling blocking it from redeeming redundant contingent capital notes at par. Issuers of CoCos, which turn into bank capital in a crisis, will cheer. CoCos will play a critical role in lenders’ solvency. Greater flexibility helps.