Italy rushes through one last flawed bank bailout 7 Sep 2015 Europe is weeks away from a new regime that makes creditors and depositors pay for bank rescues. Yet Rome is still asking Italian banks to pony up 1.4 billion euros to save three small lenders. Bail-ins are unpredictable, but the proposed solution risks leaving the system weaker.
BBC embraces life as a servant of the people 7 Sep 2015 The UK’s world-renowned broadcaster may use its state funding to help local newspaper groups report public-interest news. Dry coverage of municipal minutiae won’t reinvigorate the media sector. But using the state-backed BBC to ease an apparent case of market failure makes sense.
Glencore’s giant cash call puts squeeze on rivals 7 Sep 2015 The Swiss trader’s $10 bln debt reduction plan eases balance sheet jitters by cutting net borrowings by a third. Investors get stability at the expense of their dividend. But the move offers a grim view of commodity prices that undercuts the investment case for the whole sector.
Tesco sells Seoul for a decent price 7 Sep 2015 The UK grocer is offloading its South Korean unit for $6 bln-plus in Asia’s largest-ever buyout. That’s a solid result given wider market wobbles and falling margins at Homeplus. South Korea’s burgeoning private equity market and a paucity of big deals in the region helped.
Brussels may offer loophole for bank capital hit 7 Sep 2015 New accounting rules on how much lenders must put aside to cover future bad loans are sensible, but risk knocking holes in banks’ precious solvency ratios. The European Commission has a way to stop this happening. For once, red tape may be the banks’ friend.
Tesco’s global hopes can survive Korea sale 4 Sep 2015 Britain’s biggest grocer is close to selling its supermarkets in South Korea, reports say. The mooted 4.3 bln stg proceeds would cut net debt in half and relieve operational headaches. Yet an exit need not be the end of Tesco’s international ambitions.
Europe’s fuzzy capital markets union takes shape 4 Sep 2015 The European Commission is mulling a directive to harmonise member states’ various insolvency regimes. If common principles can be nailed down, bankruptcy will get smoother. And the Juncker commission’s goal of better integrated capital markets would have a hope of success.
Catalan vote a sideshow to national election 4 Sep 2015 Secessionist parties want to kick-start the road to independence in the Spanish region if they win the election on Sept. 27. But even if they prevail, the hurdles to full-blown independence look high. Investors should fret about Spain’s general election in December instead.
Chinese plane-hire deal survives market turbulence 4 Sep 2015 Bohai Leasing’s $2.6 bln bid for Dublin-based Avolon confirms China’s desire to grow in aircraft rental. The $31-a-share offer is slightly below Bohai’s indicative bid a month ago. But rising interest rates and the falling yuan could have been reasons to drive a harder bargain.
Volkswagen gets new chairman decision half-right 3 Sep 2015 Naming CFO Hans Dieter Poetsch as its new chair should give the German carmaker a better balance between cost discipline and engineering perfection. But a strong external candidate would have made more sense. As it is, Poetsch will start off needing to prove his independence.
Yoox glee at Net-a-Porter exit may wear thin 3 Sep 2015 Shares in the upmarket online retailer popped 5 pct as Net’s founder cashed out of the merger agreed in March. Terms of the severance deal with Natalie Massenet confirm that Yoox bought its rival at a bargain price. But it is losing know-how at an important time.
IMF misses chance to help global policymakers 3 Sep 2015 The lender’s warning on global economic risks lacks what policymakers need: insight into what’s happening to China and why market ructions have been so severe. G20 finance officials heading for Turkey need meatier, more challenging views than the IMF seems prepared to give.
Fosun global ambition clashes with market reality 3 Sep 2015 The Chinese conglomerate’s bid for private bank BHF Kleinwort Benson comes with alluring logic and a reasonable premium. That might not be enough. Weak markets in China, and an apparent belief that Fosun will offer more, are pulling in opposite and unhelpful directions.
Russia has levers to cope with oil squeeze 3 Sep 2015 A low oil price will dent growth and public revenues, and Russia needs rebalancing. Yet President Vladimir Putin can hold the line by drawing on reserves and even inflating regional deficits, while the rouble’s fall helps competitiveness. That could enable a fragile equilibrium.
Higher dividend is easyJet’s next destination 3 Sep 2015 The British no-frills carrier has upped its 2015 guidance significantly, sending shares up 6 pct. With earnings per share poised to rise by a fifth, it can easily afford topping up shareholder payouts. But future growth plans limit the scope of another 2013-like special dividend.
Why oil investors are so behind the curve 2 Sep 2015 Investors used to assume that the cost of pulling oil out of the ground was relatively static – or changed slowly. Reality is slipperier. Rethinking the way the “cost curve” works may help explain recent gyrations in oil and other commodity markets.
VW steers towards needed boardroom harmony 2 Sep 2015 Volkswagen is extending CEO Martin Winterkorn’s term to 2018, ruling him out as next chairman. This leaves room for an independent, external candidate to replace fallen patriarch Ferdinand Piech. VW’s flawed governance might then shift up a gear.
LVMH’s bite out of Apple is digital coming-of-age 2 Sep 2015 The French luxury group has poached a top Apple music executive to head its online operations. It’s a significant move in a sector that has been wary of the net. It also cranks up the heat on the sector’s e-commerce leader Burberry and recently merged Yoox/Net-a-Porter.
Novo Banco has issues – Chinese owner or not 2 Sep 2015 Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills.
Migration crisis echoes age-old test of finance 1 Sep 2015 The flow of desperate people to Europe has a financial-world parallel. For companies, high returns attract new entrants who threaten incumbents’ comfortable state. The options for EU leaders are similar too: shut out competition, or find new, better ways to create profit.