Shire can’t easily pay more for Baxalta 14 Aug 2015 The pharma group’s all-stock $75 bln merger approach has been rejected by its rival. Shire’s bid relies on aggressive claims to boost revenue, which Baxalta disputes. Breakingviews’ model shows Shire chief Flemming Ornskov can’t dig much deeper without bold assumptions.
Corbyn’s hard-left ideas merit scrutiny, not alarm 14 Aug 2015 The frontrunner to lead the UK’s Labour Party looks at first like a hopeless throwback. May’s UK election implies he won’t be prime minister. But some of his themes – focused QE, or selective public ownership of natural monopolies – are worth debating, and not just in Britain.
Greek bank bail-in threat starts to recede 13 Aug 2015 Savers have rightly feared their deposits may get turned into equity. Draft proposals for Athens’ new bailout imply this may be unnecessary. It probably isn’t enough to entice private investors, but boosting depositor confidence is an important step in clearing up Greece’s mess.
Aegon gives peek at insurers’ new capital gremlins 13 Aug 2015 The Dutch insurer’s shares slumped after it adjusted down its estimated capital ratio under new Solvency II rules. Before the new metrics go live next year, more insurers could unearth nasty surprises. Even after, capital positions are set to be more volatile.
The Economist shows faith in own self-worth 12 Aug 2015 The Agnelli family is raising its stake in the financial weekly’s parent to 43 pct, valuing it at 957 mln pounds. The Economist itself will also buy back stock at a similar valuation. While not cheap, the result is a tidier balance sheet, an acquisition currency and more freedom.
Skills deficit may hamper UK jobs growth 12 Aug 2015 Britain’s labour market seems to be doing pretty well. Unemployment has fallen and wages are rising at a decent clip. But scratch the surface and there’s a nascent issue. New data shows a large number of vacancies, especially in sectors that require more technical proficiency.
Edward Hadas: Tom Hayes had the wrong standards 12 Aug 2015 The convicted trader said he was like most people. They just “do their job” without asking whether it is honest or dishonest. He has a point. Society requires such upward ethical delegation and it usually works pretty well. Except, that is, in the financial world.
China trips up Fed-fixated traders 11 Aug 2015 Jolted by the unexpected slide in the yuan, stocks fell and Treasuries rose. But what next? A proper response all depends on whether Beijing plans a bigger depreciation of its currency. When U.S. policy rates will rise is no longer the only guessing game in town.
Sliding yuan lays bare uselessness of FX markets 11 Aug 2015 The scramble to parse the currency’s 2 pct devaluation signals a bigger issue. Exchange rates are expected to do too much work, as a tool, an indicator and a trading opportunity. A less variable market, similar to the old Bretton Woods system, could be helpful to everyone.
Greece deal leaves euro intact but fragile 11 Aug 2015 Athens may get its bailout after Prime Minister Alexis Tsipras gave in to reform demands. Quitting the euro is much less likely. It suggests currency union can bear the near-exit of a peripheral state. Economic rifts between core members, though, remain the big future risk.
China currency move reflects realism over idealism 11 Aug 2015 A surprise 1.9 percent devaluation of the yuan won’t have much effect on the real economy, but may show willingness to help exports through a cheaper currency. To unwind global imbalances, the yuan really needs to be stronger. China just isn’t yet ready to take that medicine.
Finns seize the moment in $6.2 bln crane deal 11 Aug 2015 Finland’s crane maker Konecranes is joining forces with U.S. peer Terex in an all-share merger. The deal stacks up strategically, but the timing is opportunistic for Konecranes. Its shares are up 23 percent in a year, while much bigger Terex has lost 40 percent.
UK death-insurance merger makes future less morbid 11 Aug 2015 Partnership and Just Retirement are combining in an all-share deal. The business of offering annuities to high-risk customers got smacked by regulatory shifts in 2014, and both trade below 2013 listing prices. Cost savings make things better, but the sector is still in flux.
RWE reform spark smothered by politics 10 Aug 2015 The stricken German utility plans to cut red tape, but it really needs to cut staff. EBITDA per employee has fallen 28 percent since 2010. While rival E.ON has opted for a radical breakup, RWE would struggle to sell tough action to its political shareholders.
Hugo Dixon: How to fix Greece’s banks 10 Aug 2015 The banks are the weakest point in the country’s economic system. They need to be repaired in order to lift capital controls, restore depositor confidence and finance a future recovery. There are some good ways of doing this, even if the best options aren’t making much headway.
Greece still deserves its place in the euro 10 Aug 2015 While Greece may get a bailout, the recent crisis cast doubt over its place in the euro. Ejecting Athens from the single currency would make sense if it is exceptionally bad, incapable of reform, and its exit made the euro zone stronger. None of those arguments are clearly true.
Europe’s trustbusters threaten to upend Hollywood 10 Aug 2015 Big filmmakers may be failing to give European pay-TV subscribers fair access to their content, says the EU. If the charges stick, movie studios may lose pricing power. And Tinseltown could be obliged to rethink production values in light of likely lower revenue.
Allianz takes Pimco’s fall from grace in stride 7 Aug 2015 With assets under management and profit falling, the German insurer’s Pimco arm is still reeling from boss Bill Gross’ acrimonious exit. But Allianz can ride it out. Its insurance division and a growing in-house asset manager mean it can stick to full-year targets.
Faulty market signals mask real equity concerns 7 Aug 2015 Volatility measures have become flawed guides to whether investors think stocks might slide. Selling protection against such drops has become a money-spinner rather than the preserve of market-makers. There is more concern about U.S. equities than meets the eye.
MPS ploughs lonely furrow to profitability 7 Aug 2015 Shares in the Sienese bank climbed due to better-than-expected capital and falling bad loans. Yet MPS is still far from earning its cost of equity, and a high stock of bad loans will hold it back in the M&A boom expected in Italian banking. The shares look fully valued.