Politics is weak ally in K+S fight against Potash 22 Jul 2015 Regional politicians are siding with German fertiliser group K+S in its attempt to deflect a 9.5 bln euro offer by Canada’s Potash Corp. But apart from vocal interventions, policymakers can do little to foil a deal. With credible job guarantees, Potash can force K+S into talks.
Chicago toll road owners may avoid highway to hell 21 Jul 2015 Macquarie and Ferrovial are shopping the fee-charging U.S. turnpike, a decade after buying it for $1.8 bln. The high debt and low earnings mean it’ll take a big valuation multiple to recoup the investment. Recent infrastructure deals suggest they could get one.
German labour relations now worse but not bad 21 Jul 2015 Cooperation between unions and employers drives Germany’s economic success. Few days are lost to strikes. Recent headline-grabbing walkouts of train drivers, postal workers and kindergarten staff darken the picture. But in manufacturing, the economy’s core, peace prevails.
Investors are too bullish on $7 bln drinks-can bid 21 Jul 2015 Europe’s trustbuster is looking hard at the planned takeover of UK-based Rexam by Ball of the U.S. That’s unsurprising. The new entity would control around two-thirds of key markets. A deal may yet go through. Still, Rexam shares over-egg the chances of success.
IMF’s new head economist is imaginative realist 21 Jul 2015 Maurice Obstfeld will bring a nuanced approach to the global lender. The Berkeley professor emphasises the importance of strong institutions and is doubtful about pure market dogma. His pragmatic respect for the nuances could help both developing economies and the euro zone.
UK wage plans are bad fit for low-skill workforce 21 Jul 2015 Raising the minimum wage is a fine idea on paper. Workers earn more without adding much to inflation or subtracting much from growth. But reality may be less benign. Chancellor George Osborne’s desired wage floor could be too high for the relatively low-skilled British workforce.
Agnellis nudging PartnerRe out of rival’s reach 20 Jul 2015 Exor, the Italian family’s investment vehicle, has a better offer for the Bermudan reinsurer than Axis. Common shareholders would get more money, in cash, and preferred stockholders extra assurances. A last-minute counter by Axis would hurt its and PartnerRe’s investors.
German anti-euro infighting boosts single currency 20 Jul 2015 While the euro zone is holding together, feuds over Islam and xenophobia have torn apart Germany’s anti-euro AfD. That leaves pro-European voices unchallenged in Berlin. There are sharp debates on how Europe should work, but the country remains an anchor of political stability.
Pearson sale of FT could stick this time 20 Jul 2015 The $16 bln publisher may offload the pink-hued newspaper, according to new reports. The Financial Times looks increasingly out of place in a group focused on U.S. education. The healthy M&A market might encourage potential buyers to bid a price acceptable to Pearson.
Fertilizer deal talks emit whiff of exuberance 20 Jul 2015 U.S. nitrogen giant CF Industries is sizing up $6 bln Dutch rival OCI. A combination could bring tax and other savings. CF got the timing right when it bought rival Terra in 2010. This time, prices are falling and new supplies arriving. The M&A enthusiasm looks excessive.
Shouldn’t Credit Suisse and StanChart swap CEOs? 20 Jul 2015 Bill Winters is beginning his tenure as new boss of the emerging markets lender at the same time that Tidjane Thiam takes charge of the Swiss investment and private bank. Both are capable executives, but their experiences seem uncannily to better suit the other’s job.
ECB faces tricky call on Greek bank solvency 20 Jul 2015 With Athens’ lenders open again, attention now shifts to Frankfurt’s supervisory test of their capital strength. Half of their buffer is deferred tax credits, which supervisors hold in low regard. But taking a tough approach makes a painful bail-in of depositors more likely.
Gold’s support is melting away 20 Jul 2015 Bullion has fallen to a five-year low, briefly trading below $1,100 per ounce. Chinese demand is underwhelming and Greek fears are abating. With the dollar and U.S. policy rates set to rise, the opportunity cost of holding gold will increase. The price slide can easily continue.
Hugo Dixon: Mario Draghi is having a good war 20 Jul 2015 The ECB president has done almost everything he can to keep Greece in the euro without breaking the central bank’s rules. Although Draghi has been attacked by Athens for asphyxiating the country and hardliners for showing excessive leniency, he has got the balance about right.
UK seeks watchdog: must be tactful, tough and able 17 Jul 2015 Britain is searching for a new regulator after Chancellor George Osborne ousted Financial Conduct Authority boss Martin Wheatley. His replacement will need to avoid mistakes and forge a conciliatory pact with financial institutions while also protecting consumers. It’s a big ask.
Review: A virtuous defence of finance 17 Jul 2015 Markets are more ethical than confrontational, writes Pierre de Lauzun. The French banker even praises his industry for tying present to future and supporting the common good. He’s onto something. Finance can be socially helpful, if it shakes off so-called economic rationality.
Bafin barbs show scale of Deutsche overhaul task 17 Jul 2015 A leaked letter from the German bank’s lead regulator slams executives for incompetence - or worse - over Libor. New CEO John Cryan needs to repair relations. Improving controls and recruiting new managers complicate the already-sizeable job of boosting Deutsche’s performance.
German labour costs rise at just the right pace 17 Jul 2015 A new minimum wage, an increasing shortage of skilled workers and palpable pay hikes are pushing German wage costs upward. But the trend is gentle enough for the labour market to cope while exporters’ excessive competitiveness is eroded safely. The whole euro zone benefits.
The dubious maths behind UK non-dom tax clampdown 17 Jul 2015 Britain reckons it can raise 1.5 billion pounds by limiting a loophole that allows wealthy residents to avoid tax on overseas income. The country’s budget watchdog is sceptical. Regardless of the merits of changing an archaic system, it’s just as likely to lose as make money.
Rob Cox: The world’s hardest central bank job 16 Jul 2015 It’s not Yellen’s, Draghi’s or Kuroda’s. Russian central bank chief Elvira Nabiullina faces a unique bouquet of challenges. On top of a weak oil price and ruble, nettlesome inflation and Western sanctions, there’s Vladimir Putin. Under the circumstances, she deserves a medal.