UK blithely signs up to Germany’s worst idea 10 Jun 2015 Chancellor George Osborne is to enshrine budget surpluses in state legislation. For a nation with low interest rates and sagging productivity, aping German deficit-phobia is nuts. But plain thinking wins votes because the public has learned to mistrust the wisdom of economists.
Iceland gives Greece chilly model of capital curbs 10 Jun 2015 It’s nearly seven years since the then-bankrupt Nordic nation froze many foreign exchange transactions. A thaw will start soon. The tactic worked but Greeks tempted by a southern version should be wary. Capital controls are hard to lift and only work with tough policy choices.
Sacyr sale shows Spanish property market split 10 Jun 2015 The 1.8 bln euros paid for the builder’s commercial property unit is at a hefty premium to net asset value. Investors are piling into funds focussed on offices or hotels. The residential market is a different story. The worst is over but it’s likely to bump along the bottom.
Nestle India strung out by noodle scare 10 Jun 2015 Worries about lead levels in instant noodles wiped up to 21 pct off the value of the Swiss giant’s Indian unit. Investors seem to fear permanent damage for a company already struggling with weak volumes. Even if Nestle can win over regulators, the road to recovery may be long.
Amazingly, Irish homebuilder float looks a hit 9 Jun 2015 Ireland may be the real estate basket case of Europe, but a Dublin-based housebuilder is planning a London float. With most of its competitors bankrupt, strong demographics driving demand and prices in the Irish capital up 22 pct last year, Cairn Homes could be on to a winner.
Rob Cox: Russia sanctions’ unintended consequences 9 Jun 2015 Russian cheese production is booming. So are Putin’s approval ratings. Relations with China have never been better. Free-market entrepreneurs are being financially squeezed while the Kremlin and its banks coddle state-owned enterprises. This can’t be what the West hoped for.
HSBC continues to wind back the clock 9 Jun 2015 Four years since he started pruning the bank, CEO Stuart Gulliver is cutting risk-weighted assets by a quarter and shedding 50,000 employees. HSBC is returning to its roots as an Asia-focussed trade lender, though investors will have to wait almost three years to feel the effect.
Still room for upside if Delhaize goes Dutch 9 Jun 2015 The Belgian grocer may sell to larger rival Ahold. The two are worth 26 bln euros combined, they’re neighbours in Europe, and both have sizeable U.S. arms. Even with modest potential cost savings and the 15 pct rise in Delhaize shares, the bidder might find another 15 pct.
G7 carbon coup worsens Merkel’s domestic coal woes 9 Jun 2015 Prodded by the German chancellor, the big rich nations’ leaders have pledged to get rid of all fossil fuels by 2100. But at home, her party has joined the unions in fighting a crackdown on heavily polluting lignite. Merkel risks undermining her credibility – and the G7 deal.
Anshu Jain has an embarrassment of job options 8 Jun 2015 Deutsche Bank’s departing co-CEO can follow so many paths. John Thain downsized. Bob Diamond went to Africa. Huw Jenkins and Alan Schwartz took No. 2 roles elsewhere. John Mack got techie. Jes Staley turned hedgie. And then there’s the Stan O’Neal and Ken Lewis option. Bow out.
Shire can justify $19 bln price tag for Actelion 8 Jun 2015 Dublin-based drugmaker Shire is pondering a $19 bln bid for Swiss peer Actelion, media reports say. The speculation pushed shares in the potential target up 9 pct. Possible cost synergies underpin the implied 21 pct premium, but a higher markup would quickly become a stretch.
ECB cares about some markets more than others 8 Jun 2015 Mario Draghi is calm about the volatility in government bonds. The European Central Bank president doesn’t share the American fixation with equities. Commodities are out of his control. But an overly strong euro could nip budding inflation. He’ll be watching FX trends closely.
Anshu Jain’s painful lessons for new Deutsche boss 8 Jun 2015 The co-CEO’s departure has pleased investors irked by the bank’s lack of progress on cutting costs and boosting capital. Jain was slow to re-engineer what proved to be a flawed business model for the post-crisis era. New broom John Cryan can learn from his predecessor’s mistakes.
Hugo Dixon: What sort of man is Tsipras? 8 Jun 2015 The next days will define Greece’s PM. He must choose between saving his country and sticking with a bankrupt ideology. If he is brave and smart, he can secure a few more concessions from creditors and a goodish deal for Greece. If not, he will drag Greece into the abyss.
Diageo bid genie may be out of the bottle 8 Jun 2015 Investors seem to think the $70 bln drinks giant is vulnerable to a takeover. Diageo shares jumped as much as 8 pct on sketchy reports of a possible approach from 3G Capital, of Heinz and Kraft fame. The UK-based company will need to respond, even if there’s no action this time.
Tesco’s South Korean unit stacks up for a buyout 8 Jun 2015 A disposal for around $6 bln would do much to fix the British grocer’s strained balance sheet. Tesco might not miss the Korean earnings that much either. It’s hard to see trade buyers bidding up the price. But it presents a rare opportunity for private equity in Asia.
Turkey enters era of enhanced uncertainty 8 Jun 2015 The AK Party’s loss of a parliamentary majority in Sunday’s election has a good side. It will restrain President Tayyip Erdogan’s dictatorial dreams. But neither the weakened AK nor the deeply divided opposition looks capable of attacking the country’s serious economic problems.
Deutsche CEO switch eases only two of its problems 7 Jun 2015 Joint bosses Anshu Jain and Juergen Fitschen are being replaced by ex-UBS CFO John Cryan. It’s oddly timed, but logical after poor results, scandals and rising investor ire. Cryan, though, needs to swiftly fill in the gaps of a questionable strategy that isn’t entirely his own.
Vodafone talks raise more questions than answers 5 Jun 2015 The $100 bln telco is talking to cable group Liberty Global about an asset swap. Vodafone shares fell, suggesting disappointment among investors who’d thought a merger was on the cards. Smaller scale M&A is probably the right way forward, but any structure will be complex.
Thruppence: Should World Cup hosts foot FIFA woes? 5 Jun 2015 U.S. authorities are investigating how soccer’s governing body awarded the event to Russia and Qatar. As FIFA’s problems proliferate beyond graft indictments, Breakingviews columnists debate whether it is fair or practical to deprive host countries of the sport’s global fiesta.