UK vote hands banks golden lobbying opportunity 11 May 2015 The election of the business-friendly Conservatives should reduce state-endorsed bank-bashing. Better still for UK banks, there are good reasons as well as self-serving ones to rethink two key bugbears: ring-fencing and the bank levy. Industry advocates will be gunning for both.
British poll failures are applicable to finance 11 May 2015 David Cameron’s Conservative win last week brought the deepest pollster blushes since 1992. Even those who called the 2008 U.S. presidential election badly missed the mark. The likely culprits - groupthink and over-reliance on models – similarly fuel financial conflagrations.
Monsanto would have to dig too deep for Syngenta 11 May 2015 Big holders in the Swiss agribusiness say they’d back a $50 bln bid, or 10 pct more than the U.S. crops company offered last week. To justify a price that high, however, would require Monsanto to find at least $2 bln in annual cost savings. That sounds like an implausible harvest.
Ahold-Delhaize is a 25 bln euro deal full of hope 11 May 2015 The shares of both Dutch-listed grocer and its potential Belgian-listed target were up strongly on reports of renewed merger negotiations. A combination of the two U.S.-centric companies makes sense. But financing could be an issue, and the American market will still be tough.
Hugo Dixon: Greece seemingly has no Plan A or Plan B 11 May 2015 It owes around 324 billion euros. The government doesn’t seem to have a credible plan for reaching agreement with its creditors. Nor does it appear to have thought out how to default while containing the collateral damage.
New trading dynamics encourage big FX lurches 11 May 2015 Trading scandals and losses from the Swiss franc’s dramatic January rise have made currency traders more cautious. The result is a market where fewer dealers will challenge trends. It’s like a train with faulty brakes. A little momentum can take exchange rates on a long journey.
Second Scottish referendum looks some way off 8 May 2015 The nationalist triumph in Scotland may suggest that a second poll on secession from the UK is imminent. But with the economy struggling, and the oil price low, the SNP may hold back. The overall result also means the Conservative victors have no need to trade political favours.
UK vote gives City short-term gain, long-term pain 8 May 2015 Britain’s election will give firms a short-term boost. A much better than anticipated showing by Prime Minister David Cameron’s Conservative Party will soothe investors who had feared an inconclusive result. But the surprisingly decisive outcome creates medium-term headaches.
Hugo Dixon: Tory win brings marked EU exit risk 8 May 2015 David Cameron’s Conservatives are clear victors. A new coalition with the pro-European Lib Dems isn’t needed. Tory eurosceptics may push the prime minister to take an excessively tough line with the EU in the runup to the referendum he has promised on the UK’s membership.
Cameron has work cut out to sustain relief rally 8 May 2015 UK stocks and bonds, and the pound, have jumped on the Conservatives’ surprise election success. That’s to be expected given fears of a messy outcome. But the result leaves open questions on EU membership and Scotland. Such uncertainties could hold back investment and growth.
Monsanto heaps pressure on Syngenta 8 May 2015 The U.S. seeds giant has made a $45 bln approach to the Swiss pesticide firm. The target rejected this as too cheap and too risky. Syngenta has a point: there will be major political and antitrust hurdles. But it needs to lay out just how it will create more value on its own.
Li Ka-shing adds funding flair to telco turnaround 8 May 2015 The Hong Kong tycoon’s sale of a third of his British mobile division for 2.8 bln pounds raises funds for the purchase of Telefonica’s O2, without ceding control. Throw in debt and the tycoon will be able to buy a business worth more than 9 billion pounds with barely any cash.
Euro zone bond rout breaks whole new set of rules 7 May 2015 Remember when life was simple and easy money pushed up all asset prices? No longer. Government bonds whipsawed on Thursday and stocks are down, while oil prices are up. News isn’t the driver, either. The latest market dramas lack a rationale, but they’re still worrying.
U.S. interloper likely to win IT server tussle 7 May 2015 Things are hot in the air-conditioned data-centre business. Equinix is eyeing a $3.5 bln bid for Telecity that would kill the UK outfit’s all-stock purchase of Interxion. It’s hard to see Interxion biting back. Telecity owners are being offered 28 times 2015 earnings.
ECB’s bank board-crashing makes sense – to a point 7 May 2015 The euro zone’s financial stability gnomes will observe board meetings. Handled right, the ECB should glean extra insight – after all, corporate culture starts at the top. But regular sessions with board committees may reveal more about how Frankfurt’s 123 charges really operate.
Slow Siemens is stretching investors’ patience 7 May 2015 Reinventing the lacklustre engineer is taking a long time. Siemens’ industrial profit fell by 5 pct to 1.7 bln euros in its second quarter. CEO Joe Kaeser is stepping up cost-cutting by slashing another 4,500 jobs. But it looks like 2015 may be another lost year.
Adecco could have avoided top jobs headache 7 May 2015 The surprise exits of the Swiss staffing group’s CEO and CFO lopped almost $1 bln off its $15 bln value. The self-styled “world’s leading provider of HR solutions” might have handled the departures better – like giving investors advance notice that it was looking for a new leader.
Memo to European banks: more work to do on capital 6 May 2015 Investors largely rewarded lenders whose Q1 results showed stronger balance sheets. They were tougher on those who backtracked, like Societe Generale, BNP Paribas and Deutsche. That disdain looks wise: in time banks will probably need to hold yet more equity against assets.
Glaxo smartly bucks the breakup trend 6 May 2015 The British drugmaker scrapped a flotation of its HIV unit and slashed a planned cash return. That’s unfashionable in an era of spinoffs and shareholder payouts. GlaxoSmithKline, though, needs diversity and financial firepower while it tends to the core pharmaceutical business.
Edward Hadas: The great British deficit confusion 6 May 2015 David Cameron and Ed Miliband both want to balance the UK government’s budget. But the prime minister and the opposition leader seem to misunderstand how government debt works. They are not alone. The obsession is shared by some deficit-loving and deficit-hating economists.