Edward Hadas: Iceland may have cure to bad banking 8 Apr 2015 The tiny island state had a particularly extravagant financial boom and an especially painful bust. It’s a great place to try something new. A parliamentarian there proposes moving to “sovereign money,” which fully separates money and credit. The experiment is well worth making.
France becomes Renault activist – to stop activism 8 Apr 2015 The state is temporarily hiking its stake in the carmaker to prevent other investors opting out from a law to double government voting rights. The reform is meant to protect long-term investors. As it is, Paris is using activist-style techniques to safeguard its own interests.
Shell could win from bold $70 bln swoop on BG 8 Apr 2015 The oil major is offering a fat 50 pct premium for its UK rival. But the share price was depressed and the synergies are attractive. The deal could prove a smart and opportunistic way to boost growth via deepwater assets and liquid natural gas – provided Shell keeps costs down.
Shell-BG highlights rise of the micro-boutiques 8 Apr 2015 The $70 bln deal needed just three advisers: Merrill, Goldman, and minnow Robey Warshaw. Rivals like Zaoui & Co have also won major mandates. For big M&A shops, two worrying trends are intersecting: CEOs seem ready to hire fewer banks per deal and to use much smaller outfits.
Taking on UK non-doms is good politics –and policy 8 Apr 2015 A tax loophole for the footloose rich should be an easy target for a centre-left opposition. But Labour is only now saying it plans to clamp down on “non-domiciled” residents. If the time is finally right, then Chancellor George Osborne missed an easy win.
Royal Dutch Shell and BG open mega-deal pipeline 7 Apr 2015 The $200 bln energy giant is in advanced talks to buy its $46 bln gas rival. It could be an opportunistic move for Shell, whose vulnerable target has a new CEO. There could yet be other suitors for BG. Any deal is also bound to kick off other big transactions in the sector.
Europe’s scars from Greece would run deep 7 Apr 2015 Warren Buffett is among those who reckon a Greek exit could make the euro zone stronger. Losses are manageable, other countries won’t follow immediately, and the shock may even prompt excess debt to be tackled. But political and economic tensions would be dangerously magnified.
FedEx bets $5 bln on Europe’s potential with TNT 7 Apr 2015 The U.S. shipper’s cash bid for its Dutch rival comes two years after Brussels killed a takeover by rival UPS. The price is 20 times the weakened target’s 2016 earnings. That sounds high. But a strong dollar, cheap debt and sizeable synergies could help deliver decent returns.
Iran deal moves oil closer to long bear market 7 Apr 2015 A framework deal to curb Iran’s nuclear program is likely to bring the country’s oil exports way up. Like Saudi Arabia, Iran gains more from market share than it loses from low prices. Higher-cost producers will take time to adjust.
Hugo Dixon: Greece has two weeks to produce red meat 7 Apr 2015 The default scenario is off the table for the time being after Athens confirmed it would meet a payment to the IMF on April 9. But it will probably be back by late April if Greece doesn’t come up with some serious reforms on pensions, tax and banking.
Nestlé wades into purest form of water risk 2 Apr 2015 The $243 bln Swiss giant faces populist protests for bottling and selling H2O from Canada and drought-hit California. The potential harm to its reputation may not be worth the effort. It’s Nestlé’s least profitable business, and consumers might just as well drink from the tap.
Review: Choking on digital exhaust 2 Apr 2015 Government and corporate mass surveillance of citizens is an aberration on a par with child labor or environmental pollution, claims security expert Bruce Schneier in “Data and Goliath.” He offers a rousing call for resistance, and hope for change - a few decades hence.
M&S share price has caught up with reality 2 Apr 2015 Latest trading figures show that the long-struggling British retailer has stabilised its business. Investors have re-rated the stock, up 44 pct in six months. The valuation is probably sustainable, but further big gains are unlikely. M&S stock may now mirror its earnings growth.
Greece comes kicking and screaming to reform table 2 Apr 2015 The Syriza government’s latest reform proposals include some concessions to its public creditors. The plan still lacks detail, and reneges on past promises. The government is fiddling while Athens burns, and the risk of an accidental euro zone exit is rising.
Swiss say-on-pay bodes ill for rainmaker wallets 2 Apr 2015 UBS and Credit Suisse face binding shareholder votes on executive compensation for the first time. These will judge aggregate, not individual awards. But Swiss banks must also disclose their top-paid executive. That makes it harder for dealmakers to out-earn their CEOs.
April 1 jokes expose greater fools of finance 2 Apr 2015 A Tesla prank involving a fake new product caused its shares to twitch. Meanwhile, Tinder for Uber seemed all too credible in a Silicon Valley littered with this-for-that business models. When investors can be easily duped, it’s a sign markets are high on hype and distortions.
British bosses take ill-advised political pot shot 1 Apr 2015 More than 100 UK-based business chiefs say it would be bad if the incumbent Conservative-led government is defeated in the upcoming May election. It is a high-risk intervention with low potential returns. It exposes companies and enterprise more than it safeguards their interests.
Edward Hadas: Airline safety after the crash 1 Apr 2015 The German prosecutor says Andreas Lubitz was certified as a pilot despite treatment for suicidal tendencies. He seems to have deliberately crashed the Germanwings plane he was flying. The disaster looks like an aberration, but the industry’s approach to pilots needs a rethink.
Brazil has edge on Turkey in recovery strategy 1 Apr 2015 The two middle-income countries suffer from weak GDP growth, big current account deficits, high inflation and corruption. But they are taking different paths. Turkey’s authoritarianism is popular and destructive. Brazil’s new austerity is unpopular but will help even its critics.
Tidjane Thiam’s pay is insufficiently prudential 1 Apr 2015 The outgoing Prudential CEO was paid 8.3 mln stg in shares for hitting long-term targets. Given his record, the largesse can be defended. But the UK insurer - and fund manager – should follow peers in requiring such awards to be held until outperformance is proved sustainable.