Edward Hadas: What Greece teaches emerging markets 18 Feb 2015 Forget the crisis. The euro is almost irrelevant to the serious developing economy issues which face Athens: weak institutions, dysfunctional politics and excessive capital flows. As Greece shows, outsiders can help or hurt, but these problems are ultimately domestic.
Tesco’s new chairman is logically logistical 18 Feb 2015 Investors may be a little disappointed to see John Allan heading up Britain’s largest retailer. Asda’s Archie Norman would have been a bigger name. But Allan is a decent choice: his logistics experience will be very useful for the grocer and his financial credentials are sound.
Rusty Peugeot’s restoration has further to go 18 Feb 2015 Carlos Tavares has beaten most of his goals in his first year as boss of the French carmaker. Shares are up 52 pct too. The company is debt free, cashflow positive and more cost efficient. A 2018 operating profit margin target of 2 pct looks modest. Peugeot may gain speed more quickly.
Italy could host Europe’s next bout of mobile M&A 17 Feb 2015 Previous deal talks between Hutchison Whampoa and Vimpelcom led nowhere. Still, there’s a big incentive to unite the duo’s Italian units. That combination could create financial benefits worth 4.1 bln euros – and lead to a 30 percent uplift in value.
Investors still bet on a rational Greek outcome 17 Feb 2015 The market impact of Greek bailout talks breaking down has been subdued. The history of euro zone negotiations points to last-minute compromise, as does economic logic. The danger is that markets are allowing financial hope to trump political reality.
Caixa’s BPI bid is a smart way to grow in Portugal 17 Feb 2015 The Spanish bank is bidding 1.1 bln euros for the remaining 56 pct of Portugal’s BPI. The price is decent, though synergies look ambitious. Caixa may not get to 100 pct but will exercise control. The obvious follow-up, buying Novo Banco, will be harder given the capital needed.
European telecoms euphoria is about to be tested 16 Feb 2015 The euro zone’s four big incumbent operators are about to outline future prospects as they report annual results. M&A and yield-hunting has powered huge rallies, especially at Deutsche Telekom and Orange. Investors could find the market has run ahead of itself.
Michele Ferrero leaves $25 bln-plus Nutella empire 16 Feb 2015 The confectioner has died at 89. Blessed with a gift for creating and marketing treats, he built Italy’s biggest fortune from hazelnut spread, Kinder Eggs and Tic Tacs. Stock markets and deals were both anathema. Rivals will hope his heirs eventually tire of independence.
Hugo Dixon: Greece desperately needs quick fix 16 Feb 2015 Time is running short. A deal is needed in the next few days to stop Athens going bust. That will be, at best, a short-term patch-up while a long-term programme is worked out. Compromise is needed by both Greece and its euro zone creditors to avoid a disaster. It won’t be easy.
Review: Art market’s old vices go global 13 Feb 2015 Georgina Adam’s “Big Bucks” explores how contemporary art, buoyed by billionaires’ cash, has exploded as an asset class. The financial shenanigans are breathtaking but there were plenty in, say, the 1920s, another era of the super-rich. But today, the whole world is joining in.
Rocket Internet exploits tech stardust 13 Feb 2015 The German tech group raised 589 mln euros in new equity just five months after its IPO. European markets are booming, venture capital is hot, and after a rash of M&A, Rocket wants to buy and build more firms. Still, the aggression and shock dilution will deter some investors.
Italian bad bank is worth the risk 13 Feb 2015 Rome wants to set up an entity to hoover up Italian banks’ dud loans. As Italy has itself found before, these can be a waste of money for the taxpayer. But this time around, conservative valuations on the assets could help another goal – consolidation of Italy’s mutual banks.
Rolls-Royce’s margin of error is narrowing 13 Feb 2015 The UK engineer has met lowered 2014 revenue and profit targets but has become more pessimistic. Free cashflow, down 42 pct last year, is likely to halve again this year. Rolls’ strong balance sheet can cope for now. But if the trends continue, management faces some tough choices.
Barclays bonus headache pounds into second year 12 Feb 2015 The UK bank looked hypocritical last year in granting bigger payouts as profit fell. Returns could be even lower for 2014, but deferred payouts still have to be paid. Boss Antony Jenkins will have a hard time reconciling the twin imperatives of keeping staff and investors happy.
Sweden shows ultra-easy policy is contagious 12 Feb 2015 The Swedish central bank has cut repo rates below zero. It’s also buying $1 bln-plus of sovereign debt. With plentiful stimulus in the euro zone, U.S. and UK financial systems, states that don’t take a tough anti-deflation stance risk seeing their currencies spiral.
Credit Suisse earns the chance to be proactive 12 Feb 2015 The Swiss bank has kept its full-year dividend and now aims to slash an extra $75 bln of assets in 2015. Private and investment banking are for once both doing well, and fallout from the rising Swiss franc looks bearable. That gives CS scope to tackle its weak capital position.
Renault’s turn of speed needs careful handling 12 Feb 2015 The French carmaker has beaten expectations for 2014 by a mile. A 30 pct jump in operating profit, plus an optimistic outlook, pushed the shares up 9 pct. Europe’s recovery should keep Renault on the road. But worsening woes in Russia are a big worry.
Danish FX battle carries collateral damage risks 12 Feb 2015 Denmark’s latest tactic to curb its currency’s strength against the euro is a refusal to sell treasury bills. The central bank says lower market liquidity would be just a “cost of war.” Pension funds and banks might well find that it is the least of their worries.
Aena IPO marred by its success 11 Feb 2015 The privatised Spanish airports group rose 20 pct on its debut thanks to a chunky yield and faith in the Iberian recovery. The issue did not look underpriced based on fundamentals. Even so, in Spain’s politically charged atmosphere, taxpayers may feel shortchanged.
ING looks good in band of 2008 EU bank disasters 11 Feb 2015 The Dutch lender is the first of the big state-rescued banks to repay capital and resume dividend payments. The lack of an investment bank and of bad pre-bailout deals helped. And the government couldn’t pressure ING to show a profit on its equity stake – since it didn’t own one.