Hugo Dixon: Renzi still living on borrowed time 2 Feb 2015 The Italian prime minister did well to secure the election of a president against the wishes of his quasi-partner, Silvio Berlusconi. Matteo Renzi’s victory could allow him to accelerate reforms. He mustn’t waste the chance. Italy’s serious problems have not gone away.
Ryanair finds it harder to get “always better” 2 Feb 2015 Europe’s largest low-cost carrier upped its fiscal-year forecast again, eyeing a 60 pct net profit jump. But sober days lie ahead. Hedges limit the impact of lower oil prices. Other costs will rise. After gaining nearly 50 pct lately, the richly valued stock looks vulnerable.
Why the sky-scraping deal fees over Canary Wharf? 30 Jan 2015 Qatar’s $4 bln swoop on Wharf-owner Songbird didn’t take long. Once big shareholders folded, the defence against the lacklustre offer collapsed. Yet the target’s support team could pocket up to $45 mln. M&A due process certainly doesn’t come cheap.
Russian central bank chooses banks over rouble 30 Jan 2015 A surprise interest rate cut suggests the central bank is more concerned about the economy than the value of the currency. Worries about the banking sector’s solvency could explain the move. The downside: Russia could end up with both high inflation and a deep recession.
Review: What the Great Depression taught the Fed 30 Jan 2015 Ben Bernanke is an expert on the famous crash. But Barry Eichengreen argues in his new book that the Fed boss during the 2008 crunch hadn’t learnt the lessons of the boom preceding the bust. Bernanke’s knowledge helped with crisis management, but it is too early to say how much.
StanChart’s woes stretch far beyond corner office 30 Jan 2015 Worries about bad debts and a sliding share price have raised doubts about Chief Executive Peter Sands’ future. The main challenge for the emerging market lender is to boost returns and retain capital as growth slows. If Sands leaves, his successor will face the same issues.
Qatar stake is vote of confidence in BA-owner IAG 30 Jan 2015 Taking a 10 pct stake worth $1.7 bln makes Qatar Airways the biggest investor in British Airways’ parent company. The immediate strategic benefit is limited: the groups already cooperate and IAG gets no new capital. But a deep-pocketed, long-term backer can be helpful.
Greek deposits fly between a rock and a hard place 30 Jan 2015 One remedy to capital flight would be to give so-called emergency liquidity assistance to Greek banks. But heavy use of ELA could mean big losses if Greece left the euro. The alternative is to copy Cypriot capital controls. That, though, would be politically toxic in Greece.
ECB-induced distortions sprout in debt markets 29 Jan 2015 Mario Draghi’s asset-purchase plans are warping bond markets. The most obvious and benign consequence is a drop in yields. But there are also insidious effects. Investors shun anything the ECB won’t buy. And market liquidity will become patchier as the programme progresses.
Rob Cox: Podemos can improve Spanish capitalism 29 Jan 2015 After Syriza’s victory in Greece, investors are fretting that Spain’s “We Can” party could derail reform plans and fiscal discipline. They needn’t worry. The Podemos target is the demon of corruption. Even if the movement has already peaked, it has done the country a service.
Deutsche Bank strategy revamp needs to be radical 29 Jan 2015 The German lender beat forecasts in the fourth quarter. But return on equity was just 2.6 pct, and legal and regulatory hits this year add further uncertainty. A looming strategic update will have to set out how the group’s focus on capital markets can turn things round.
Shell refuses to hit panic button 29 Jan 2015 The Anglo-Dutch major, which met its 2014 targets, doesn’t want to overreact to the oil price rout. It has cut three-year capex plans by a modest 14 percent and is maintaining the dividend. Shell has a strong balance sheet, but even it will need a sharper axe if oil stays low.
Mortgage freeze could hasten Greek bank reform 28 Jan 2015 Before Prime Minister Alexis Tsipras gets any euro zone deal on Greece’s public debt, he could make good on his promise of a permanent mortgage moratorium. That would inflict pain on the country’s banks – but ultimately force them to restructure.
Europe’s tech hits outrun local venture capital 28 Jan 2015 Britain’s Shazam touts a $1 bln valuation and TransferWise has raised $58 mln. Big sums flowing into European tech are great for a sector long starved of capital. But VC there is still dwarfed by the U.S. industry. A narrower gap would benefit entrepreneurs, staff and investors.
Monetary easing is the dominant trend 28 Jan 2015 The vogue in central banks is to reduce the cost of money: at least nine have eased in January. That suits a time of spreading disinflation and poor growth. The Fed, which updates markets today, is sitting tight. So is the BoE. But they may get caught up and delay rate rises.
Fiat shareholders opt for hope over adversity 28 Jan 2015 The automaker hit 2014 earnings targets. But its margins are abysmal, its debt load high and the dividend’s still suspended. There’s some progress, though, even in Europe. The upcoming Ferrari IPO, boss Sergio Marchionne’s reputation and a weak euro are keeping the stock purring.
Currency market still scarred by Swiss trauma 28 Jan 2015 Brutal swings seen just after the Swiss central bank suddenly abandoned its franc cap have faded. But price signals and perplexing moves suggest the extraordinary gyrations left their mark. Singapore’s surprise easing and continued Swiss official musings will add to the jitters.
Qatar’s hostility pays off in Canary Wharf battle 28 Jan 2015 The Gulf state has won over the three other big investors in Songbird, the AIM-listed majority owner of the London financial district. Songbird’s board was caged in: with justification, it sees the $4 bln bid as cheap. But minority investors could suffer by holding out.
Swiss mobile telecoms IPO is likely to shine 28 Jan 2015 Sunrise aims to raise about $2 bln in an upcoming flotation. As No. 2 in a rich market with a benign regulator, the stock offers yield, growth, stability and a decent discount to market leader Swisscom. Just one cloud looms: the outside risk tycoon Xavier Niel causes trouble.
Italy shows Germany the way forward in bank reform 28 Jan 2015 The shake-up of Italian regional banks can be a role model for fixing the notorious Landesbanken. These German state-owned lenders are short of a business model and endanger financial stability. The ECB has the tools to act. But Italy’s will for change is lacking in Germany.