Spain’s import surge underlines need for reform 30 Jul 2014 Spain is growing faster than expected and creating more jobs. But exports are stalling due to the weak euro zone recovery, and growth is driven by a pickup in internal demand, which is boosting imports. The pattern isn’t sustainable over the long term.
Edward Hadas: Not all banks are alike 30 Jul 2014 Ideology and intellectual laziness have led politicians and regulators to think of banks solely as profit-maximising institutions which only pretend to care about the future. History, solid analysis and the thriving of state investment banks tell quite a different story.
EU will find Russian sanctions worth the pain 30 Jul 2014 Europe has coordinated with the U.S. on broad new measures that will hit Russia hard. The weak EU recovery will also be hit. If the sanctions help change Moscow’s policies, the suffering will have paid off. If not, it makes sense to put Russia in financial quarantine.
Barclays turnaround stays on the rails – for now 30 Jul 2014 The UK lender’s vital investment bank had a mixed second quarter. Fixed income trading was worse than peers on a sterling basis, but advisory and financing fees leapt. Barclays’ challenge is to stay in touch with rivals as its cuts start to really kick in. That won’t be easy.
Forex options hint at end of preternatural calm 30 Jul 2014 When daily action in most financial markets is so subdued, almost any signs of activity are noteworthy. Shifts in FX options prices, which suggest a future increase in currency volatility, are basically good news. Some investors are getting ready for choppier waters.
Bank of Cyprus picks good time to de-Russify 30 Jul 2014 The island-state’s lender is raising 1 billion euros of new capital to help it pass the euro zone’s upcoming stress tests. That will also reduce the percentage of Russian investors on its share register, and help it look slightly more like a normal bank.
Safeguarding the A380’s future will cost Airbus 30 Jul 2014 Investors welcomed the aircraft maker’s strong sales and improving margins. But the slow-selling flagship A380 needs a costly redesign and could benefit from Airbus’ expertise in modernising proven models. In the short run, that will dent profit.
Russia casts mid-sized shadow over BP 29 Jul 2014 The UK oil major’s results benefitted from strong upstream earnings, including a big contribution from its stake in Russian firm Rosneft. Sanctions and a court judgment have made Russia look less reliable, but the dividend looks safe. BP will have to rely more on self-help.
Mall rats join up to take on Zara and Amazon 29 Jul 2014 Klepierre is buying Corio, a weaker Dutch rival, for 7.2 bln euros including debt. That’s a reasonable price and will turn the French group into Europe’s biggest dedicated mall owner. With retail giants and e-commerce making life harder for shopping centres, scale matters.
Deutsche/UBS: there’s life in EU bond trading yet 29 Jul 2014 The two banks and Credit Suisse outperformed Wall Street in second-quarter debt trading. That bucks a trend that has seen U.S. rivals take market share. Of the two, Deutsche Bank looks better placed to gain from any sustained bounce back in fixed income.
Nomura trading prowess demands fuller explanation 29 Jul 2014 The Japanese investment bank’s fixed-income arm is unfazed by broader gloom. Revenue increased 7 pct in the latest quarter. The lack of an old, bad trading book probably helps. It’s hard to tell, though, just how Nomura outflanked rivals, and thus whether success is sustainable.
Renault is showing a healthy turn of speed 29 Jul 2014 Demand is weakening in developing countries and there are some cashflow concerns. But the French car manufacturer is adding market share in Europe, its cost control is relentless, and profit margins are rising. Renault is well placed to move up through the global field of automakers.
Yukos ruling casts Russia further into the cold 28 Jul 2014 The Hague’s arbitration court ordered Russia to pay $50 bln to the expropriated oil group’s former shareholders. Moscow will appeal, but could lose again. It will then have to either blow a hole in public finances or ignore the penalty – and spend years in debtors’ hell.
Ripping off the BoE is new low for British banking 28 Jul 2014 Lloyds was kept afloat by billions of pounds of emergency liquidity from the Bank of England. It has now emerged the UK bank was fiddling repo rates to lower the fees on that lifeline. Every revelation like this sets back the sector’s bid to regain public and political trust.
Hugo Dixon: Euro crisis is sleeping, not dead 28 Jul 2014 The euro zone is suffering from stagnation, “lowflation,” unemployment and debt. It’s not well placed to weather shocks, such as a further deterioration of relations with Russia. A pact to boost inflation and ramp up structural reform is the best way to insure against disaster.
Reckitt pharma spinoff looks like a cold turkey 28 Jul 2014 The UK group is kicking its Suboxone habit. It plans to demerge its prescription drugs unit whose lead product is a heroin substitute. Reckitt is open to a trade sale and that might be more remunerative, but revenue and profit declines mean valuations could be thin either way.
Sky Europe transforms BSkyB investment case 25 Jul 2014 The UK satellite group is paying its 39 pct shareholder Fox 4.9 bln stg for sister Sky outfits in Germany and Italy. The businesses are close already and the price looks reasonable. Sky Europe promises scale, growth, and cost savings. But leverage will soar and cash returns shrivel.
RBS gains much-needed buffer against bad news 25 Jul 2014 Investors welcomed the UK bank’s lower bad debts, plus asset sales coming faster than expected and at higher prices. The progress brings capital targets closer, lessens pressure on RBS to get a high price for its U.S. arm, and makes forthcoming litigation costs more bearable.
UK’s strong GDP has a soft centre 25 Jul 2014 The headline - 0.8 percent second-quarter growth - sounds good. But construction shrank and industrial production was weak. Only services were strong. It sounds like a warning of future problems. Expectations of a UK interest rate rise may be delayed, leading the pound down.
BES clear-up still leaves Angolan question hanging 25 Jul 2014 The troubled Portuguese lender’s three parent entities have all now sought creditor protection. That should clarify the bank’s losses and ownership, leaving Angola as BES’s key uncertainty. There is a way to sort this out too – but it isn’t pretty.