Revenue leeway may create too much Autonomy 30 May 2014 Globally aligning rules on how to book sales, as was agreed this week, should create greater consistency. It means more fine print to scour, however, while extra flexibility for U.S. companies could also invite trouble. A cautionary tale may be HP’s allegations against Autonomy.
BNP Paribas fine farce requires swift resolution 30 May 2014 The French bank’s shares sank 6 pct after a media report that penalties for sanctions breaches could top $10 bln. Doubts about the intentions of the U.S. authorities may be creating a false market in BNP shares. Worse, the delay raises the prospect of possible EU retaliation.
UK’s duff credit easing is still a model for ECB 30 May 2014 The Bank of England’s Funding for Lending scheme isn’t boosting bank credit. A rumoured ECB version will likewise fail to spur a massive wave of lending if demand is weak. But a round of credit easing that cuts elevated peripheral bank funding costs would still be worth a try.
Spanish soccer needs a financial bootcamp 30 May 2014 Spain hold the World Cup and Real Madrid are European champions. Yet the domestic game is less healthy, with many clubs deep in debt. The state is enforcing better financial management. Attracting foreign investment, and sharing TV money more evenly, could help teams shape up.
Low volatility and high doubt hamstring markets 29 May 2014 Trading volumes are dipping in several asset classes. Low price volatility and tougher regulation can be blamed. So can investors’ bruised confidence, after some big bets went awry this year. It’s safer to sit still than to move in what might prove to be the wrong direction.
FCA’s Hannam win makes dealmaking that bit harder 29 May 2014 Former JPMorgan rainmaker Ian Hannam comprehensively failed to overturn a finding he committed “market abuse.” This vindicates the UK watchdog’s zero-tolerance stance. Handling inside information is already risky and complex. This ruling makes things a little bit trickier.
The morning after Scotland votes for independence 29 May 2014 Most analysts have assumed Scots vote No in September’s referendum, but Yes-voters are gaining ground. If they prevail, critical questions that are currently completely up in the air will need to be answered rapidly. The most pressing one will be: who bails out Scottish banks?
Smith & Nephew returns to M&A spotlight 28 May 2014 The British medtech firm’s shares jumped on a report of bid interest from Stryker. The U.S. rival ruled out bidding for six months. But the market looks keen on a takeover of S&N, the subject of perennial bid talk. There could be synergies, scale and tax benefits.
GE’s new Alstom bid makes Siemens a distant second 28 May 2014 The U.S. conglomerate pledged new jobs and an asset swap to improve its $16 bln offer for Alstom’s power units. France seems to be warming to a bid already backed by the board. Rival bidder Siemens looks increasingly like a stalking horse, used merely to wring more out of GE.
Edward Hadas: The problem with the Piketty problem 28 May 2014 The French anti-inequality economist has been accused of using bad data. But any weaknesses in compiling and adjusting figures pale in comparison to his confused use of mathematical theory and social history. Unfortunately, too many economists are ill-equipped to criticise.
Scottish independence is loser in data fight 28 May 2014 Campaigners for an independent Scotland project a separate country would be better off. The no campaign disagrees. No surprises there. The case from London is stronger, but the economics aren’t clear-cut enough to make a no vote on Sept. 18 a no-brainer.
Nestle’s skincare buy-in has opportunistic streak 28 May 2014 The Swiss company, best known as a chocolatier, is paying Canada’s Valeant $1.4 bln for the marketing rights to a clutch of beauty treatments. It is Nestle’s first big move in the sector after February’s deal with L’Oreal. There are wrinkles. But they are worth wearing.
Glaxo wrestles with its past 28 May 2014 A UK Serious Fraud Office investigation into the pharma group has knocked almost $2 bln off its market value. Fines in China are well flagged, but the scale of SFO’s concern is unclear, as is the cost of staying ethical in future. Investors are still betting on a benign outcome.
Financial elite finally wake up to inequality 28 May 2014 A conference on “inclusive capitalism” brought out the rhetorical best from Christine Lagarde and Mark Carney. The IMF and Bank of England bosses flagged inequality as a problem, rather than side-stepping it. Their backing could make it easier for politicians to take action.
P2P looks more enticing than Lloyds’ TSB 27 May 2014 Hedge fund Marshall Wace is offering immediate returns of up to 15 pct for investors in its new peer-to-peer lending vehicle. Lloyds’ soon-to-be listed TSB retail bank offers single-digit returns now and no dividends until 2018. To secure interest, a hefty discount is warranted.
Italy’s lesson for Europe: do your homework 27 May 2014 Matteo Renzi’s European election triumph will supercharge his reforms. The solid showing for a mainline party, despite a sickly economy, demonstrates that a strong domestic politician can be more appealing than euro-bashing. Hollande and Cameron could learn from the Italian PM.
Tighter regulations test illiquidity taboo 27 May 2014 Investment banks have pulled back from some once-lucrative trading businesses. Shareholders may regret the earnings hit and clients may bemoan wider spreads from less liquidity. That, though, may help the economy if the effect is mostly to reduce unhealthy financial activity.
Piketty spreadsheets set bad Excel example 27 May 2014 Authors who submit data to scrutiny deserve applause. The Financial Times’ critique of the French economist’s work shows it’s also risky. In a broad study, errors are almost inevitable. But Piketty could have helped himself – and the dismal science – with better Excel etiquette.
Hugo Dixon: EU leaders need to kickstart reform 26 May 2014 Much of Europe’s political elite was mauled in elections for the pan-continental Parliament. The convincing response is to reform. This means choosing a dynamic team to run the Commission, boosting competitiveness, and stopping EU meddling in things best left to individual states.
Failed bid would leave Astra under pressure 26 May 2014 Pfizer looks foolish for the way it handled a $119 bln offer for the UK drugmaker. But its shares have barely suffered. Astra remains independent and yet it is now under more scrutiny. Some of its shareholders welcomed a possible takeover - and could again.