Yellen and Carney miss chance for hard reset 20 Mar 2014 Central bankers say they’re paying more attention to the financial cycle but old economic fixations persist. The ECB hasn’t started to regulate banks and Janet Yellen’s Fed sounds as oblivious as Ben Bernanke’s. There’s progress at the Bank of England, but much more to be done.
Euro zone periphery trade is running out of gas 20 Mar 2014 Investors keen on a recovery story have been piling into assets in Spain, Italy, Portugal and Greece. Some periphery assets now look expensive. Further gains need two conditions to be satisfied – politicians enacting more reforms and companies growing profits.
Credit Agricole upends French bank hierarchy 20 Mar 2014 The farmers’ bank is reversing its failed pre-crisis strategy of careening into the euro zone periphery. CredAg will instead focus on a tighter range of European markets. Yet its return and payout pledges now look juicier than more celebrated domestic rivals BNP and SocGen.
Next flaunts rewards of getting online right 20 Mar 2014 The UK retailer’s annual results look good. A trend of big payouts and EPS growth has made the stock a must-have. The shareholder-friendly strategy could start to look tired, if rivals smarten up. But online strength means Next investors can now look overseas for inspiration.
Confused Fed adds to emerging market muddle 20 Mar 2014 U.S. policymakers have sent a garbled message about their intention to raise interest rates. Increased uncertainty makes global bond and currency markets more volatile. That raises the risks for developing countries already battling with slower growth and sagging investor morale.
JPMorgan commodities sale shows trading’s opacity 19 Mar 2014 The bank is selling what is probably a low-return unit with regulatory headaches to privately held Mercuria. The lack of financial details makes the price hard to judge, but at $3.5 bln the buyer seems to be paying top whack. With commodities under pressure, that’s a bold move.
UK’s political budget transfers from young to old 19 Mar 2014 The chancellor has given retirees freedom over their pension pots, among other perks for saving. He hopes to unleash spending, help growth and attract votes. But the growth bet is risky, and the budget did far less to help the young or address the UK’s housing shortage.
British insurers trade in damaged market 19 Mar 2014 Usually, governments discuss new policies with everyone concerned. But the UK Treasury has thrown the insurance sector into turmoil with a surprise plan to stop forcing pensioners into annuities. Share prices have gyrated. It will be a while before investors get over the shock.
BMW shares can come out of the Daimler shadow 19 Mar 2014 For the last year, Daimler’s impressive turnaround has inspired investors. It’s about time for them to rediscover BMW’s strength. A 7 pct share price jump after a strong 2014 outlook statement is a start. But BMW doesn’t yet have the premium over Daimler that it deserves.
Inditex deserves to come back into fashion 19 Mar 2014 Slowing earnings and currency risks have upset investors. But 2013 results from the world’s top fashion retailer show its business model is intact. Stores have been revamped, Europe is recovering, and web sales are promising. Shares in the owner of Zara could rise further.
MPS owner’s bad hand wins in risky recap poker 19 Mar 2014 The indebted charitable trust that owns ailing bank Monte dei Paschi wagered its country’s reputation and balance sheet when it blocked a rights issue. Yet the boom in peripheral assets has enabled the foundation to sell stock to repay debt. A happy ending to a bad situation.
Bank of England goes for subtle shakeup 18 Mar 2014 The UK central bank has appointed an outsider to look after markets. Nemat Shafik’s challenge is to be close to traders, but not too cosy. Insider Spencer Dale will oversee financial stability. He’ll be most effective if he emulates his free-thinking predecessor Andy Haldane.
A credible strategy for Barclays’ investment bank 18 Mar 2014 The lender’s investment banking unit makes inadequate returns and pays too much. Both problems can be fixed by shedding weaker business units, leaving a franchise that attracts staff loyalty through good times and bad. David Walker’s successor as chairman has a key role to play.
Mystery bond shift doesn’t dent faith in dollar 18 Mar 2014 An unexplained $105 billion shrinkage in the Fed’s store of Treasuries held for other central banks caused no market ripples. That’s testimony to investors’ belief in the dollar’s reserve status. Even more remarkable: the world’s most liquid bond market still holds big secrets.
Volkswagen has no reason to improve Scania bid 18 Mar 2014 Minority owners of the Swedish truckmaker want more than the 53 pct premium offered by Volkswagen. They’re right to try, but limited medium-term synergies don’t justify topping up a generous bid. Sadly the German carmaker can still fall hostage to its executives’ oversized egos.
Sainsbury entrenches UK grocers’ market discount 18 Mar 2014 Shares in J Sainsbury, and its UK rivals, are cheap for a good reason. If their price war ends, British supermarkets might narrow the one-third discount to European peers and historic norms. But the latest news from Sainsbury suggests this won’t happen any time soon.
Ukraine rescue needs American Tea Party signoff 17 Mar 2014 Talk about irony. Obama will be the cheerleader for a $15 bln fund bailout of the embattled state. Yet the Republican right is still blocking an IMF overhaul agreed in 2010 giving extra power to the likes of China and Brazil. To get them to help Ukraine, the GOP has to budge.
EU’s Crimea sanctions only good as opening gambit 17 Mar 2014 Vladimir Putin won’t care much about the travel bans and asset freezes imposed by the EU on 21 Russian individuals. But these sanctions only make sense as a first-step response to Moscow’s actions in Ukraine. It’s now up to EU leaders to get serious about retribution.
Pirelli ownership structure imitates Russian dolls 17 Mar 2014 Russian oil group Rosneft has bought half of the investment company that owns the biggest stake in Pirelli. The move has some industrial logic and still leaves tycoon Marco Tronchetti Provera in control at the tyremaker. But it dampens hopes of a premium bid for the company.
RWE’s $7.1 bln oil deal brings respite not rescue 17 Mar 2014 The struggling German utility is selling its DEA oil and gas unit to investors led by Russia’s Mikhail Fridman. RWE has secured a good price which reduces its future capex burdens. But the disposal leaves unanswered questions about RWE’s financial strength.