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.
Hugo Dixon: Cameron lowers Brexit risk 17 Mar 2014 The UK premier’s wish list for EU reform is pretty moderate. Given that he will campaign to stay in the EU if he achieves his goals, the risks of Britain exiting Europe – already cut after the opposition virtually ruled out an In/Out referendum – have fallen further.
Total’s solar boast may prove short-lived 17 Mar 2014 The French oil giant’s CEO has bragged about the profit made on a $1.5 bln stake in SunPower. But that’s hardly the benchmark if Total’s aim is to build a long-term solar business. Moreover, the panel maker’s rich valuation and dimming prospects could soon weigh its shares down.
UK budget set to focus on all the wrong areas 17 Mar 2014 The coalition is set to extend housing subsidies and is likely to tinker with tax thresholds. But sorting the UK economy’s biggest issue – anaemic productivity – requires business investment. The government could do more, if it admitted there was more spare productive capacity.
Vodafone’s pricey Ono deal is rescued by savings 17 Mar 2014 The UK mobile giant is paying 7.2 bln euros for Spain’s top cable firm. A punchy 10.5 times 2013 EBITDA was enough to stop Ono floating instead. Still, this makes strategic sense. It should stack up financially too - if Vodafone delivers cost savings worth a promised 2 bln euros.
Market adjustment is not over yet 17 Mar 2014 Gold’s rise to a six-month high indicates rising fear and coincides with a retreat to assets seen as safe, including the yen and bonds. Emerging market woes may now hit developed markets more keenly. But the Fed seems intent on tapering, which will eventually be bad for gold too.
Hugo Dixon: Europe should give Cyprus a hand 17 Mar 2014 One year after a shock plan to raid bank deposits, capital controls remain in place. The economy hasn’t shrunk as much as feared, but the recession is still deep. The euro zone should help – principally by enabling the lifting of capital controls and the creation of a bad bank.
Lego clan beats Goldman in $1.5 bln ISS float 14 Mar 2014 An investment by the toymaker’s founding family helped cleaning giant ISS cut debt in 2012. At IPO this brought a 41 pct annual return. That beats the result for EQT and Goldman Sachs. They can just be glad to be out after over eight years of ownership and several failed exits.