Time for Britain’s buyside to think creatively 3 Dec 2013 The UK’s new Investor Forum is ostensibly concerned with improving corporate governance. It also wants to channel its combined wisdom into finding new ways to fund promising areas such as biotech or infrastructure. That would benefit the economy and savers alike.
“Secular stagnation” lament revives wealth paradox 3 Dec 2013 Larry Summers has warned of long-term stasis in rich nations. If the former U.S. Treasury Secretary is right, emerging markets will need to invest more to end the savings glut causing the malaise. But that means confronting an old puzzle: why hasn’t capitalism solved the problem?
Versace’s valuation is as full-on as its outfits 3 Dec 2013 The Italian fashion house is sizing up outside investors and reckons it can triple in value in 3 years. There is real potential, because Versace is so far behind industry trends. But a big price tag for a skimpy stake alongside a powerful family? That’s a hard look to pull off.
Ukraine’s European future needs space for Russia 2 Dec 2013 Demonstrators in Kiev want to boot out the president, who closed the door on a deal with the EU in order to stay close to Moscow. It’s not so easy. Ukraine is broke and its government has failed. It needs help now. And Europe hasn’t paid enough attention to Russia’s concerns.
Markets see only one shade of Mark Carney 2 Dec 2013 Sterling and gilt yields rose after the Bank of England governor said mortgage lending subsidies would end. Traders saw the move as a proto tightening. Maybe. But the BoE could equally be giving itself room to delay rate rises. Markets see black or white when the picture is grey.
BoE’s small-firm stimulus is blueprint for Draghi 2 Dec 2013 The European Central Bank is reportedly mulling cheap loans to banks to gee up lending. The newly tweaked UK Funding for Lending scheme shows this isn’t easy, and replicating it in the euro zone would be even tougher. But Europe’s businesses need a leg-up even more than the UK’s.
ThyssenKrupp’s capital hike may not suffice 2 Dec 2013 The German steelmaker is raising $1.6 bln selling assets to Arcelor and Nippon Steel. But other disposals have collapsed and shareholders now have to find almost 1 bln euros to help cut debt. Even with Thyssen’s operational progress, the measures won’t put it in the comfort zone.
Hugo Dixon: Italy has two chances post-Berlusconi 2 Dec 2013 The first is that PM Enrico Letta will push through reforms now Silvio Berlusconi has been kicked out of parliament. If not, Matteo Renzi – who is expected to become the Democrats’ leader on Sunday – should force elections and show he is as radical in deed as he is in words.
Pearson makes a tidy turn in the merger market 29 Nov 2013 The UK publisher is selling Mergermarket to private equity at an enterprise value of 382 mln stg - far more than it paid for the news and data firm. Loyal subscribers, good cashflows, and potential bolt-on deals are probably bigger draws for the buyer than any M&A resurgence.
Dutch downgrade is a lagging indicator 29 Nov 2013 The Netherlands’ loss of triple-A status stems from weaker growth. The economy is recovering slowly from a housing bust that has pulverised household finances. But property prices are bottoming, debt is low and reform is underway. Other euro zone members are bigger worries.
Moncler asks investors to wear premium valuation 29 Nov 2013 The private equity-backed maker of feather-filled winter jackets is preparing a Milan IPO of up to $1.1 bln. Entrepreneurial Chairman Remo Ruffini has built an impressive business, with plenty of growth potential. But the price looks rich set against established luxury brands.
Review: A no-nonsense recipe for retail success 29 Nov 2013 Having spent four decades building up Iceland, the UK frozen-food chain, Malcolm Walker makes retail sound pretty simple. A 215 mln stg fortune suggests he knows what he’s doing. Still, the many travails in his autobiography show how easily things can go wrong in the food business.
Carney can do more to curb mad UK house subsidies 28 Nov 2013 The Bank of England governor has rightly binned incentives for banks to pile into mortgage lending. Further focusing cheap central bank funding on small companies also makes sense. But Carney is still pulling his punches. He should demand changes to the UK’s Help to Buy scheme.
Repsol’s boardroom brawl won’t end peacefully 28 Nov 2013 The Spanish oil firm’s second-largest shareholder, Mexico’s Pemex, has publicly attacked Repsol’s boss, his record and his pay. It may have a point, but the form is poor. An open, protracted conflict is in no-one’s interest. It is unlikely to have a happy ending.
UK budget must deliver homes not bubbles 28 Nov 2013 George Osborne can boast that the UK economy is growing and the deficit is diminishing. But the recovery is too typically reliant on house price inflation. The chancellor’s budget update should aim for radical change: getting finance to work for house building, not house bubbles.
Fair exec payoffs require flexibility 28 Nov 2013 Peugeot’s outgoing CEO is waiving a 21 mln euro pension pot; Siemens’ ousted boss is getting 17 mln euros. One is penance for doing a restructuring, the other a reward for profit warnings. Both show that fairness in executive exits is a matter of judgment, not contracts.
German politics contain tail risk for Europe 27 Nov 2013 Having negotiated a coalition treaty with Angela Merkel, Germany’s Social Democrats now face the harder job of selling the deal to a sceptical party base, which has the last word in an upcoming vote. A “nein” is unlikely, but possible – and would cause political havoc in Europe.
Cameron’s fear of migrants will harm UK economy 27 Nov 2013 The British premier’s restrictions on visitors from Eastern Europe betray a fear of losing votes to the UK Independence Party. But clamping down on immigration is leading to policy inconsistency. It harms British business and risks reducing earnings from tourism and education.
Europe’s pay populism makes a useful distinction 27 Nov 2013 Swiss voters rejected broad salary limits for top executives. Yet the Dutch are plotting a banker bonus cap that makes existing EU curbs seem generous. The discrepancy is understandable. While pay shouldn’t be regulated, the taxpayer-rescued finance industry isn’t showing much restraint.
Give thanks for the pope’s anti-free market views 27 Nov 2013 Wall Street bigwigs often lean economically right and socially left. Pope Francis takes the opposite stance. He might like the relatively uncommercialized Thanksgiving holiday. And over turkey, America’s rich might ponder a financial system that “rules rather than serves.”