Chrysler impasse needs Fiat to make first move 24 Sep 2013 A year-long shareholder dispute about the value of the U.S. automaker has now led to an IPO filing. Listing would be an expensive waste of time. The sensible road out of this boggy no man’s land is marked “compromise”. Fiat is best placed to crank the process into first gear.
Telefonica set to call the shots in Italy 24 Sep 2013 The Spanish group is raising its stake in the company that controls Telecom Italia. This should break the deadlock over the indebted Italian operator, and prompt a breakup of TI’s Brazilian arm. A sale would help cut debt at TI - and strengthen Telefonica’s position in Brazil.
CIC’s potash stake bodes ill for cartel revival 24 Sep 2013 The Chinese sovereign wealth fund’s 12.5 pct stake in Uralkali will give Beijing some leverage in the Belarus-Russia potash spat. A purely financial investor might prefer a return of the producers’ cartel. But China is unlikely to support any move to drive up global prices.
No quick fix for long-term bonus plans 24 Sep 2013 Fidelity says European executives should wait five years to benefit from long-term bonus plans, even if share grants vest sooner. That makes intuitive sense. But companies may have to pay more to secure top talent as a result. Case-by-case implementation would be wise.
Fixed income lull could be more than flash in the pan 23 Sep 2013 Investment banks are warning that third-quarter revenue from trading debt, currencies and commodities will be down. That partly reflects a knockout quarter last year. But Fed tapering and tougher leverage requirements are good reasons why activity may settle at a lower level.
Germans’ vote for euro comes with a few spices 23 Sep 2013 It was a close call, but Germany’s new anti-euro party eventually failed on election day. Despite Deutschmark nostalgia and inflation phobia, the country remains immune to euro scepticism. The AfD could, however, create some headaches for Merkel - and the rest of Europe.
Merkel’s triumph maintains Europe’s muddle-through 23 Sep 2013 The exalted chancellor still needs a partner, probably in a grand coalition with the left-of-centre SPD. That will not bring big policy changes. Europe should brace for more fiscal squeezes and slow progress on banking union. But the new coalition’s lifespan may be short.
Corporate group-think will lead to shared FX pain 23 Sep 2013 Currency swings will make Adidas miss its targets. The German sportswear maker won’t be alone - most European companies are fashion-followers in not fully hedging foreign exchange. There are good reasons for not standing out from the crowd - but that sometimes brings group-pain.
Hugo Dixon: Euro zone needs anti-boom activism 23 Sep 2013 The ECB’s plan to keep interest rates low for an extended period could ultimately fuel booms in countries such as Germany. That’s the problem with a one-size-fits-all monetary policy. The solution is for countries threatened by booms to pursue vigorous counter-cyclical policies.
Review: Merkel’s hidden European agenda 20 Sep 2013 Her recent electoral triumph highlights that Angela Merkel is clearly an effective politician. A new German biography depicts a principled woman who is committed to a Europe of strong nations - bound together more by mutual commitments than by Brussels bureaucracy.
Three key questions for Germany’s election night 20 Sep 2013 The outcome of the Bundestag election on Sunday isn’t as certain as it looked a few weeks ago. The results of the FDP’s liberals and of the new anti-euro party will be key to Angela Merkel’s future. And the social-democrats aren’t eager to form another grand coalition with her.
RWE’s dividend cut vital, but poorly communicated 20 Sep 2013 Germany’s second-largest utility has bowed to the inevitable and slashed its dividend. Deep structural changes of the country’s energy market are mauling RWE’s medium-term profit prospects. While necessary, RWE’s painful actions could have been better stage-managed.
Foxtons makes fittingly brash London market debut 20 Sep 2013 The estate agent’s IPO got its full price and a 649 mln stg valuation. The stock popped 21 pct. BC Partners even sold a majority stake, a bit of a no-no for private equity nowadays. It’s London property all over: a sale at the asking price and the buyer still gets a quick flip.
Failed petrostates threatened by new oil bounty 20 Sep 2013 Oil majors are becoming less tolerant of the political risks and corruption they’ve coped with in the past. That’s bad news for the likes of Nigeria or violence-prone Libya. With safer crude on offer in the U.S. and elsewhere, troubled states risk an exodus of expertise.
JPMorgan’s management failings beggar belief 19 Sep 2013 Many of the Whale fail’s gory details were already known. But U.S. and especially UK watchdogs have given the most jaw-dropping account yet of how the bank mismanaged the trading book, responded to the crisis and misled its regulators. CEO Jamie Dimon has even less wiggle room.
Fed does to Europe what ECB, BoE couldn’t 19 Sep 2013 The U.S. central bank’s non-taper has done more for European money market rates in one day than the ECB and the Bank of England’s “forward guidance” policies did in weeks. Policymakers across Europe will be glad for the help, but it makes them look weak. That is a problem.
Chinese cash could speed up Peugeot’s recovery 19 Sep 2013 Stricken carmaker Peugeot is reportedly contemplating a capital tie-up with its Chinese peer Dongfeng. If the French find a way to avoid antagonising their other key partner General Motors, such an alliance could send their tentative turnaround into higher gear.
Bernanke is trapped by a discredited assumption 19 Sep 2013 The Fed chairman’s continued bond-buying pours fuel on market fires. The dire legacy of the last credit boom is yet to be overcome but Ben Bernanke still seems to believe he can ignore the dangerous side effects of easy money. He needs to embrace macro-prudential regulation.
Grand Theft Auto grapples with brutal economics 18 Sep 2013 The latest instalment of the gangland video game could bag $1 bln in sales. That would relieve investors in developer Take-Two. Cranking out apps is cheap, but console game makers have development times and budgets to match Hollywood. With costs still rising, high scores matter.
Early end to Cyprus’ capital controls no sure bet 18 Sep 2013 The Cypriot president says that restrictions in place since March could be lifted in January. Nicosia has been getting through the many reforms needed before such a move can be safely contemplated. But whenever it happens, more remains to be done to avoid a capital flight.