Review: A prophet for the age of endarkenment 18 Nov 2016 John Gray foresaw the Trump era. "Enlightenment's Wake", published in 1995, predicted that grand ideas would be replaced by ethnic and religious conflict, authoritarian regimes and great power rivalries. Still, the newly-relevant book offers some hope for despairing liberals.
Deutsche bonus clawback can work even if it fails 18 Nov 2016 The struggling German bank wants to cancel former executives' unvested and previously suspended compensation awards. Deutsche Bank won't retrieve enough to boost capital meaningfully. But reassuring shareholders whose rewards have never matched employees' is still worthwhile.
VW finally makes it to third gear 18 Nov 2016 The German carmaker has convinced unions to let it shed 30,000 jobs. That's a second big step, after settling a big emissions cheating case. Next comes the shift to electric and self-driving cars, and beating an overly modest 4 pct operating margin target for its flagship brand.
VW rejigs China partners but keeps hand on wheel 16 Nov 2016 Its Audi unit could move some production from struggling FAW to a joint venture with SAIC, adding firepower to compete with Mercedes Benz. After 30 years in China the Germans need not worry about JV partners becoming rivals, thanks to government coddling and easy profits.
Deutsche capital weakness is transatlantic problem 15 Nov 2016 The German bank's leverage ratio in its U.S. division is the lowest of Europe's biggest banks, Federal Reserve data show. Deutsche Bank has met the minimum threshold 18 months early and beat Barclays on a risk-weighted metric. Investors could still punish it for lagging the pack.
Siemens pays full price for extra pixels 14 Nov 2016 The German engineer is buying U.S. software maker Mentor Graphics for $4.5 bln including debt. Adding electronic design automation software to its digital offering makes sense. For the deal to add value, however, Siemens will have to outperform its own target for extra sales.
Siemens gives itself chance to prove it can do M&A 10 Nov 2016 The engineer will spin off its healthcare unit, and probably retain a majority stake. The margin-rich business could be worth $40 bln, fetching a 38 pct premium. The increased M&A firepower will give Siemens a chance to correct a record on deals which is rather less impressive.
Trump gives Europe’s iconoclasts fresh credibility 9 Nov 2016 Anti-establishment politicians in Germany, France and the Netherlands hailed the next U.S. president. He shows inexperience and nationalism are no barrier to victory. Mainstream parties could borrow their rivals' clothes before elections next year. But time is not on their side.
E.ON sticks to dividend it cannot afford 9 Nov 2016 After a 6-bln-euro writedown in the third quarter, the Germany utility's liabilities are on track to overtake its assets. It needs 2 bln euros of cash to pay for nuclear cleanup but still aims to pay a 400 mln dividend. That's a campaign pledge that belongs on the scrapheap.
Volkswagen chairman’s position is untenable 7 Nov 2016 Hans Dieter Poetsch was the wrong choice from day one. The former finance director and long-time VW insider is now under criminal investigation in Germany. While Poetsch remains at the helm of the carmaker's board, it cannot properly turn a corner.
ProSieben’s golden M&A formula merits more credit 4 Nov 2016 The German broadcaster's 515-million-euro capital increase has got the thumbs down from investors. Their dilution anxiety is overdone. Judging by the group's successful 1.1-billion-euro digital M&A spree since 2014, its replenished war chest can quickly yield decent returns.
Adidas can’t keep up with Olympian expectations 3 Nov 2016 The German sports brand's revenue is growing fast, and its operating margin is increasing. Still, the 15 pct rise in earnings in the third quarter fails to justify a 55 pct rise in the share price this year. Adidas doesn’t deserve a 35 pct premium to more profitable Nike.
Carmakers get stuck in irrational R&D pile-up 2 Nov 2016 VW spends more on research than Apple, showing carmakers are among the most generous companies with their R&D budgets. Making cars cleaner, safer and autonomous is a must, but too many engineers are reinventing the same wheel. They would do better to team up.
Cox: First Boston-Bankers Trust may unite in 2017 1 Nov 2016 Credit Suisse and Deutsche Bank bought the Wall Street firms decades ago but are still subscale in the United States. The two could limp along, never meeting their cost of capital. Joining forces, and spinning off the combination, is an alternative with many virtues to consider.
Merkel’s climate-change zeal turns into hot air 2 Nov 2016 The German chancellor fought hard for tough global carbon reduction targets. Yet at home, implementation of the Paris accord is gridlocked by fears of job losses, and an important plan has been delayed. If Angela Merkel cools on fighting climate change, the world is in trouble.
Higher global bond yields have solid foundations 28 Oct 2016 The recent rise in benchmark yields is not as dramatic as last year’s surge - but far more significant. Last year market quirks played a big role. This time the drivers are expectations for higher inflation and stronger growth. These are harder for investors to brush off.
Volkswagen is painting over its rust spots 27 Oct 2016 The troubled $71 bln German carmaker reported a surprising 17 pct increase in quarterly operating profit and a better outlook. Yet the improvements owe more to accounting small print than better operating performance. At least the group's cash cushion is still expanding.
GE plays tactical hardball with Elliott 27 Oct 2016 The U.S. industrial firm is feuding with the hedge fund over two 3D-printing companies. It refused to cave in to Elliott on one, opting for a rival instead, and raised its bid on the other. This is a decent enough compromise and will stop activists from seeing GE as easy prey.
Fair winds not enough for Deutsche and Barclays 27 Oct 2016 The European banks gained from Wall Street’s bond trading fervour in the third quarter. But legal costs dragged return on tangible equity down to 2 pct at Deutsche and 3.6 pct at Barclays. The UK lender has fewer troubles than its German peer, but both need good times to last.
Bayer’s strong earnings can’t outweigh dismal deal 26 Oct 2016 The German chemical giant's quarterly results beat expectations for the third time running. Bayer's shares have been dragged down regardless by its overpriced $66 bln takeover of Monsanto. It would take fanciful improvements in performance to make good the $15 bln of lost value.