Deutsche Bank show of virility would lack punch 10 Feb 2016 The German lender’s shares have jumped after reports it could buy back debt amid a wider market rout. The actual amount CEO John Cryan could raise is limited. As with ex-boss Josef Ackermann’s attempt to reject ECB liquidity in 2012, the boast is what counts.
German CDS imply bank doom loop is unbroken 10 Feb 2016 Market turbulence has led investors to snap up safe German bonds, yet the cost of insuring against a Teutonic default is up. Blame a rout in Deutsche Bank shares. Until Europe’s banking union is complete, governments are the ultimate backstop if big lenders get into trouble.
Deutsche hybrids: from poster boy to problem child 9 Feb 2016 The German lender has moved to reassure investors fretting about delayed coupons on its new AT1 securities, after CDS prices collapsed. Unlike hybrid forebears in 2008, AT1s should absorb losses. Yet instead of dampening volatility, the fear of a trigger is exacerbating it.
Darkening German economy could be Merkel’s nemesis 9 Feb 2016 Falling industrial production and weak exports suggest emerging markets may be chipping away at Germany’s economic miracle. Chancellor Angela Merkel has ridden out a refugee crisis. But if economic weakness is allowed to reach labour markets, her political fate could be sealed.
VW truck IPO would kill two birds with one stone 8 Feb 2016 The German carmaker is exploring all options for its 12 bln euro trucks arm, including a listing. A spinoff could raise new capital and simplify a complex giant. The only issue is that with the integration of MAN and Scania still in its infancy, the timing isn’t ideal.
China’s record waste deal is far from rubbish 5 Feb 2016 State-backed Beijing Enterprises is buying Germany’s Energy from Waste for $1.6 bln. Unlike some of China’s splashier foreign deals, this looks decently priced and makes obvious strategic sense. China badly needs more clean-technology expertise. Expect more trashy buys.
Daimler could spin its trucks into Ferraris 4 Feb 2016 Margins and market share are improving, but the German carmaker’s valuation gives little credit for its big truck business. Boss Dieter Zetsche might unlock value by listing that separately, as Fiat did with prize brand Ferrari. Truckmakers like Volvo fetch far higher valuations.
ThyssenKrupp salvation is right on its doorstep 29 Jan 2016 The German steel-making group’s turnaround has sputtered: shares are down 35 pct in a year and the outlook is tepid. A better corporate structure could create new oomph. A full-blown breakup may be tricky, but fellow Essen resident RWE’s spinoff plans may work for Thyssen too.
Deutsche Bank risks its own “keep dancing” moment 28 Jan 2016 Despite a rotten quarter in investment banking, Germany’s biggest lender will keep adding risk and rainmakers. CEO John Cryan is entitled to see fixed-income issues as cyclical. But in time his stance may echo ex-Citi boss Chuck Prince’s 2007 pledge to stay at the subprime ball.
Time for BASF to press the self-help button 27 Jan 2016 The low oil price is hitting the German chemicals giant harder than previously expected, with writedowns denting 2015 operating profit by 18 pct. Investors won’t be best pleased. But BASF has a big oil and gas investment budget it can hack back before considering deeper cuts.
Siemens’ strong earnings have many moving parts 26 Jan 2016 The German engineer raised its expected earnings per share for 2016 by 2.5 percent. Cost-cutting seems to be taking effect. But earnings per share, which hinge on many inputs, make for a slippery target, especially as Siemens is sticking to its former revenue and margin guidance.
Siemens digital deal sets tone for M&A 2.0 25 Jan 2016 The German engineering giant has a history of value-destroying acquisitions. Yet buying U.S. engineering software maker CD-adapco may buck that unhappy trend. The capital goods market faces a digital revolution. More importantly, it looks like Siemens isn’t massively overpaying.
Germany’s star economist leaves mixed legacy 22 Jan 2016 Hans-Werner Sinn, the most publicly visible German economist of his time, is retiring. A talent to simplify complex issues went overboard long before the euro crisis. His career shows the importance of economists communicating beyond campus – and the pitfalls.
Germany’s listed landlords better off detached 21 Jan 2016 Deutsche Wohnen investors have until Jan. 26 to decide on rival Vonovia’s 14 bln euro hostile bid. Yet synergies are disputed, and a 14 pct fall in the bidder’s shares makes a stingy offer even less compelling. Wohnen can grow on its own, and its shareholders should say No.
Deutsche Bank may need more kitchen sinks to throw 20 Jan 2016 Germany’s largest lender has unveiled a second profit warning in as many quarters. It’s taking legal and restructuring charges, but is also suffering from a drop in revenue. Boss John Cryan cites misfiring investment banking for the latter. But all three factors may persist.
VW plea from Brussels confuses cause and effect 20 Jan 2016 EU officials are urging the German carmaker to compensate Europeans like U.S drivers. VW’s two-tier scandal response, however, simply reflects the weaker emissions regime put in place by diesel-loving policymakers. Stricter standards will warrant tougher enforcement – next time.
Germany is more than a one-woman show 18 Jan 2016 Chancellor Angela Merkel is under pressure. But how would Germany’s role in Europe change without her? Probably not much. While a new leader might need time to build political capital, projects like the euro and keeping the EU together would still be in Germany’s interest.
Adidas CEO change starts a sprint amid a marathon 18 Jan 2016 The hiring of Kasper Rorsted from Henkel to replace Herbert Hainer set the German sportswear company’s stock dashing upward. To catch rivals Nike and Under Armour, Adidas will have to up its performance. Expectations look high, though, for a long race with many hurdles.
Das wasted Kapital: a tale of German inefficiency 14 Jan 2016 German consumers are among Europe’s most avid savers, but earn abysmally low returns on their investments. Poor portfolio choices, driven by excessive risk aversion, have dented real household wealth by 15 pct in a decade. Resolving the savings paradox could spur German growth.
Volkswagen’s privacy defense daft but justified 12 Jan 2016 Withholding emails from U.S. emissions-scandal investigators is a losing tactic, legally and in the court of American public opinion. Yet it’s allowed under German law. And Uncle Sam shares blame for the gridlock, having treated foreign firms more harshly than homegrown peers.