Euro zone rediscovers sloppy fiscal policy 15 Oct 2015 Deficits are creeping up in Spain, Italy and even growth star Ireland. Reasons include easy money and pre-election spending. As yet, the gaps aren’t dangerously big. What’s more worrying is poor spending decisions, slowing reforms and fiscal dissonance between member states.
Italian post IPO should be sealed with a discount 14 Oct 2015 Poste Italiane is Italy’s biggest privatisation in a decade, at up to 10 bln euros. Despite its brand and network, the postal service loses money and the bank is laden with Italian government debt. A more modest price would reflect that the turnaround cheque is still in the mail.
Renzi shrinks Italy’s political risk premium 14 Oct 2015 Prime Minister Matteo Renzi achieved an important step in his plan to reform Italy’s upper house. That should mean more stable governments. Italy’s bond yields are already close to pre-crisis levels. Narrowing the discount to France or Germany requires further economic reform.
Sergio Marchionne revs pre-IPO Ferrari to the max 12 Oct 2015 The Fiat Chrysler boss has cranked up margins at the sports car firm, which he chairs. That could help justify a near $10 bln market cap and a bumper multiple. The need to keep the investment tank full and get the top line growing, though, may mean margins and the valuation fade.
Hugo Dixon: European populism can be tamed 12 Oct 2015 Demagogic movements of the left and right have gained traction in most European Union countries in recent years. A mixture of competence, fairness and leadership can combat them. There are signs that the fightback is succeeding.
Bollore’s TI stake hike hints at true intentions 7 Oct 2015 The French corporate raider has increased his stake in the Italian telco to 20 pct. His recent purchases could be a defensive move to avoid dilution, or to profit from cross-border consolidation. But it could also be part of a more activist plan to shake up Italian pay-TV.
Nomura/MPS achieve painful closure on swaps mess 24 Sep 2015 The Japanese bank has resolved litigation with Monte dei Paschi by releasing it from structured transactions. The terms mean Nomura forgoes 440 mln euros - twice as much as Deutsche Bank, which settled over similar trades in 2013. But both banks also gain from ending the saga.
Debt markets mistake Spain for Italy 18 Sep 2015 Last year the Iberian country was being compared by investors to safe Germany. Now foggy politics mean investors want a higher return than on Italian debt. The political premium looks temporary: Spain is faster-growing and no riskier than its Mediterranean cousin.
Renzi turns reform steamroller to Brussels 8 Sep 2015 Italy’s prime minister, dubbed “the scrapper”, is promising tax cuts. It looks like a challenge to Europe’s fiscal rules. Yet lower corporation taxes are needed, and the ECB will probably keep markets calm. The flipside is that Matteo Renzi’s plan requires that mooted spending cuts actually happen.
Italy rushes through one last flawed bank bailout 7 Sep 2015 Europe is weeks away from a new regime that makes creditors and depositors pay for bank rescues. Yet Rome is still asking Italian banks to pony up 1.4 billion euros to save three small lenders. Bail-ins are unpredictable, but the proposed solution risks leaving the system weaker.
Rob Cox: Double-duty CEOs are a worrisome trend 27 Aug 2015 Fiat boss Sergio Marchionne may don another hat to run Ferrari. Like Jack Dorsey and Elon Musk, however, he’s only human. Investors in public companies, especially young or challenged ones, require full attention from a leader. That’s all but impossible when he’s running two.
MPS ploughs lonely furrow to profitability 7 Aug 2015 Shares in the Sienese bank climbed due to better-than-expected capital and falling bad loans. Yet MPS is still far from earning its cost of equity, and a high stock of bad loans will hold it back in the M&A boom expected in Italian banking. The shares look fully valued.
Li Ka-shing can pull more levers at CK Hutchison 7 Aug 2015 The Hong Kong tycoon fixed the last big problem in his telecoms empire with a $24 bln tie-up in Italy. With that transaction done, future dealmaking is likely to focus on other parts of his conglomerate. Reviving the listing of retail arm AS Watson is one way to release value.
An oligarch and a tycoon clean up Italian mobile 6 Aug 2015 That’s not the setup of a bad joke but a fair summation of a merger that may solve Italy’s ultra-competitive phone sector. Getting Vimpelcom’s Mikhail Fridman and Hutchison Whampoa’s Li Ka-shing to surrender control was a feat in itself. The result looks surprisingly clean.
UniCredit view on capital is too glass half-full 5 Aug 2015 Shares in Italy’s biggest bank jumped after it reported higher capital ratios. A recovering Italian economy and benign markets mean UniCredit may avoid a cash call, yet it lags on capital and profit. CEO Federico Ghizzoni needs to do more to shake off the group’s discount.
Mediobanca starts to resemble normal bank 5 Aug 2015 The Italian lender reported rising fourth-quarter net profit and loan growth. CEO Alberto Nagel’s bid to turn Italy’s old corporate powerbroker into a profitable lender is paying off. A sensible acquisition and the Italian government’s reform drive are easing the transition.
Agnellis rebalance portfolio – at a price 3 Aug 2015 The Italian family’s Exor vehicle has won the fight for PartnerRe with a $6.9 bln bid after the reinsurer’s board finally switched sides. Three months of bolshie resistance paid off, and Exor boss John Elkann is paying handsomely to diversify away from Fiat Chrysler Automobiles.
Italy’s corporate grandees ditch concrete boots 30 Jul 2015 HeidelbergCement’s acquisition of cement maker Italcementi marks the end of an era in Italian corporate finance. The Pesenti family’s empire was a part of the salotto buono of cross-shareholdings created by Mediobanca’s Enrico Cuccia. Its sale shows Italy is open, and healthier.
Ferrari IPO customized with Fiat governance part 23 Jul 2015 The supercar maker is offering an extra vote for shares held for three years – part of its parent’s spec, too. The loyalty shares help entrenched owners keep a grip. What might make investors skittish, though, is Ferrari trying to live up to a touted 10 bln euro valuation.
Agnellis nudging PartnerRe out of rival’s reach 20 Jul 2015 Exor, the Italian family’s investment vehicle, has a better offer for the Bermudan reinsurer than Axis. Common shareholders would get more money, in cash, and preferred stockholders extra assurances. A last-minute counter by Axis would hurt its and PartnerRe’s investors.