Euro zone stuck between health and healing crisis 14 Nov 2014 The dreary 0.2 pct quarterly increase in GDP is a reminder of the region’s inability to shake off its long-standing malaise. But the news is nowhere near bad enough to spur any of the radical policy changes which might make a substantial difference.
BNP Paribas could make an MPS merger work 11 Nov 2014 After a tough year, doubling up in Italy to buy ailing Monte dei Paschi would be a bold move for France’s biggest bank. But synergies could exceed 3 bln euros, while political obstacles and asset quality fears have eased. If BNP was tempted, it could drive a hard bargain.
Endesa investment case warms up 5 Nov 2014 Up to 22 pct of the Spanish utility is being sold by Italy’s Enel. Disposals have left Endesa a pure-play Iberian utility with stable cashflow. A good dividend should help buck weak demand for Spanish issuance. And lowly geared Endesa could afford to be even more generous.
China affair may test Italy’s protectionist reflex 5 Nov 2014 Chinese state and private firms are piling into Italy. The country is a tough market for outsiders to crack, but offers value and technology. Italy is also desperate for cash. A political backlash could sour this love-in, but China has so far been a courteous suitor.
MPS shareholders presented with unappealing choice 3 Nov 2014 The Italian bank may get away with a 2.1 bln euro rights issue. Monte dei Paschi’s investors know the money is needed to satisfy regulators, and cash now prevents severe dilution later. But any hope that a merger will bring a quick exit looks optimistic.
Ferrari spinoff looks great but lacks oomph 29 Oct 2014 The hottest name in sports cars is joining the spinoff bandwagon. Fiat Chrysler will sell 10 pct of Ferrari and hand the rest to investors. Fiat shares zoomed up. Yet the split is largely symbolic. Ferrari needs to stay linked to Fiat, and the cash proceeds will be limited.
Italy’s bank debacle could be useful for Renzi 27 Oct 2014 Italian banks’ poor showing in Europe’s stress test has sparked protest from the Bank of Italy. But for reforming Prime Minister Matteo Renzi, shocks to the system aren’t unhelpful. He can use the mess to reform ailing lenders so they can support the shaky economy.
World’s oldest bank faces radical treatment 26 Oct 2014 Monte dei Paschi will struggle to plug its 2 bln euro stress-test hole and stay independent. Investors in the last cash call got burned. The clean solution would be a takeover. But with buyers in short supply, a breakup may be required. It’s a big setback for the Bank of Italy.
Gucci makeover still a work in progress 24 Oct 2014 The flagship brand of French luxury and lifestyle group Kering posted disappointing sales in the last quarter, sending the shares down. Gucci is struggling with an image problem. At least it can point to early signs that its new strategy is bearing fruit.
Monte dei Paschi in EU bank stress test purgatory 21 Oct 2014 The Italian bank’s shares have tanked on fears it will fail this week’s EU stress tests, even though it has a sizeable buffer against losses. Second-guessing the upcoming results is a difficult task. But investors may also wonder where the new capital could come from.
Hugo Dixon: Markets right to worry about euro zone 20 Oct 2014 The epicentre of last week’s fright was the 18-nation currency bloc, whose three big economies – Germany, France and Italy – are in their own ways stuck. There is a grand bargain sketched out by Mario Draghi that might shift the malaise. But it won’t materialise soon, if at all.
Italy offers a "just enough" budget for Europe 16 Oct 2014 Brussels hawks will be grudging about Matteo Renzi’s first budget. The prime minister’s plan flouts Italy’s fiscal targets and barely stays within the deficit limit. But times are tough. Renzi needs help with reforms and Italy needs stimulus. The budget just about passes muster.
European "lowflation" stays on its dire path 14 Oct 2014 Even the UK is succumbing, although its 1.2 percent rate remains high by European standards. Trends in France, Spain and Italy are all weak. With prices almost flat, wage rises will be poor and government finances will stay strained. A BoE rise may not come until 2016.
Fiat Chrysler spins onto NYSE with hefty price-tag 13 Oct 2014 Boss Sergio Marchionne wants to sell 60 pct more cars by 2018, costing perhaps $10 bln a year. That’s a big ambition for a debt-laden firm with poor margins. Yet the Italo-American carmaker, now trading in New York, sports a similar multiple to more profitable rivals Ford and GM.
Luxottica needs a soap-opera discount 13 Oct 2014 The maker of Ray-Ban glasses has lost its CEO, the second in as many months. The impression of tensions with the family of 61 pct owner Leonardo Del Vecchio will deter candidates. And the premium rating will be hard to regain until the governance befits a publicly traded company.
Hugo Dixon: Italy has no good Plan B 13 Oct 2014 Matteo Renzi’s Plan A is to push through domestic reforms, hope the ECB manages to get inflation ticking up, and keep his fingers crossed that the economy stops shrinking. But if this fails, a mega wealth tax, debt restructuring and/or exit from the euro beckons.
Scrapper Renzi lives up to his reputation at last 30 Sep 2014 Italian prime minister and “scrapper” of Roman politics Matteo Renzi has angered his own camp with his labour reform plans. If his Jobs Act passes, it will boost growth and help the ECB maintain loose monetary policy in the meantime. But many tough fights lie ahead.
Time for Telecom Italia to set its own agenda 25 Sep 2014 The Italian telco is indebted and adrift, having failed to clinch GVT in Brazil. No wonder predators are circling. Reported bid interest from industry veteran Sol Trujillo may not go anywhere – but it underscores the need for TI to produce a clear plan for capital and strategy.
Club Med auction returns to work refreshed 12 Sep 2014 Legal action delayed a low-ball MBO by China’s Fosun last year. A counterbid by financier Andrea Bonomi has now forced Fosun to hike its offer to $1.1 bln. Shareholders in the French holiday group have been vindicated for refusing to throw in the towel.
Ferrari spat raises expectations on Marchionne 10 Sep 2014 Boss Luca Cordero di Montezemolo is leaving Ferrari after two decades. A tiff with Sergio Marchionne, CEO of parent Fiat, made his position untenable. Fiat’s stock rise puts a lot of faith in Marchionne’s ability to extract greater value from Ferrari – possibly from a sale.