Higher dividend is easyJet’s next destination 3 Sep 2015 The British no-frills carrier has upped its 2015 guidance significantly, sending shares up 6 pct. With earnings per share poised to rise by a fifth, it can easily afford topping up shareholder payouts. But future growth plans limit the scope of another 2013-like special dividend.
Lower oil will unclog more pipeline deals 28 Aug 2015 For oil majors desperate to protect their dividend, selling non-core infrastructure not linked to oil prices is a no-brainer. There is plenty of interest from investors, as Total’s pipeline sale in the North Sea shows. That should help overcome thorny deal issues.
Shell-BG merger still works with cheap oil 27 Aug 2015 The tumbling oil price has raised fears that Shell shareholders might balk at the $70 billion the Anglo-Dutch energy group agreed to pay for smaller rival BG. While the premium may now look bigger, so should the cost savings, even now that black gold has lost its shine.
Gamblers’ $8 bln tie-up raises odds for rivals 26 Aug 2015 Paddy Power and Betfair have agreed to a possible all-share merger. The two look evenly balanced: the Irish group is big in traditional betting, its UK peer in online exchanges. Greater scale should offer some defence against industry consolidation and rising taxes.
Miners’ dividends are a fragile commodity 25 Aug 2015 BHP Billiton has raised its payout even as prices fall. That helps win investor support for its aggressive iron ore production strategy. Yet across the sector, funding generous payouts will become tough unless supply and demand rebalance. There is little to suggest they will.
Zurich buys protection with 5.6 bln pound RSA bid 25 Aug 2015 The Swiss insurer has made a 550 pence-per-share indicative offer for its UK peer. At that price, it could achieve a 10 pct return with fairly undemanding cost savings. Twitchy markets may help Zurich clinch a deal that both sides’ shareholders can argue is a fair result.
Glaxo sale comes with cheeky earnings side effect 21 Aug 2015 UK pharmaceutical firm GlaxoSmithKline is selling a multiple sclerosis drug to Novartis for up to $1 bln. It’s a logical move and Glaxo gets a good price. The quirk: it will include proceeds from the one-off as part of underlying revenue. Pharma investors need to watch their core.
Markets fear central bankers are only human 20 Aug 2015 Unexpected events like China’s devaluation and commodity price drops are having a surprisingly big effect on long-range market inflation expectations. Previously, investors tended to look past such phenomena. But trust in policymakers’ ability to offset shocks is at a low ebb.
Glencore tripped up by faith in rational markets 19 Aug 2015 The commodity trader’s earnings have disappointed as copper and coal have tumbled. Anticipating the market is getting harder because both rivals’ behaviour and Chinese demand for raw materials are even more unpredictable. Glencore is thus focusing on what it can control: cash.
Sizing up FX rigging damage is imperfect science 18 Aug 2015 There are ways of guessing how much currency rate manipulation cost some investors on some days. Settlements by banks in the U.S. have set the ball rolling. But these are just estimates, and sometimes there may have been gains. Nuisance value may matter more than client losses.
Corbyn’s hard-left ideas merit scrutiny, not alarm 14 Aug 2015 The frontrunner to lead the UK’s Labour Party looks at first like a hopeless throwback. May’s UK election implies he won’t be prime minister. But some of his themes – focused QE, or selective public ownership of natural monopolies – are worth debating, and not just in Britain.
Aegon gives peek at insurers’ new capital gremlins 13 Aug 2015 The Dutch insurer’s shares slumped after it adjusted down its estimated capital ratio under new Solvency II rules. Before the new metrics go live next year, more insurers could unearth nasty surprises. Even after, capital positions are set to be more volatile.
The Economist shows faith in own self-worth 12 Aug 2015 The Agnelli family is raising its stake in the financial weekly’s parent to 43 pct, valuing it at 957 mln pounds. The Economist itself will also buy back stock at a similar valuation. While not cheap, the result is a tidier balance sheet, an acquisition currency and more freedom.
Skills deficit may hamper UK jobs growth 12 Aug 2015 Britain’s labour market seems to be doing pretty well. Unemployment has fallen and wages are rising at a decent clip. But scratch the surface and there’s a nascent issue. New data shows a large number of vacancies, especially in sectors that require more technical proficiency.
UK death-insurance merger makes future less morbid 11 Aug 2015 Partnership and Just Retirement are combining in an all-share deal. The business of offering annuities to high-risk customers got smacked by regulatory shifts in 2014, and both trade below 2013 listing prices. Cost savings make things better, but the sector is still in flux.
BoE manages to be transparent yet unpredictable 6 Aug 2015 The UK central bank has for the first time simultaneously released its policy decision, how rate-setters voted, and its inflation report. It’s transparent. But investor shock that only one person voted to hike rates suggests greater openness doesn’t mean greater predictability.
Zurich can justify a swoop on RSA 6 Aug 2015 The Swiss insurer released disappointing results but thinks its UK peer remains a good fit. Zurich’s hurdle rate for investment is around 10 percent. Offering 600p a share for RSA, a 36 pct premium, should allow that without synergy assumptions being too ambitious.
StanChart CEO’s bad numbers don’t disappoint 5 Aug 2015 New boss Bill Winters used first-half results to raise the emerging market bank’s bad debt provisions and halve its dividend. A 5 pct return on equity shows the scale of the challenge. After two months in charge, the CEO has quickly got to grips with StanChart’s biggest problems.
Best chapter in Pearson breakup story yet to come 5 Aug 2015 The media group can soon sell its 47 pct stake in publisher Penguin Random House to co-owner Bertelsmann. Including future synergies, the stake could fetch $2.7 billion, twice what Pearson got for the FT. Since the venture could get more valuable still, waiting looks better.
Shire M&A machine stumbles on $30 bln Baxalta bid 4 Aug 2015 The onetime Irish target for AbbVie is planning a mega-deal of its own. Unlike the previous combination, Shire’s Baxalta purchase has industrial logic as well as tax benefits. Shareholders, though, might have preferred being bought out to assuming all the risks of a takeover.