New drivers could rev Formula One’s billions 24 Jun 2015 Private equity backer CVC is ready to speed off after a decade of turbocharged returns, while 84-year-old patriarch Bernie Ecclestone may not be doing enough to tune high-tech motor racing’s commercial chassis. Qatari and U.S. owners might just restore full power.
BoE has severe case of central banks’ new dilemma 24 Jun 2015 The UK economy has been growing for a while and wages are finally picking up. But inflation is still pitifully low. And if a rate rise chokes growth, there’s little room for stimulative cuts. It’s a far cry from the clear choices the monetary authorities faced during the crisis.
UK’s imperfect bank pay rules still pack a punch 23 Jun 2015 The Bank of England’s code for investment bank remuneration introduces a sliding scale of deferral and clawback periods that hinge on seniority. Keeping bankers from their winnings for 10 years may still not be enough. But it positions the UK as significantly tougher than peers.
Ladbrokes bets ranch on 3 bln stg Gala finish 23 Jun 2015 A transformative deal will help the UK-listed bookmaker move on from recent troubles. Private equity-owned Gala Coral – corporate home of ex-HBOS chief Andy Hornby – is strong online, and could be an ideal partner. Potential cost cuts improve the odds of a successful deal.
China and UK are worlds apart on public debt 23 Jun 2015 Britain hopes to school China in its contentious public-private finance model. The idea underlines how different the two are. British schemes favoured private investors; in China the state remains in charge. The country has little need for accounting tricks to fund public goods.
Review: The misbehaviour of behavioural economics 19 Jun 2015 Richard Thaler’s “Misbehaving” is the story of a supposedly new approach to people’s economic decision-making. The great insight is that we’re often funny about money. Entertaining anecdotes have helped this specialized field gain attention. The science of nudge has little to offer.
Lloyds CEO ring-fences rivals with reform praise 18 Jun 2015 Antonio Horta-Osorio reckons rules forcing some UK banks to erect a firewall around retail deposits will cut their risk and capital needs. Easy for him to say: the rules won’t hit Lloyds much. But carving big lenders into bite-sized chunks will help tackle complexity discounts.
Britain can be spared new Royal Mail blushes 16 Jun 2015 The UK government was accused of privatising the postal service too cheaply in 2013. Now some may say it has gone the other way. A regulatory review comes just a week after the chancellor ordered the follow-on sale of 750 mln stg of shares. But the conspiracy theory has flaws.
Subject financial fiefs to modern Magna Carta 15 Jun 2015 Companies in the 21st century can learn from 13th century England. Overmighty, overpaid CEOs are the new King Johns. They are held to account, sort of, by the barons of fund management. What’s needed is more respect for finance’s neglected yeomanry: ordinary savers.
Rupert Murdoch’s step back propels dynasty forward 11 Jun 2015 The octogenarian mogul is starting to hand off the Fox media empire to his two sons. Ceding the CEO title to James and making Lachlan an executive chairman should rile non-Murdoch shareholders, who routinely snub the brothers. Chase Carey’s exit crowns the royal succession.
UK strikes right balance on bank/taxpayer pain 11 Jun 2015 Chancellor George Osborne is to reprivatise RBS, but has held back from scrapping a bank levy that is prompting HSBC to consider redomiciling. Both decisions could mean a loss for the taxpayer. But selling RBS makes long-term sense, and there’s still scope to keep HSBC in the UK.
UK market misconduct review no more than a start 10 Jun 2015 A scrutiny of bad behaviour in sectors such as FX addresses individual accountability. But it largely leaves industry and international regulators to come up with concrete proposals on how to reform market practices. National prescriptions have limits when the ills are so global.
UK blithely signs up to Germany’s worst idea 10 Jun 2015 Chancellor George Osborne is to enshrine budget surpluses in state legislation. For a nation with low interest rates and sagging productivity, aping German deficit-phobia is nuts. But plain thinking wins votes because the public has learned to mistrust the wisdom of economists.
Amazingly, Irish homebuilder float looks a hit 9 Jun 2015 Ireland may be the real estate basket case of Europe, but a Dublin-based housebuilder is planning a London float. With most of its competitors bankrupt, strong demographics driving demand and prices in the Irish capital up 22 pct last year, Cairn Homes could be on to a winner.
HSBC continues to wind back the clock 9 Jun 2015 Four years since he started pruning the bank, CEO Stuart Gulliver is cutting risk-weighted assets by a quarter and shedding 50,000 employees. HSBC is returning to its roots as an Asia-focussed trade lender, though investors will have to wait almost three years to feel the effect.
Anshu Jain has an embarrassment of job options 8 Jun 2015 Deutsche Bank’s departing co-CEO can follow so many paths. John Thain downsized. Bob Diamond went to Africa. Huw Jenkins and Alan Schwartz took No. 2 roles elsewhere. John Mack got techie. Jes Staley turned hedgie. And then there’s the Stan O’Neal and Ken Lewis option. Bow out.
Shire can justify $19 bln price tag for Actelion 8 Jun 2015 Dublin-based drugmaker Shire is pondering a $19 bln bid for Swiss peer Actelion, media reports say. The speculation pushed shares in the potential target up 9 pct. Possible cost synergies underpin the implied 21 pct premium, but a higher markup would quickly become a stretch.
Diageo bid genie may be out of the bottle 8 Jun 2015 Investors seem to think the $70 bln drinks giant is vulnerable to a takeover. Diageo shares jumped as much as 8 pct on sketchy reports of a possible approach from 3G Capital, of Heinz and Kraft fame. The UK-based company will need to respond, even if there’s no action this time.
Tesco’s South Korean unit stacks up for a buyout 8 Jun 2015 A disposal for around $6 bln would do much to fix the British grocer’s strained balance sheet. Tesco might not miss the Korean earnings that much either. It’s hard to see trade buyers bidding up the price. But it presents a rare opportunity for private equity in Asia.
Lloyds legal fail takes gloss off 2009 Houdini act 3 Jun 2015 A UK court says the bank can’t redeem 4 bln pounds of CoCo bonds that helped it evade an even bigger crisis-era bailout. Without them, Lloyds would be much further off escaping its state shareholding. But it’s still left paying 200 mln pounds a year for near-useless capital.