Temasek’s $500 mln investment times Markit just so 21 May 2013 Financial “Big Data” is a running theme and the Singapore investor can open doors across Asia for Markit any time. But with Bloomberg on the defensive, it’s a good moment to suggest there’s potential for another competitor – perhaps, before long, another publicly traded one.
Vodafone’s drab results are a sideshow 21 May 2013 Analysts expected little from the mobile giant’s results. They got it. EBITDA is under pressure, an annual dividend increase is gone, and Southern Europe is hurting badly. The main driver of the share price remains hopes of action at U.S. joint venture Verizon Wireless.
"Balance of shame" holds key to ENRC fate 20 May 2013 An independent board committee has rightly rejected a lowball bid for the miner from its three founding oligarchs and the Kazakh government. Whether a higher price can be extracted depends less on ENRC’s prospects than on how much the bidders are willing to pay to save face.
FirstGroup cash call shows deleveraging imperative 20 May 2013 The rail and bus operator is raising $1 bln to stave off a ratings downgrade. The chairman is leaving. Debt may be cheap, but too much is still a constraint. With equity markets rising, this won’t be the last over-geared firm to seek to restructure its balance sheet.
Hugo Dixon: UK should get on front foot with City 20 May 2013 Britain has been playing a defensive game in response to the barrage of misguided financial rules from Brussels. It now needs to sell the City as part of the solution to Europe’s problems. The opportunity is huge. It could even help keep Britain in the EU.
Widened EU bonus cap looks more like a net 17 May 2013 A new proposal not only limits bonuses for banks’ biggest risk takers, but for anyone paid more than 500,000 euros. The good intentions and the prospect of a more level European playing field are appealing, but reduced cost flexibility would make banks more dangerous to society.
Morrisons’ click with Ocado makes M&A less likely 17 May 2013 The UK supermarket has gone for a joint venture with online Ocado rather than a full-blown bid. It will help Morrisons, a web laggard, catch up with rivals. A short squeeze explains most of the Ocado share surge, but the smaller firm has won surprisingly advantageous terms.
3i still to show it passes all private-equity tests 16 May 2013 Simon Borrows has had a cracking first year as 3i CEO, producing a 111 pct total return for shareholders by refocusing, cost-cutting and selling assets well. The group still needs to show it can find sound new deals. And eventually 3i must try to raise another buyout fund.
Thomas Cook turnaround can travel on in style 16 May 2013 Shares of the UK holiday firm are up tenfold since CEO Harriet Green joined last July. Its 1.6 bln stg refinancing and rights issue failed to knock the stock partly because it shows Thomas Cook has found new strength. Operational success suggests the recovery still has legs.
A fresh bid for Betfair? Don’t bet on it 15 May 2013 The gaming group’s shares are still up smartly, even though buyout talks failed. That partly reflects growing belief in Betfair’s turnaround. But any lingering bid speculation is almost certainly misplaced. Private equity is typically loath to bypass management and go hostile.
King leaves UK close to top of weak EU league 15 May 2013 The outgoing governor of the Bank of England was asked to compare the UK to a football team: relegation or one of Europe’s elite? Mervyn King dodged the question, but modest recovery is enough to make the UK a strong contender in a poor European league. King can claim some credit.
Oil price collusion would be a Libor-scale scandal 14 May 2013 EU authorities are probing whether traders in oil majors conspired to rig published energy prices. Oil benchmarks are supposedly harder to manipulate than bank rates, so this could be a big deal. Even if no collusion is found, it makes a review of arcane price-setting mechanisms more urgent.
Wave of liquidity engulfs Severn Trent water 14 May 2013 For years bid talk has surrounded the UK’s last listed water utilities. Severn Trent is now in play. A bid could top $14 bln with debt, at 35 pct above the group’s regulated value. That would be rich. Regulation may get tighter. But debt is cheap and funds are eager for yield.
Investors need to be alive to UK’s EU-exit risk 13 May 2013 Policy splits in a weak London government raise the chance that Britain will leave the EU. It’s still only a tail risk, but investors should be wary. Hard-to-model ructions could start any time. Fortunately, adverse market reactions could bring UK politicians to their senses.
Uncle Sam’s austerity-by-gridlock beats Europe 13 May 2013 While Spain, the UK and other nations sold belt-tightening to voters, the U.S. Congress prevaricated. As a result, automatic spending cuts and tax hikes overcame ideological proclivities and made a $600 bln dent in the deficit, more than in Europe, and with more GDP growth.
Co-op’s least-bad solution lies with its members 13 May 2013 If the undercapitalised bank wasn’t a mutual, it would either raise capital or be carved up by the regulator. But its member-owned status complicates things. That points to a hybrid bond issue to customers. Sadly, the precedent - Spain’s Bankia - isn’t encouraging.
QE-driven markets should fear good news 10 May 2013 Relentless quantitative easing is driving markets to extremes. Central banks want more GDP growth, but they also get high oil prices, hurting consumers. They also get markets which rely on more money - and which could tumble when a stronger economy ends the QE binge.
BT’s free sports gambit tries to out-Sky Sky 10 May 2013 The UK telco is fighting back in broadband by offering free sports programming - just as BSkyB used its pre-eminence in content to expand. Investors initially wiped 1.6 bln stg off the key players. The fear of retaliation is justified: price wars are easier to start than to end.
UK’s sovereign debt precaution at odds with EU 10 May 2013 Britain’s financial watchdog wants lenders to expect big losses if government bonds default. That helps fix a flaw in how capital ratios are calculated. But EU rules mean European debt is excluded. The UK’s decision to push ahead on principle could have perverse consequences.
ENRC board needs to summon its poker skills 9 May 2013 The hapless miner’s independent directors hold a weak hand. But they shouldn’t just fold if ENRC’s dominant shareholders team up to make a low-ball bid for the company. There are risks to losing a deal. Still, there is a floor to a recommendable offer.