Ice cream and vodka could endorse the Oaktree way 31 Jan 2013 The U.S. group has helped pioneer a mixture of private-equity and distressed-debt investing in Europe. Hard cash returns aren’t yet huge but now Oaktree may sell big ice cream and spirits companies, and float an estate agency. That would help affirm the hybrid approach.
A UK triple dip? It’s just one big slowdown 30 Jan 2013 By any realistic definition, the UK isn’t on the edge of its third recession since 2008. GDP has just been stable and low. The stagnation will end eventually, but the structural problems behind it will endure, making the future feel depressingly like - yet more recession.
RBS shares bake in Libor’s known unknowns 29 Jan 2013 The UK bank is off 6 pct amid fears of criminal liability for Libor-fixing. The worst-case scenario - a U.S. indictment - is less likely than prosecution in another jurisdiction or a big fine. But the risk of sizeable fallout from a nasty American surprise justifies the jitters.
China FX swap may blur Bank of England mandate 28 Jan 2013 The central bank is under pressure to set up a swap facility with its Chinese counterpart. Doing so would boost renminbi trading in London. But the BoE’s main concern should be financial stability, not the City’s competitiveness. Confusing the two would be a mistake.
IMF calls for stimulus, no, make that austerity 25 Jan 2013 The world is struggling for growth and the IMF is critical of both the UK’s austerity and Japan’s stimulus. But is the UK, with Europe’s biggest deficit, really austere? And will Japan’s stimulus stimulate? Fiscal and monetary policy cannot solve all the world’s problems.
Ticket to ride up London’s Shard looks toppy 25 Jan 2013 Western Europe’s tallest building will soon offer a near-$40 view. That’s lofty compared to famous vistas in New York, Paris and elsewhere. Adjusted for height, the cost looks even steeper. Blame may lie with the same footloose global capital that has flooded into London property.
Robin Hood tax is proving Cameron wrong on Europe 23 Jan 2013 The financial transaction tax that 11 EU countries want to implement is a case study of David Cameron’s self-defeating approach to Europe. Refusing to engage with its partners means London will bear the consequences of decisions taken without the UK’s participation.
Hugo Dixon: UK faces five years of limbo-land 23 Jan 2013 The promise of referendum on Britain’s membership of the EU by end-2017 means a long period of uncertainty which will be bad for investment. It also heightens the risk of a “Brexit”. There is an opportunity here, however, to press for more competitiveness and less centralisation.
Cameron bets big on confused European ideas 23 Jan 2013 The British prime minister’s vision of a largely economic European Union may play well at home, but is far too simplistic for today’s EU. The UK referendum on membership is a pointless distraction. It will reduce British clout in Europe and discourage business activity.
Europhobic pound faces year of two halves 23 Jan 2013 The pound is sliding. An EU membership referendum is a definite new negative. Trade and public finance data feed the doubts. A poor GDP figure and snow may compound the weakness. But the UK is still expected to outpace the euro zone this year. Decline may turn into opportunity.
Third airport sale may give London a lift 22 Jan 2013 Manchester airport’s owners are paying a surprisingly lofty $2.4 bln for Stansted, Heathrow’s neglected little sister. The bet hinges on utilising spare capacity. If passenger numbers double, as they could, the transformation would also ease London’s air traffic squeeze.
Heathrow needs decisive capacity fix 21 Jan 2013 Snow has exposed the London airport’s lack of slack when problems arise. Passengers’ expectations of a zero-failure service are hard to shift. But if Heathrow can’t build another runway, it needs to be radical. That may mean operating its infrastructure at lower capacity.
Hugo Dixon: When is it OK to avoid tax? 21 Jan 2013 It is clearly wrong to infringe the letter of the law as, for example, many Greeks do. It is also wrong to infringe the spirit of the law. But, as last week’s Goldman Sachs UK bonus row shows, it is also important to take account of the spirit of the times.
Lloyds should change CEO bonus vesting, not size 18 Jan 2013 A storm is brewing over Antonio Horta-Osorio’s bonus. Like banking peers, Lloyds was shamed in 2012 for past mis-selling of mortgage insurance. Yet there was progress in restructuring and the boss deserves any payout due. To become palatable, the award could be deferred not cut.
Size matters for London’s newest M&A boutique 16 Jan 2013 Simon Robey’s decision to link up with fellow M&A hotshot Simon Robertson looks like a merger with synergy aplenty. Both have pedigree and could work well in partnership. But with a crowd of boutiques now fighting for mandates, the firm may need to stay small to retain beauty.
UK inflation shambles can’t be left to fester 16 Jan 2013 The decision to maintain the flawed RPI inflation metric perpetuates an unfair transfer from taxpayers to bondholders and pensioners. Meanwhile, the UK is needlessly creating another inflation measure. The national statistics body has been tarnished. The mess needs cleaning up.
Mervyn King exit may detoxify BoE/bank relations 16 Jan 2013 Lenders and their regulators shouldn’t be best buddies. But banks feel the outgoing governor’s recent vim partly reflects his previous mistakes. Mark Carney offers a clean slate. Given the Bank of England’s new structure could make it harder to manage, that’s just as well.
Anglo opts for high-risk, high-reward in platinum 15 Jan 2013 The embattled miner deserves credit. Its long-awaited platinum restructuring was more aggressive than expected. The task for the incoming CEO is to execute without more of the labour unrest that hit output in 2012. The shares’ subdued response suggests investors are rightly wary.
HMV failure shows limits of consumer sentiment 15 Jan 2013 Amazon and the Internet doomed the British CD and DVD retailer, which has called in administrators. There’s sadness when a brand comes to end after a century, and former customers may have had fond memories of shopping at HMV. But sentiment alone doesn’t become positive cashflow.
UK bank capital reforms are double-edged sword 14 Jan 2013 The BoE’s new Financial Policy Committee could soon be able to make banks hold extra capital for sector-specific risks. That’s an improvement on the current system. But if the FPC isn’t joined up with other national and global agencies, it could create more confusion.