Boris Johnson intervention reduces Brexit chances 4 Dec 2012 London’s mayor says he will campaign to keep Britain in the EU provided it can negotiate a pared-down relationship based on the single market. Although Johnson is overestimating the UK’s negotiating strength, he is one of the few people who could sell Europe to sceptical Britons.
Logic won’t topple London from euro perch 3 Dec 2012 The French central bank governor wants euro trading to be done in the euro zone, not in offshore London. The argument is sound. But Christian Noyer should know that finance doesn’t work that way. After all, he is pushing Paris as an offshore currency market - and good luck to him.
UK bank steroids are working for the wrong reason 3 Dec 2012 Net lending by domestic banks rose only a bit in Q3. That’s a disappointment given the Bank of England is offering super-cheap funding to boost lending to the real economy. But the central bank support is probably having a benign side-effect - the softening of painful deleveraging.
UK bank capital probe puts heat on RBS 3 Dec 2012 The Bank of England has publicly questioned whether domestic lenders are adequately provisioned against future losses. Making definitive judgments about who this affects isn’t easy. But RBS’s 66 bln pound commercial property book is one place to start asking questions.
CWC extracts royal premium from Batelco 3 Dec 2012 Bahrain’s top telco will pay $1 bln, or roughly one third more than the market expected, for the UK firm’s Monaco and Island unit. The deal will transform both buyer and seller but the rich price stretches the business logic for Batelco’s big international leap.
UK could raid the rich to boost a poor economy 30 Nov 2012 George Osborne faces a big test in next week’s interim budget. The Chancellor must stimulate growth while tightening fiscally. His wiggle room is small. But he could serve both aims by grabbing back perks from the rich to fund tax cuts for the poor and a bit of capital spending.
Glencore-Xstrata re-rating to start in boardroom 30 Nov 2012 With the Xstrata takeover done, the market has work to do to get to grips with “Glenstrata”. Valuing the miner-trader is tricky. The shares look cheap, but a big integration looms. A re-rating depends on the trading business proving itself and the board getting governance right.
Aston Martin’s Casino Royale is a long way off 29 Nov 2012 Life’s hard for niche automakers, even if James Bond’s a fan. Supercar demand has wilted. Starved of funds, vehicles can grow as stale as Brosnan-era 007. A potential $400 mln injection from a new investor would boost Aston Martin. Just don’t expect decent returns any time soon.
Murdochs will sigh with relief at UK press probe 29 Nov 2012 The phone-hacking inquiry has rejected the idea that News Corp nobbled the government to back its BSkyB bid. Moreover, David Cameron has rejected the inquiry’s central proposal for state underpinning of press self-regulation. For the press barony, it could have been a lot worse.
Unnamed UK banks shamed into capital action 29 Nov 2012 In June, the Swiss central bank publicly told Credit Suisse it was undercapitalised. The ploy worked. The Bank of England now says UK banks need capital but has stopped short of naming names. The doubts expressed by the BoE on risk-weighting, however, are reassuring.
Siemens outsmarts market with $2.8 bln rail deal 29 Nov 2012 The German group will buy the rail arm of Invensys for a hefty $2.8 bln - surprising analysts and investors who had soured on the UK group and its pension deficit. For Siemens there’s strategic logic and synergies. For pension trustees, relief. For the Invensys chairman: déjà vu.
Carney at BoE changes the game for UK banks 28 Nov 2012 The new Bank of England governor is known as a strong supporter of bail-ins and Basel III rules. But his views on Vickers-style structural reforms are not so hawkish. And as the euro zone plans its banking union, his international clout and contacts will benefit the City.
BoE likely to see three changes in monetary policy 28 Nov 2012 New governor Mark Carney prefers to give clear guidance on interest rate prospects - in contrast to Mervyn King’s studied ambiguity. He’s also likely to lead the monetary policy committee more assertively. And his appetite for money printing seems lower than his predecessor’s.
Carney raises hopes for impossible BoE job 26 Nov 2012 The Bank of Canada chief is the surprise choice to run the UK central bank. He brings deep knowledge of financial regulation and an outside perspective. But that may still not be enough to meet the challenge of preserving growth, protecting banks and maintaining BoE independence.
UK should resist yet another bank levy hike 26 Nov 2012 The coalition’s annual tax on lenders’ balance sheets started life as a smart way to raise cash while geeing banks to slash risky short-term funding. But bankers now expect the rate to be raised for the third time. That undermines incentives. Better to focus on stimulating lending.
Barclays’ investment bank is too good to lose 26 Nov 2012 Antony Jenkins is feeling the heat from investors. The Barclays CEO is under pressure to cast his investment bankers free and pursue the high street’s more staid returns. But with investment banking making up three-fifths of group revenue, Jenkins can’t afford to set it loose.
Company face-time ban adds to equities grief 23 Nov 2012 The UK regulator has decided that arranging access to company management doesn’t constitute equity research. That’s more than just semantics. It rightly removes a bad incentive for fund managers to shunt trades to certain brokers. Yet another headache for the equities business.
HP’s accounts bombshell: a guide for the perplexed 22 Nov 2012 The U.S. tech group says it was duped into overpaying for Autonomy. The $9 bln row centres on three allegations relating to how the UK group presented its sales. Unpick them, and HP has work to do to show Autonomy went beyond being aggressive in its accounting.
RBS’s Citizens unit all dressed up, nowhere to go 21 Nov 2012 The U.S. bank, with its $120 bln balance sheet, is a prize asset. That should mean a bidding war if UK taxpayer-owned RBS sells it. But the need to pay cash, keep their own investors happy and satisfy watchdogs may give buyers pause. Citizens could remain foreign for a while.
HP-Autonomy row suggests bankers did not compute 20 Nov 2012 There’s plenty of blame to go around in the explosive bust-up between the U.S. tech giant and the British data-sifter. But it raises tough questions for the M&A advisers who shepherded the $12 bln deal, chiefly Frank Quattrone’s Qatalyst, Barclays and Perella Weinberg.