Memo to UK’s new air strategists: let numbers talk 5 Sep 2012 After years of make-do-and-mend, the UK is once again arguing about London’s airport capacity, and possible expansion at Heathrow. Most people seem most keen to rubbish plans they dislike. The right approach is more positive. Analyse all ideas robustly: then make a decision.
BP’s path to Macondo settlement just got harder 5 Sep 2012 U.S. lawyers say they’ve got emails showing gross negligence in the 2010 oil spill disaster. There’s still scope to settle before a trial, but the aggressive tack complicates BP’s effort to get a favourable deal. The market reaction - wiping $5 bln off BP’s value - looks right.
Financial regulation heading in wrong direction 3 Sep 2012 The Bank of England’s Andy Haldane points out that more and more detailed regulation hasn’t made the financial system safer. But reversing direction is hard, and might not be enough. What is really necessary is a simple and shared vision for financiers and regulators.
UK needs austerity plus vision, not a Heathrow bodge 3 Sep 2012 The critics are right. The British government needs more than austerity. Growth may benefit a bit from a smoother planning regime, a small business bank, and fresh infrastructure backing. But broader vision is required. A Heathrow extension as a growth fix isn’t that.
Barclays’ new CEO will need to work doubly hard 30 Aug 2012 Retail chief Antony Jenkins is a welcome antidote to the UK bank’s gung-ho ex-boss Bob Diamond. But he still has to steer its powerful investment bank onto a more sustainable path. And it would have been easier for an outsider to make a break with Barclays’ past misdemeanours.
Fraud probe could turn Qatar cold on Barclays 30 Aug 2012 The Gulf state’s sovereign fund might seek to distance itself from Barclays after the UK’s Serious Fraud Office launched an investigation into the bank’s links with its major shareholder. Qatar may not like the reputational damage. That could mean unwinding a 5 bln pound bet.
Glenstrata deal gap is harder than ever to bridge 29 Aug 2012 Xstrata investors are digging in. Yet Glencore has less scope to up its offer after the miners’ interims. Without the retention bonus row, the obstacles may not have got so big. Xstrata’s hold-outs need to believe in its standalone value: that’s probably all they’ll be left with.
UK needs a permanent, property-based wealth tax 29 Aug 2012 Nick Clegg, the UK’s deputy prime minister, has suggested a temporary emergency tax on the wealthy. That’s better than taxing income excessively, but a one-off hit is not what’s needed. Property taxes should be brought up-to-date. On this topic, the government is lagging.
News Corp’s UK tabloid exposes model weakness 24 Aug 2012 Britain’s best-selling newspaper has printed shots of Prince Harry in the buff. It also concedes that most readers will have seen the pictures on the internet, highlighting the main commercial problem facing the soon-to-be demerged News Corp newspapers. The Web.
Anglo finds satisfactory end to Chilean quarrel 23 Aug 2012 The London-listed miner has buried the hatchet with Codelco, selling Chile’s copper producer 25 pct of a disputed mine for $1.9 bln. Anglo American’s other problems will be harder to solve, but here CEO Cynthia Carroll can reasonably claim she’s protected shareholder value.
Spending still needed despite mine capex cull 22 Aug 2012 BHP Billiton’s decision to shelve a $20 bln Australian copper and uranium dig shows reassuring discipline. As lower returns challenge more marginal projects, investors may ask miners to shovel even more cash in their direction. The biggest miners can afford to think longer term.
Glencore’s stiffening resolve leaves bid on skids 21 Aug 2012 Resistance to improving the terms of the $30 bln merger with Xstrata appears to be hardening at Glencore HQ. A last-minute sweetener can’t be ruled out, but a decent half-year performance by the commodity trader makes it less likely.
Soros backing could lift Manchester United 21 Aug 2012 The soccer club’s U.S. float was panned for leaving the Glazer family firmly in control - and for missing their lofty goals on value. But George Soros’s emergence as a major shareholder could lift sentiment. Despite his $20 bln fortune, Soros is not a typical trophy investor.
Lawsky affair rekindles U.S. regulatory arb risk 20 Aug 2012 The crusading NY watchdog single-handedly extracted $340 mln from StanChart. That’s good politics, but goes against a pact between the feds and the state not to work at cross purposes. The danger is financial firms circumvent regulations by exploiting rivalry among overseers.
UK shows white collar crime not so easily forgotten 20 Aug 2012 After 22 years, Asil Nadir has been found guilty of theft in the collapse of Polly Peck, a one-time London stock market darling he led. Those frustrated by the paucity of financial crisis convictions must be heartened to see the long arm of the law retaining muscle decades later.
US derivatives leader makes timely push on Europe 20 Aug 2012 CME plans a London derivatives exchange. By starting in currencies it avoids tackling rivals NYSE and Deutsche Boerse head-on. The timing is also canny. Private trading is migrating to bourses and moving earlier might have made it easier for NYSE-DB’s merger to win approval.
Assange asylum is a political freebie for Ecuador 17 Aug 2012 The country’s leftist government has annoyed the U.S. by granting asylum to the WikiLeaks founder. Given that its oil exports, mineral exploration and loan funding are increasingly dominated by China, which suggested Assange for the 2010 Nobel, it’s also not totally surprising.
Resolution shouldn’t give critics any more ammo 16 Aug 2012 Clive Cowdery’s insurance conglomerate is locked into paying fees to its M&A advisory arm despite ending its acquisition strategy. The fees are relatively small and cover expenses as well as salaries. But Resolution’s execs must be seen not to profit as the arrangement unwinds.
StanChart has some explaining to do on settlement 15 Aug 2012 Why did the bank pay a U.S. regulator $340 mln after loudly claiming it had made just $14 mln of suspect trades? Relieved shareholders can call it the cost of a quiet life, but that doesn’t justify paying up. For credibility’s sake, StanChart should show its working.
BBC’s Mark Thompson is odd choice as NY Times CEO 15 Aug 2012 The outgoing head of the UK’s largely state-funded broadcaster has run an outfit where revenue is mostly guaranteed - a far cry from the free-market challenges faced by the Times. But a taste for a fight with Rupert Murdoch may explain Thompson’s appeal to the Times’s owners.