Old rich send message to Zuckerberg’s ilk 30 May 2012 Acquainted for five decades, the Rothschild and Rockefeller patriarchs are finally launching a transatlantic investment alliance. It’s slower, quieter, more dispersed money than the Facebook founder’s. But it has staying power even hoodied tech billionaires may one day crave.
WPP must prove that Sorrell is worth his pay 30 May 2012 The media group’s investors are angry about a hike in the CEO’s salary and bonus. Sorrell makes a big contribution to WPP’s overall performance, though it’s unhealthy for any company to rely so much on one man. The board needs to show that shareholders benefit from his success.
Time for banks to gang up on rating agencies 25 May 2012 If Moody’s downgrades several large investment banks, short-term funding may dry up and collateral demands increase. In spite of well-known flaws, ratings remain hard-wired into global finance. The latest review gives bankers the perfect excuse to curb agencies’ power.
UK watchdog should starve "free" banking 24 May 2012 The UK’s chief bank regulator-in-waiting is right that apparently costless accounts are misleading. But forcing customers to pay for services that are currently free is a political non-starter. Capping hefty penalties that banks use to finance their operations is a better idea.
Mike Lynch should try to buy Autonomy back 24 May 2012 The software group’s founder is leaving HP months after the U.S. tech giant bought it for $11 bln. Other Autonomy execs had already gone. Having overpaid, HP is suffering the cultural woes of M&A. As for Lynch, he could yet exploit the mess to buy his baby back at a decent price.
IMF’s UK plan B: open only on Greek exit 22 May 2012 The IMF suggests a plan B for the UK that would involve more quantitative easing, a lower policy interest rate, long-term bank funding, tax cuts and government spending. Such risky policies aren’t essential now. But many of them will be if a Greece exit crushes the euro zone.
Barclays kills two birds with one Rock 21 May 2012 The UK bank is placing its 20 pct stake in BlackRock. Swapping shares in the asset manager for cash escapes new regulatory charges and boosts capital as the euro zone crisis hots up. But it’s a shame Barclays didn’t exploit stronger markets in March for this long expected trade.
Bank of England finally gets some external scrutiny 21 May 2012 The central bank’s supervisory Court has commissioned three independent reviews into the institution’s recent performance. The BoE’s governance and its expanded powers won’t be under examination. Still, it’s better than governor Mervyn King’s revisionist approach to the crisis.
Three lessons JPMorgan could learn from HSBC 21 May 2012 Both banks have large liquidity reserves to manage. But HSBC sticks largely to government bonds, clearly discloses the income they generate, and has two senior executives monitoring risk. In the wake of JPMorgan’s trading snafu, it’s an approach Jamie Dimon should consider.
Graff Diamonds IPO gleams but doesn’t dazzle 21 May 2012 The diamond merchant’s Hong Kong listing taps directly into the growth of the 0.1 percent. But even the super-rich are vulnerable to a financial crisis. A sober appraisal, which hinges on the value of Graff’s enormous stockpile, suggests the $4 billion price is fair but no steal.
Pru vote heralds new normal for investor protest 17 May 2012 A third of shareholders voted against the UK insurer’s pay report, miffed at retrospective tinkering with targets. A solid performer like Pru might once have suffered only mild gripes. But the shareholder spring means transgressions now meet with much meatier disapproval.
UK workers overtake Germans – in cheap cars 17 May 2012 More manufacturing is what the UK government wants. And General Motors’ decision to add car-making capacity near Liverpool is a victory, beating Germany at its own game. British workers have had to become cheaper, just like the pound. That has its downside. But it’s a way from A to B.
UK can mitigate but not avoid euro backlash 17 May 2012 It’s good that the banks and government have been preparing for a potential break-up. But more will be needed to shore up the lenders and the economy if the single currency does explode. Here’s what a plan B should contain.
Filling CEO hole was the easy bit for 3i 17 May 2012 Britain’s biggest listed private-equity firm has quickly elevated Simon Borrows, the M&A banker who joined last year as investment chief. If Borrows closes 3i’s big discount to net asset value, his next public company role will be much grander. The snag is there’s no quick fix.
The pound’s climb may send the UK down 15 May 2012 Sterling has risen against the euro, just when a weak Europe is holding back UK exports. The pound will climb much further if Greece triggers a still more serious euro crisis by leaving the single currency. It’s a big risk for the UK, which policymakers can do nothing about.
Private equity bubble hangover yields HR headache 11 May 2012 Guy Hands will fund future bonuses at Terra Firma. The largesse is a bid to keep staff at his buyout firm, despite falling management fees and little prospect of “carried interest” on the current fund. The EMI debacle gives Terra Firma an acute case of an industry-wide problem.
Hong Kong’s LME bid is big bet on China flows 10 May 2012 Hong Kong’s bourse has joined the bidding for the London Metal Exchange. If it can attract more volume from China, that would make up for the lack of obvious cost savings. But Beijing may open up anyway. HK’s lack of metals expertise makes the move look ambitious.
GSK’s hostilities may follow Genentech playbook 9 May 2012 Britain’s biggest drugmaker is bypassing the Human Genome Sciences board with its $2.6 bln offer - and has implied the price is firm. The GSK-HGS links probably rule out a white knight. But echoes of Roche’s 2008 tilt at Genentech suggest there may yet be a sweetener.
Shareholder spring claims first scalp at Aviva 8 May 2012 The UK insurer’s CEO is stepping down following a big protest vote over pay. Strategic doubts and underperforming shares had already put Andrew Moss’s future in doubt. But his departure raises the stakes for future shareholder uprisings - for both bosses and investors.
Markets give HSBC a first-quarter reprieve 8 May 2012 The bank’s pre-tax profit rose by a third, quarter-on-quarter, fueled by a rebound in fixed income trading. HSBC is getting closer to the cost targets CEO Stuart Gulliver set a year ago. But with markets far from normalised, he can’t count on a prevailing tailwind.