StanChart anti-U.S. rant will resonate 8 Aug 2012 The reported denunciation of “f—ing Americans” shows a disrespectful attitude to the U.S. ability to impose financial rules well beyond its own borders. It’s hard to fight against the economic superpower, but the cavalier U.S. approach could eventually be self-defeating.
StanChart can’t avoid the long arm of the Lawsky 7 Aug 2012 The New York state regulator threatens to yank the bank’s license over claims it hid Iranian transactions. It’s a brash move that grabs the spotlight from federal enforcers like the DOJ. But if StanChart wants to do business on Wall Street, it has to play by local rules.
We need to talk about Deloitte 7 Aug 2012 The accounting firm’s consultants are accused of abetting Standard Chartered’s financial transactions with Iran. That’s bad enough. But reports of shoddy work elsewhere, including in HSBC’s money laundering cleanup, leave the impression that something’s not right at Deloitte.
Xstrata figures sustain hope for sweetened merger 7 Aug 2012 The miner’s first-half results were worse than last year, but better than expected thanks to cost cutting. The resilience may harden Xstrata shareholders’ expectations of improved merger terms from Glencore. But it is still far from a done deal.
Brent triumph a high point for imperfect benchmark 7 Aug 2012 Trading in the North Sea blend’s futures hit a record in June. London-traded Brent contracts outsold New York-traded WTI for the first quarter ever. The U.S. benchmark is a flawed gauge of global demand. But Brent, already a reference for most global oil trades, has problems too.
StanChart joins banking march into mire 6 Aug 2012 New York regulators accuse the UK-based lender of covering up $250 bln of sanctions-busting transactions with Iran. It’s a big setback for one of the last global banks to have dodged financial and legal woes. Even just a fine for StanChart will leave the industry lacking halos.
Time for UK government to hold its nerve over RBS 3 Aug 2012 Weak domestic growth and redressing mis-selling and technical glitches pushed the UK bank further into the red in H1. Though rate-rigging liabilities are a concern, RBS’s shift from shaky to secure bank is almost complete. Strengthening the state’s grip would be a costly error.
Olympics a bad metaphor for economic rivalry 2 Aug 2012 China breaks the rules, the U.S. loses its edge, Britain barely registers at all. It’s easy to see the Games as a mirror for reality. But economics is different. Co-operation is rewarded, the prizes keep growing, and there are many ways to win, provided the competitors play fair.
Man Utd counts on investors behaving like fanatics 2 Aug 2012 The English soccer club’s supporters expect nothing but success. That ethos carries over to Manchester United’s IPO, which seeks to value the enterprise at an optimistic 22 times EBITDA. Though Man Utd fans are rarely disappointed, buyers of the stock at the mooted price will be.
Barclays’ Qatari baggage gets even heavier 2 Aug 2012 Gulf funds spared the UK bank a state bailout in 2008. But the capital always looked costly and an “advisory” relationship with Qatar slim value. If a regulatory probe into disclosure discredits what’s left of Barclays’ top team, the deal will look even more like a Faustian pact.
Partners’ noise can’t mask value for BP in Russia 1 Aug 2012 BP’s partners are playing hardball over their Russian joint venture. But a nixed dividend and legal noise are mostly distractions. TNK-BP’s core business shouldn’t be affected, and its valuation has become clearer. With Rosneft circling, BP should have a strong position.
BP pain extends well beyond Gulf of Mexico 31 Jul 2012 Hobbled production at BP’s deepwater business contributed to the UK oil major’s clanger of a quarter. But it also struggled in Russia and took big write-downs on U.S. shale, refining, and an Alaska project. Even though these are mostly one-offs, the investment case looks challenged.
Vivendi may be out of pocket on EMI by salving EU 30 Jul 2012 The French group’s Universal Music arm could sell over a quarter of its British target’s business to appease European trustbusters. Yet Vivendi still must pay 90 pct of the $1.9 bln purchase price. Lost profit and synergies could cost it much more than if the EU nixed the deal.
Olympics feel good value, even if they aren’t 27 Jul 2012 The world may gloat at London’s mishaps. And for the over-extended UK, the economic wisdom of spending $14 billion on the Games is uncertain at best. Yet British spirits are high. Olympic investment is paying dividends, even if they aren’t strictly financial.
Barclays still in the mire despite strong half 27 Jul 2012 The scandal-hit bank’s shares surged as a 4.2 bln stg pre-tax profit beat forecasts. But the 10 pct ROE isn’t so juicy if you factor in regulatory changes and provisions to cover past sins. A replacement CEO is still months away. And now the CFO is under investigation.
Miners’ journey back to normal will be a hard slog 27 Jul 2012 The sector’s software-like margins were due a reality check. Results from Vale and Anglo American confirm it has entered a period of more challenged returns. Stubborn costs will take time to ease. After a decade-long boom, reversion to the mean will be painful.
Shell struggles with market myopia 26 Jul 2012 It was never going to be a stellar quarter after the recent fall in oil prices. But Shell’s big Q2 miss is a blow, particularly after its dividend disappointed some investors in Q1. Few oil majors look better-positioned for the future, but expectations-management needs work.
Lloyds weighed down by familiar bugbears 26 Jul 2012 Further hits from insurance misselling pushed the UK bank into the red again in the first half. But underlying trends remain sound: bad debts are falling and the margin outlook hasn’t worsened. Plus the government’s new loan support scheme may help both Lloyds and the British economy.
Vodafone pay endorsement should hearten CEOs 25 Jul 2012 Britain’s “shareholder spring” shouldn’t cow bosses too much. Investors remain relaxed about executives getting filthy rich - provided companies perform, of course. Look at the huge support for Vodafone, the telco whose CEO will make more than 500 times the average UK wage this year.
UK’s big GDP shock may herald more stimulus 25 Jul 2012 A 0.7 pct fall in GDP in the second quarter is much worse than expected. Construction accounts for half the drop. True, the figures exaggerate the pain: the Royal Jubilee, wet weather and Europe were all drags. Even so, the under-fire government may feel compelled to respond.