Co-op bail-in would set bank creditors on edge 23 Mar 2017 The Co-operative Bank needs capital again, and markets are fretting over the risk of a resolution. Given Co-op’s ongoing losses, the Bank of England could justify one. The risk is investors think that even banks with respectable capital ratios aren’t safe from regulators.
Next takes fashion tips from financial world 23 Mar 2017 The retailer has subjected itself to a stress test – previously the stuff of banks. The result: if a store’s sales fall 6 pct a year for a decade, its net profit margin will halve. Openness about problems is welcome. But this voluntary exam may gloss over some other risks.
Hadas: The stakeholder revolution has been delayed 22 Mar 2017 Robust takeover rebuttals by Unilever and Akzo Nobel suggest that explicitly ethical stakeholder capitalism can overturn the idol of short-term shareholder value. That mostly makes economic sense. But the pressure for quick financial results is increasing. Compromise, please.
Markets can ease Bank of England inflation dilemma 21 Mar 2017 Prices rose 2.3 pct in February, surpassing the central bank’s target for the first time since 2013. Market rates and sterling rose. This tightening in monetary conditions might allow Governor Mark Carney to defer a hike in official rates until the economic outlook is clearer.
Brexit could weaken Britain’s puny productivity 21 Mar 2017 As in most developed countries, UK companies are struggling to produce more with the same workers. Exporters and foreign-owned firms are the notable exceptions. If leaving the European Union squeezes trade and shrinks foreign investment, living standards will suffer.
Aberdeen-StanLife offer thin gruel on two-CEO move 20 Mar 2017 The fund managers have spelled out how Chief Executives Keith Skeoch and Martin Gilbert will split the job after their planned merger. But it’s still a fudge, with too much room for discord. Judging by the share price, investors are giving the deal two thumbs down.
Colao trades one Vodafone risk for another 20 Mar 2017 The telco chief’s joint ventures in India and the Netherlands are a clever way to get scale and efficiency, and may help Vodafone’s valuation. The catch: investors depend on Vittorio Colao keeping his JV partners sweet. Too much success or too little could jeopardise the balance.
George Osborne’s newspaper gig is lose-lose deal 17 Mar 2017 British politicians tend to pursue wealth after leaving high office. The former British chancellor is doing so at BlackRock, but has added a twist: he will edit London’s Evening Standard while remaining a member of parliament. The tawdry arrangement devalues both institutions.
Diamond noses ahead in ex-Barclays nags’ derby 17 Mar 2017 The former bank boss has bid a rich 15.5 mln stg for stockbroker Panmure Gordon. It’s a low-key return to UK finance. Even so, Bob Diamond is faring better than former lieutenants Rich Ricci, who is currently low on luck at Cheltenham’s horse races, and Jerry del Missier.
Anglo raid is a complex way to do simple thing 16 Mar 2017 Indian magnate Anil Agarwal appears to be building roughly a 12 percent stake in the mining group. In fact he is renting it, using an exchangeable bond to get access to the votes. The structure is clever, but suggests he is more interested in influence than direct financial gain.
Agarwal weakens Anglo’s breakup defences 16 Mar 2017 Indian billionaire Anil Agarwal’s raid on the UK-listed mining giant may be a prelude to asking for the company to break itself up. Splitting off South African assets might create value. Boss Mark Cutifani may still prefer another course, but the pressure on him is now rising.
Indian tycoon bets house on Africa in Anglo raid 16 Mar 2017 Anil Agarwal's personal 2 bln pound raid on Anglo American reveals a wish to build a global mining giant. There is little overlap with his London-listed Vedanta. But Agarwal has a keen interest in Southern Africa - and a 12 pct stake would give him prime position in any break-up.
Britain’s budget U-turn merits Brexit deal alarm 15 Mar 2017 Chancellor Philip Hammond has reversed last week's tax hike for self-employed workers. As EU exit negotiations begin, the UK critically needs a united government that can be firm in the face of political pressure. Ditching a defensible reform implies the opposite.
Glaxo boss pay cut is a false economy 15 Mar 2017 The pharmaceutical group will pay new Chief Executive Emma Walmsley a quarter less than predecessor Andrew Witty, on account of her inexperience. Laudably, GSK was responding to shareholder pressure. Yet the cost of inexperience could easily outweigh the salary savings.
Hogg exit only half solves Bank of England problem 14 Mar 2017 The central bank’s deputy governor has resigned after a UK parliamentary committee criticised her for failing to disclose a conflict of interest. Better late than never. However, the BoE’s tardy response to the affair has exposed a tin ear that will require attention.
Pru’s plain sailing faces potential Asian squall 14 Mar 2017 The UK insurer beat forecasts and is on track to meet 2017 growth targets. One wrinkle is that its Asian business is increasingly reliant on sales in Hong Kong, which could be hit by Chinese capital-flight curbs. Any slowdown will, however, take a while to dent earnings.
Amec gets lucky with Wood Group merger 13 Mar 2017 The British oil services group is being swallowed by its bigger rival in a 2.2 bln stg all-share deal. After writing down contracts and losing a CEO, the synergies give Amec a healthy boost. Better still, it’s being offered a premium to install hopefully better management.
Second Scottish vote could still mean hard Brexit 13 Mar 2017 Sterling rose against the U.S. dollar as Scotland’s first minister called for another independence referendum. One theory is Prime Minister Theresa May will need to take a softer line on Brexit negotiations to persuade Scots to stay. But a hard divorce is still possible.
Bovis Homes suitors have good reasons to pitch low 13 Mar 2017 The UK homebuilder has attracted interest from two peers. The rival premiums of 5 pct and 7 pct appear underwhelming. But a takeover would be a quick fix for investors’ worries about management and building standards, and there are few justifications for a much sweeter offer.
Bank of England deputy governor Hogg should resign 13 Mar 2017 Charlotte Hogg failed to inform the UK central bank that her brother works for Barclays. While a sin of omission, it’s serious for an institution that holds itself and others to a high standard. If she stays, it would hurt the bank’s reputation.