Rio Tinto trips into bribery mine shaft in Africa 9 Nov 2016 The $67 bln mining giant has another scandal on its hands in Guinea, despite tightened controls after a similar problem in China. It's unlikely to derail the sale of Rio's remaining stake in the $20 bln Simandou iron-ore project to Chinalco, but collateral damage is unavoidable.
UK bail-in delay is part cop-out, part pragmatism 8 Nov 2016 The Bank of England has given British lenders two more years to meet thresholds for holding bonds that absorb losses if they fail. EU regulators are going soft on banks in general. But BoE concerns about a spike in bank funding costs are reasonable.
RBS gets grubby bill of health 8 Nov 2016 An official probe has found no evidence that the UK bank intentionally pushed healthy firms into bankruptcy for financial gain. Yet it has found over half the affected clients were treated inappropriately. To prove its independence, the regulator ought still to give RBS a fine.
M&S wisely turns to selective deglobalisation 8 Nov 2016 The UK clothing retailer will shut loss-making foreign stores, even in places like China where overall retail sales are still growing. It will keep stores where it has scale, or where the investment is done by others. The strategy sounds obvious. In retail it’s quite a novelty.
HSBC blows hot and cold on Chinese partner 8 Nov 2016 The UK bank says that its near-20 pct stake in Bank of Communications remains the “flagship” of its Chinese operations. The warm feelings are reciprocated. Yet HSBC just benefitted from an accounting change that implies the shareholding is anything but integral.
Cox: Trump would – briefly – make America great 7 Nov 2016 U.S. stocks are bound to freak out, Brexit-style, if the reality-TV star wins the White House. Yet the instability also would send investors in search of less risky assets. Beyond cash, those are mostly dollar-denominated. Longer-term, though, a President Trump is another story.
A divided town in a divided Britain 7 Nov 2016 Life is getting better, by many measures, in Hull. Yet the northern British city voted overwhelmingly to leave Europe, and its citizens aren’t sorry they did. Brexit is often seen as a conflict between progress and disenfranchisement, but it isn’t. One town can have both.
HSBC’s capital cloud lifts but returns remain dark 7 Nov 2016 The bank's capital ratio soared after a shift in the treatment of its stake in Bank of Communications. But net interest margins fell and returns remain below the cost of equity. Fixing that requires HSBC to quickly put capital to work in areas of strength like Asia and the UK.
UK bonds offer scant recompense for messy politics 4 Nov 2016 Investors are keeping faith with Theresa May's government. Though sovereign yields have climbed in the past month, the shift is largely down to rising inflation expectations and fading hopes for lower interest rates. The relaxed stance leaves few buffers against political shocks.
Viewsroom: What to watch for beyond Clinton-Trump 3 Nov 2016 Americans aren't just voting for the 45th president. House and Senate elections affect everything from Wall Street to the Supreme Court. And marijuana and healthcare figure prominently in state ballots. Meanwhile, there's more brouhaha around Brexit. And GE is shaking itself up.
Brexit divergence puts Bank of England in a bind 3 Nov 2016 The pound has fallen as investors brace for the economic pain of Britain’s exit from the EU. Meanwhile consumers are behaving as if nothing has changed. Rising prices will squeeze spending, leaving BoE Governor Mark Carney trapped between slower growth and higher inflation.
UK government court loss is no bar to hard Brexit 3 Nov 2016 Prime Minister Theresa May needs parliament's approval to trigger the EU exit process, judges ruled. She could win the vote even if she loses any appeal, and restricting May's negotiating position risks weakening her hand. The legal ruling is no roadblock to a damaging divorce.
Cox: First Boston-Bankers Trust may unite in 2017 1 Nov 2016 Credit Suisse and Deutsche Bank bought the Wall Street firms decades ago but are still subscale in the United States. The two could limp along, never meeting their cost of capital. Joining forces, and spinning off the combination, is an alternative with many virtues to consider.
Goldman has lucky escape from tech wreck 2 Nov 2016 Tech valuations present pitfalls for banks. Goldman Sachs valued Powa Technologies at up to $18 bln a few months before the UK payments app firm entered administration. Though Goldman was never hired, the disclosure is embarrassing - its recommendations carry significant weight.
StanChart’s returns goal hinges on cost rigour 1 Nov 2016 The UK emerging markets bank is making good progress on shedding its worst assets. But with third-quarter revenue only flat on the previous three months, it’s all the more important to hit cost targets. The challenge is doing so without losing more business.
Shell and BP offer two sides to same coin 1 Nov 2016 The Anglo-Dutch major and its UK cousin reported earnings that beat expectations. Both have performed similarly as investments. With $30 billion of assets to sell in the wake of its acquisition of BG, Shell is a riskier but possibly more rewarding bet on the oil price.
Carney delays Bank of England exit by bare minimum 31 Oct 2016 The governor is staying until mid-2019. That's a year longer than originally planned but two short of a full term. Facing down critics who were calling for his head confirms the central bank's independence. But the debate about its post-Brexit status has only been postponed.
Britain better off if Carney stays 31 Oct 2016 The governor’s tenure has become a test of the Bank of England’s status. If he left in 2018 the decision would spook foreign investors and embolden the bank’s domestic critics. Extending his term would signal that the British government still values independent monetary policy.
RBS dividends depend on finding branches saviour 28 Oct 2016 The UK bank says several parties are in talks to buy its Williams & Glyn network. This millstone was responsible for a 301 mln pound charge in the third quarter. Without it, Royal Bank of Scotland’s capital base looks strong enough to weather all but the biggest legal bills.
Britain’s Brexit airbag can’t cushion everyone 28 Oct 2016 Nissan’s UK plant will get state help if its competitiveness is harmed by Britain leaving the EU. Offsetting potential tariffs is unorthodox, but feasible and not especially expensive, even if rolled out to the whole industry. But picking winners also means picking losers.