Viewsroom: Samsung’s fiery future 13 Oct 2016 Cancelling production of its self-combusting Note 7 smartphone puts the company's reputation as well as $17 bln or more at risk. Cities, businesses and investors are putting Trump and Clinton to shame on climate change. Plus: Brexit politics get shaken up by the pound's decline.
Cox: Amsterdam has first-world financial dilemma 13 Oct 2016 The city that invented the stock exchange and multinational may be Europe's ideal post-Brexit banking hub. Beyond fears about traders' Ferraris clogging bike lanes, however, Amsterdammers will need to overcome a bonus cap. This is where populism may win out over Dutch pragmatism.
ING’s partial London confidence vote stacks up 13 Oct 2016 The Dutch lender is moving 60 staff to the UK capital even as Brexit fears push rivals to ponder leaving. London's financial centre status and talent pool remain big draws. And by relocating only execution-focused traders rather than sales staff, ING caps its downside.
British retailers have leverage over Unilever 13 Oct 2016 The maker of Dove soap wants supermarkets like Tesco to pay more for its goods as the pound weakens. They can’t easily pass that cost on to shoppers. Grocers have two reasons to play tough: Unilever's 15 pct operating margin, and their access to the consumer.
BoE’s credit bazooka is misfiring – again 13 Oct 2016 Bank of England Governor Mark Carney’s corporate bond-buying programme is failing to lower company borrowing costs. As in 2009, the bank can be accused of not being aggressive enough. Then again, Prime Minister Theresa May’s lukewarm support doesn’t help.
VTB snub only hurts UK if American banks follow 11 Oct 2016 Russia's second largest lender may pull investment bankers from London because of Brexit. But VTB's existing base in Vienna is unlikely to suit other big banks. And the Wall Street giants London would actually miss are unlikely to make big logistical decisions in a hurry.
UK gilts face growing array of threats 11 Oct 2016 Ten-year government bond yields have doubled from record lows within two months. Rising inflation expectations partly explain the waning influence of Bank of England asset purchases. A bigger risk is that pension funds and life insurers could become less captive buyers of gilts.
Greedy CEOs and lazy investors get Nobel treatment 10 Oct 2016 Economists Oliver Hart and Bengt Holmstrom shared the prize for their work on contracts. It helps explain why companies find it easier to borrow than raise equity, and why executive pay is so tricky. Those unfamiliar with abstract models will nonetheless recognise their ideas.
William Hill’s new card partner looks a better bet 10 Oct 2016 The UK bookmaker and Canada's Amaya, which owns PokerStars, are in talks to create a $5.5 bln company. A pending legal case at Amaya means William Hill needs to tread carefully. But with more online and abroad, Amaya looks more promising than recent suitors 888 and Rank.
HarbourVest cuts bold path through UK M&A maze 10 Oct 2016 The firm made an unsuccessful "full and final" bid for private equity fund SVG. Now it may offer more - by buying the company's assets. That blows a hole in UK takeover rules meant to stop buyers dithering. In this case, it's a fair outcome, but sets an unusual precedent.
Nervous markets shrink UK’s post-Brexit handout 10 Oct 2016 Finance minister Philip Hammond may boost public investment to cushion the blow of leaving the European Union. Infrastructure projects take time to get going, and the falling pound puts a limit on extra borrowing. Meanwhile, higher inflation will leave many feeling worse off.
UK settles for a non-financial return on Lloyds 7 Oct 2016 Britain is content to merely recoup the money pumped into the lender in 2009 when selling its remaining 9 percent stake. This seems a ropey return, even in the current era of financial repression. But only if the very real benefits of averting economic catastrophe are ignored.
Hadas: May offers British-style Great Leap Forward 7 Oct 2016 The UK prime minister's "quiet revolution" won't rival Mao Zedong's original in tragedy, but her mix of autocratic politics, nationalistic hope and economic nonsense is eerily reminiscent. A Brexit that offers less free trade and more xenophobia is a recipe for economic decline.
Sterling mayhem gives glimpse into future 7 Oct 2016 A flash crash saw the pound briefly plunge below $1.20 in Asia. Ultra-thin liquidity, computer-driven selling, and maybe even an erroneous "fat finger" trade might explain the speed of the slide. But there is nothing unbelievable about the levels to which sterling fell.
British bosses threatened with velvet handcuffs 6 Oct 2016 Theresa May will soon make it easier to hold firms liable for staff wrongdoing. Jittery board members will have kittens. Yet an analogous development - the scope for UK firms to agree U.S.-style deferred prosecution agreements rather than enduring guilt - could soften the blow.
Goldman rides only softly to SVG’s rescue 6 Oct 2016 The U.S. bank and Canadian pension funds outbid HarbourVest for the UK private equity investment fund. A little financial engineering and even the UK vote to leave the EU may have helped Goldman out. SVG investors get an offer that may prove only a little better, yet good enough.
British PM’s attack on QE sends wrong signal 6 Oct 2016 Theresa May has criticised the effects of ultra-low interest rates and promised changes. She's right that monetary policy alone cannot revive growth. If the government wants to boost the economy, the solution isn’t to undermine the Bank of England - but to lift spending.
EasyJet misery a foretaste of European airmageddon 6 Oct 2016 Growing overcapacities fuelled by cheap oil, security scares and Brexit jitters are hitting even highly efficient airlines like easyJet hard. The low-cost carrier expects a 28 pct fall in pre-tax profit. Less nimble rivals like Lufthansa and Air France can brace for worse.
UK migrant clampdown will be self-defeating 5 Oct 2016 Companies may soon face name-and-shame policies that make it less appealing to hire skilled foreign workers. It's part of Theresa May's plan to cut migrant numbers. This is a harmful option for a country with poor productivity and a deficit of domestic expertise.
Tesco recovery plan stacks up 5 Oct 2016 Excellent first-half results have given the UK grocer confidence to raise its ambitions for future operating margins. Three straight quarters of sales growth in the face of stiff competition and plans for more cost savings give investors every reason to buy the turnaround story.