May’s migrant musings a cautious positive for City 5 Sep 2016 The UK prime minister has cast doubt on the efficacy of a so-called points-based immigration system post-Brexit. That sounds good for UK financial firms hit by restrictions on non-EU workers. The catch is Theresa May has little choice but to get net migration down somehow.
Warsaw charm offensive shows London’s strengths 30 Aug 2016 Poland hopes to woo investment banks from the UK to its capital city. Credit Suisse, Goldman and BNP Paribas each have 300 or more staff in-country. But most are IT support, not revenue creators. The point is that financial hubs are built on far more than low costs.
Restaurant Group self-criticism bitter but healthy 26 Aug 2016 Bigger companies could learn from the UK restaurant chain’s honesty. It blamed a like-for-like sales fall of 3.9 pct on ill-thought-out menu changes, bad pricing and poor service. Closing stores helps, but stimulating demand is more important than tinkering with expansion plans.
Credit Suisse broking fail comes at unhelpful time 25 Aug 2016 Rio Tinto has dumped the Swiss bank from a two decade-long corporate broking role. The departure of two bankers close to the company, and an advisory mandate for rival Glencore may have been factors. Credit Suisse needs client stability after months of strategic uncertainty.
Trump and Farage have one big thing in common 25 Aug 2016 Brexit cheerleader Nigel Farage says Americans may defy the elite by voting for Donald Trump, as Brits did by opting to leave the EU. Farage, like Trump, was loose with facts but accurately gauged public anger. Betting markets, investors and pollsters ought to heed the lessons.
Time for Peppa Pig’s owner to earn its chops 25 Aug 2016 ITV has pulled a 1 billion pound proposal to buy production group Entertainment One, after Peppa Pig’s owner said it was worth more. With the share price now well below the 236 pence approach, managers need a plan B. Luckily, there are ways to stack up their undervaluation claim.
Jimmy Choo works hard to get just an inch 25 Aug 2016 The luxury shoemaker’s sales grew 9.2 percent in the first half and operating profitability improved. Its shares still trade at a discount to peers, hit by Brexit worries and exposure to one product. Despite good growth prospects, investors remain reluctant to toe the line.
Glencore’s risk-taking culture dies hard 24 Aug 2016 The world’s third-largest mining group deserves credit for selling assets, cutting debt and managing costs, but confidence in its strategy remains fragile. A $395 million coal hedging loss isn’t encouraging. Glencore is facing a trade-off between growth and security.
WPP shoos away grey swans 24 Aug 2016 The ad giant posted a strong increase in sales in the second quarter, driven by growth in Europe. Sources of uncertainty like Britain’s exit from the EU are a risk for the industry. But WPP’s scale and spread makes it resilient, at least to risks than can be foreseen.
UK housing crisis jars with builders’ fat returns 24 Aug 2016 In a normal market, Persimmon’s 36 pct return on capital would get competed away. Instead, sclerotic planning and smaller rivals’ limited access to finance act as barriers to entry. Builders’ fat returns could be vulnerable if the new UK government decides to take bold action.
Fund managers take long view by scrapping bonuses 23 Aug 2016 Star investor Neil Woodford is paying his staff fixed salaries, while former trade body head Daniel Godfrey is launching a trust on the same principle. Fund costs won't necessarily fall. But a bonus system can prompt unhelpful short-termism while ratcheting up overheads.
Big hand points to volatility for Swiss watches 23 Aug 2016 Exports to the UK grew 13.4 pct in July as the weak pound brought bargain-hunting tourists. But globally, shipments continued to slump. Falling, lumpy demand and increasingly mobile customers mean there is little for luxury brands like Swatch and Richemont to set their watch by.
BBVA bonus cap a helpful check on fintech fever 22 Aug 2016 The Spanish bank has asked European lawmakers to let it pay technologists whatever variable compensation it deems fit. A rule limiting bonuses to twice base salaries makes more sense for traders than coders. But it could prevent BBVA veering from innovation lust into overpaying.
Britain’s haul: 27 gold medals and a wooden spoon 22 Aug 2016 China underwhelmed in the Olympic medals table, while the tiny UK excelled. That’s a poor guide to more important competitions. Though Britain still has soft power, its value as a role model is on the wane. China no longer needs gold medals to secure its place on the podium.
Qatar’s investment strategy due a strategic pivot 22 Aug 2016 The gas-rich sheikhdom's big investments - banks, real estate and car makers - have not all worked out. Qatar should instead buy stakes in the end-users of its gas. With commodity prices low, defensive holdings in sectors you know make more sense than bets in ones you don't.
Traders can learn more from biology than history 19 Aug 2016 Nick Leeson is to teach would-be traders online, drawing on his headline role in Barings Bank's 1995 collapse. The former derivatives dealer has something to impart about risk management and market psychology. But controlling one's hormones is also a big part of making a profit.
ITV could take lead role in takeover drama 17 Aug 2016 The largest British free-to-air TV group is chasing Peppa Pig-owner Entertainment One. But ITV could become a target itself. A more than 25 pct drop in its share price and the weak pound make it vulnerable to opportunistic bids from European rivals like RTL.
Department store death spiral enters phase two 18 Aug 2016 Lower footfall is taking its toll on the likes of Macy's, which is closing 100 shops. But its last line of defence – deep discounts to lure shoppers – is irritating labels like Hugo Boss and Michael Kors. If brands withdraw their products, the doom loop will accelerate.
Post-Brexit UK consumers are oddly rational 18 Aug 2016 Flagging confidence didn’t stop Britons from spending a month after their vote to leave the EU. Consumers may be blind to the recession threat. Or they may be anticipating that a slumping pound will push up the price of imported goods, and pre-empting higher inflation.
UK fat-busting plan is incoherent 18 Aug 2016 A tax on sugary drinks is good for the public health and purse but may hit poorer families in the short term. Yet the government shirked another trade-off: restricting advertising of unhealthy foods, which could have changed consumer behavior at the expense of company profits.