Big insider scandal shows rules are working 1 Mar 2007 Indictments at brokers and hedge funds over leaked rating changes will cause pain on Wall Street. But it s exactly what the markets needed. A political backlash is the big risk. But this case shows the rules are adequate. It s enforcement that may have been lacking.
Dutch central banker misses point on ABN 27 Feb 2007 Nout Wellink raises the spectre of hedge funds like TCI forcing the Dutch bank to sell assets. He thinks that would be unacceptable. That maybe so, but TCI doesn t seem to be seeking formal influence of this sort. It s acting as a lightning rod for disillusioned investors.
Who’s the best paid CEO on Wall Street? 27 Feb 2007 And that s despite his investment bank s stock performing worse last year than any of its major rivals. In sheer dollar terms, it s Goldman s Lloyd Blankfein. But measured as a percentage of net earnings, Lehman s Dick Fuld comes out on top.
Sands puts brakes on Standard Chartered shopping spree 27 Feb 2007 The bank s new CEO has made organic growth his priority. That s a change from the acquisitive ways of his predecessor, Mervyn Davies. But Sands has a big job digesting recent buys. And, with Davies looking over his shoulder, he may have an extra incentive to make them work. The bank s new CEO has made organic growth his priority. That s a change from his predecessor, Mervyn Davies, who had a keen eye for deals.
A Dow Chemical mega-buyout seems unlikely 26 Feb 2007 The $54bn chemical giant s stock soared on speculation it would be private equity s next big target. But with the chemicals business coming off its peak, the smart money would be selling not buying. The $43bn chemical giant s stock soared on speculation it would be private equity s next big target.
Citi’s new CFO brings Amex breakup blueprint 26 Feb 2007 Gary Crittenden, who takes over for Sallie Krawcheck, knows a thing or two about winnowing down a conglomerate to its component parts. Amex created heaps of value over the years by hiving off Lehman and splitting its cards and brokerage. It s a model Citi may follow.
Panmure’s US buy may spark more transatlantic deals 21 Feb 2007 It s easy to see why Panmure is buying USbased bank ThinkEquity. It s to capitalise on the growth in US companies listing in London. The logic is understandable. But small financial firms don t have a great record of integrating rivals, and US listings could be choked off.
Hohn goes after ABN Amro 21 Feb 2007 The maverick fund manager, who pulverised Deutsche Boerse CEO Werner Seifert two years ago, has now turned his guns on the Dutch bank. It s certainly a tempting target. ABN boss Rijkman Groenink is probably better shielded than Seifert. But he d be well advised to listen.
Sberbank’s $8.8bn issue attracts heavy demand 21 Feb 2007 Russia s largest bank priced its rights issue at a slender 4% discount. And the stock isn't cheap. So why the stampede? Foreign investors felt they just had to be in it. Domestic buyers including a smattering of billionaires stepped up to the plate too.
Barclays gets back on the front foot 20 Feb 2007 The UK bank s drive to shore up its weak spots is working. It s getting a grip on costs in UK retail and slowing provisions growth. That should help Barclays hold on to the rerating it gained last year. But getting further into investors good books may prove harder.
Fed shouldn’t adopt inflation target 20 Feb 2007 Bernanke is keen to follow the central bank fashion with a single numerical goal. That would make his life easier. But a simple life isn t good for bankers. They should worry about liquidity, crises and financial imbalances.
Ponzi scheme’s latest victim: Bear Stearns 20 Feb 2007 A court has ruled Bear Stearns should have blown the whistle on Manhattan Investment sooner. But the firm did raise red flags. Bear Stearns must cough up $160m. But prime brokers have better reasons to scrutinise their clients than avoiding court penalties.
BBVA $9.6bn US deal has a whiff of empire building 16 Feb 2007 The Spanish bank is meeting its strategic aims with its buy of Compass Bancshares. But, at nearly 19 times earnings, it s paying richly. BBVA will have to work hard to make the deal add value, and get the support of its investors which the bank is again tapping for cash.
Credit Suisse boss goes out on a high 15 Feb 2007 Oswald Gruebel has surprised investors by retiring as CEO. But leaving now, as the group announces record results, has two advantages. It allows him to quit while he's ahead. And the strong performance of the investment bank unit makes its boss, Brady Dougan, a natural heir.
Geronzi and Arpe slug it out at Capitalia 14 Feb 2007 The Italian bank s chairman and its CEO would like to see the back of each other. Geronzi is opposed to a deal, while CEO Arpe is more pro. While it would be good if Geronzi went, Capitalia s shareholder pact stops either binning the other. A period of gridlock is in prospect.
Governments no match for markets in yen fight 13 Feb 2007 The Japanese currency keeps on falling 5% against the dollar since December. Investors like the highly profitable carry trade. European governments feel differently. But principles and fear keep them from intervening. They may come to regret this passivity.
UBS takes first step to making it up with investors 13 Feb 2007 The Swiss bank bounced back strongly in Q4. That will repair some of the damage wrought by bad call on US rates last year. Even so, UBS still looks to have more to do. It may not regain all its premium over peers until it shows it is firing on all cylinders.
Rothschild makes a schoolboy error 12 Feb 2007 The investment bank has been rebuked by the UK Takeover Panel for failing to warn a client that a stake above 30% triggers a full bid. This was Rothschild s third recent breach of the rules. It may suffer no financial loss, but the damage to its reputation is sure to hurt.
Can boutique bank stocks forecast M&A cycles? 7 Feb 2007 It s unlikely. Lazard and Greenhill are trading at or near alltime highs, which could imply the current boom is far from fizzling out. But being more reliant on M&A than larger rivals makes their stocks more volatile. That means they re unreliable longterm indicators.
Morgan Stanley’s the victor in Sulzberger spat 5 Feb 2007 Following a Morgan fund manager s criticisms of the newspaper s governance the Sulzbergers are pulling assets from the bank s custody. That may look embarrassing but it s really a great advertisement for the independence of Morgan Stanley s investment division.