Review: Making Big Data visible and tangible 31 Dec 2015 Projecting selfies onto a screen in real time shows both the value and vulnerability of today’s flood of ones and zeros. A London exhibition explores the good, the bad and the infrastructure of data from inventive angles. It makes a vital unseen world visible – and scary.
Jamie Dimon, 10 years on, is hard bank CEO to beat 30 Dec 2015 Looking back on a decade running JPMorgan, the boss has had missteps like the London Whale, big legal fines and clashes with regulators. Yet Dimon has fashioned a bank with leading market share, top-tier returns and a head start in fintech. It’s well placed for the next 10 years.
Fund glut will send Asia’s buyout barons off-piste 30 Dec 2015 Local private equity firms are flush with unspent capital. Though that’s a global issue, it’s more acute in Asia due to a dearth of sizeable takeover targets. Firms will be tempted to overpay for assets, buy businesses from rivals, or drift into unfamiliar kinds of dealmaking.
Capital drought will spark unicorn M&A orgy 23 Dec 2015 Plentiful money has detached valuations on many hot private tech firms from reality. About a third of the 144 private startups worth at least $1 bln are valued at precisely that much. As capital dries up, selling to bigger rivals or mating with other unicorns becomes appealing.
Banks’ low UK tax bill hands ammo to EU exit camp 23 Dec 2015 Seven big investment banks paid just $31 mln of UK corporation tax on profit of $5.3 bln in 2014, Reuters has found. Historic losses reduced the bills, and taxes paid by employees remain chunky. But the revelations will help those agitating for Britain to quit the European Union.
Qatar price for Turkish bank reflects weaknesses 22 Dec 2015 The Gulf state’s largest lender says it will pay National Bank of Greece 2.75 bln euros for Turkey’s Finansbank. A price equivalent to around one times book value looks cheap. But business conditions have worsened. Qatar National Bank may find it hard to generate economic profit.
Chinese corruption drive may thin out M&A bidders 21 Dec 2015 Fosun’s decision to drop its bid for private bank BHF Kleinwort Benson may be unrelated to the brief disappearance of its boss. But corporate predators from China account for 7 pct of global cross-border takeovers. A crackdown on graft could lead to less competition for deals.
Europe’s bank pay rules are dispiriting 21 Dec 2015 Regulators want the region’s bonus cap to apply to all lenders. There’s a token concession: small banks and fund managers they own may get waivers for variable compensation that’s deferred or paid in shares. But firms presenting no systemic risk will have less cost flexibility.
Portugal pays high price for past banking sins 21 Dec 2015 Its taxpayers will stump up 3 bln euros, or 1.7 pct of GDP, to wind down troubled lender Banif. The move follows a flawed 2013 rescue. The new plan resolves the issue. But it also shows Portugal’s economic weakness and the difficulty of making creditors pay for bank failures.
China’s P2P purge will boost Lufax and Ant 21 Dec 2015 Authorities are cracking down on a sector that houses two of the world’s most valuable financial startups, with ties to Ping An and Alibaba respectively. Peer-to-peer lending has seen explosive growth and little oversight. Driving out the cowboys should benefit the big two.
More Carney sounds better for BoE than for him 18 Dec 2015 The Bank of England governor may stay on for three years longer than he planned. Carney has done well so far, but implementing reforms and steering an unbalanced economy look like tough challenges. Add the risk of Britain leaving the EU, and staying may have diminishing returns.
The Fed may be cutting rates again within a year 17 Dec 2015 With official U.S. money finally costing something, there’s a risk that market overreaction saps funding in emerging markets and hurts exports as global demand softens. While a swift retreat might be insignificant on paper, it would harm the central bank’s credibility.
Safe havens scarce in brewing high-yield storm 17 Dec 2015 Junk bond investors were battered by problems in energy, commodities and the collapse of a Third Avenue fund in 2015. Losses are likely to spread as the Fed raises rates and risk-averse investors rein in lending. Bets that Europe will be able to provide shelter look wrong-headed.
StanChart belatedly fills most important role 17 Dec 2015 The emerging markets bank has hired HSBC’s Simon Cooper to run its corporate bank. Sorting out StanChart’s mess requires deep knowledge of emerging markets and corporate lending – neither of which new CEO Bill Winters obviously has. Cooper is plugging a vital gap.
Euro banks’ post-Fed good cheer looks short-lived 17 Dec 2015 European bank shares are up after the U.S. rate rise, aided by hints that future increases will be gradual. But EU rates won’t follow anytime soon, and $9.8 trln of non-U.S. dollar credit could get harder to service. Nor is the pace of future Fed hikes set in stone.
Pricey fintech deal may fall shy of industry hype 16 Dec 2015 Global Payments is forking over $4.3 bln for rival Heartland Payment Systems. It looks like a conventional tie-up in a hot market already losing steam. Cost savings probably won’t cover the 20 pct premium, meaning the buyer needs to boost sales to justify the steep price.
Barclays needn’t rush to get out of Africa 16 Dec 2015 As new boss Jes Staley plans the UK bank’s strategy, emerging markets may look an obvious place to cut. Africa sits oddly in a group that wants to be half American, half English. But the continent’s growth potential, and current commodity turmoil, argue against selling at a low.
Banks ponder blockchain’s first-mover disadvantage 16 Dec 2015 Lenders are racing to adopt Bitcoin-style technology to cut their costs. Successfully incorporating so-called distributed ledgers could eventually cut $20 bln from industry costs. But it’s not clear what models will work, and whether free-riding rivals will share the prize.
China’s edgy tycoons will send more capital abroad 16 Dec 2015 Fosun boss Guo Guangchang is among the country’s most respected business leaders. His brief disappearance suggests no-one is safe from Xi Jinping’s graft crackdown. The heightened campaign, plus economic and currency worries, could worsen China’s capital flight problem.
Third Ave teaches finance – and management – 101 14 Dec 2015 The U.S. investment firm’s closure of a high-yield fund, blocking withdrawals, has rattled markets. The episode echoes past failures caused by promising liquidity in illiquid assets. The Third Avenue CEO’s abrupt exit suggests flawed oversight, too. But contagion remains a risk.