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.
Colombian peace may have a price before a dividend 25 Aug 2016 A deal to end 50 years of conflict with FARC comes at a difficult time. Oil output is shrinking and inflation proving stubborn. Tax reform before year-end should help but thousands of rebels also will now need jobs. Any financial benefit from the war's end could take some time.
Apple tax fight is two wrongs in search of a right 25 Aug 2016 A spat between the U.S. and Europe over how firms like the iPhone maker, Amazon and Starbucks pay taxes shows the worst of both sides. America meddles, and Europe moralises. At heart is an issue both sides’ citizens should support: big companies too often avoid paying their dues.
Emerging market fans get South Africa wake-up call 25 Aug 2016 The rand has slumped since Finance Minister Pravin Gordhan was ordered to report to a special police unit. Falling stocks and bonds are a timely reality check for money managers who have been lured back to emerging markets. An indiscriminate hunt for yield generally ends badly.
Iconoclasts needed to topple central bank targets 25 Aug 2016 A reboot of global monetary policymaking is the best thing that could emerge from rate-setters’ annual Jackson Hole shindig. An overhaul is pressing as reality upends more and more economic orthodoxies. Ditching simplistic and discredited inflation targets would be a good start.
PPP flop hammers home China’s crowding out crisis 25 Aug 2016 Public-private partnerships on projects worth $285 bln were supposed to help cut costs and ease local government debt. Yet over 90 percent of funding is coming from state firms, a new report has found. It hammers home the extent to which state capital is crowding out the private sector.
Chile’s Bachelet faces her own Rousseffian crises 24 Aug 2016 The leftist leader's woes look like a breeze next to those of her impeached coreligionist in Brazil. Chile's corruption scandal, economic slowdown and rising pension crisis are small in comparison, but bad news for the copper producer's status as a bulwark of regional stability.
Banks’ own bitcoin is in the gift of central banks 24 Aug 2016 UBS has corralled four firms to help it develop a digital bitcoin-like currency so as to slash settlement times. Unlike the libertarian cryptocurrency, this approach depends resolutely on central bank approval. And while it may reduce risk, the benefits could also be a pipedream.
Clinton charity donors make the case for wind-down 23 Aug 2016 The would-be first family plans to reduce ties to their foundation if Hillary Clinton wins the White House. With energy firms and banks like Citi and UBS donating this year, shuttering the non-profit is the best remedy for assuaging any appearance of unsavory influence peddling.
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.
Microfinance leaves India’s banks in the dust 23 Aug 2016 After the near-collapse of the industry six years ago, small lenders to the poor are back and growing fast. A tight regulatory leash, low bad loan ratios, and high returns make microfinance a more attractive investment proposition than the country’s ailing state banks.
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.
Fed is losing friends on both sides of the aisle 22 Aug 2016 The progressive Fed Up group says the U.S. central bank is beholden to Wall Street. It wants more transparency and an end to dividends for banks. The Fed is already under pressure from conservatives. Now Democrats, too, may turn against Chair Janet Yellen and her colleagues.
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.
China opens door further to yield tourists 22 Aug 2016 China's $7.5 trln bond market is already fairly open to foreigners. But a looming "bond connect" would bring in extra buyers who don't want to set up shop on the mainland. Relatively juicy yields will be a big lure. The downsides are corporate opacity and limited volatility.
Rajan reforms can thrive with India’s new RBI boss 22 Aug 2016 Urjit Patel is a safe choice to lead the central bank. The deputy governor was a key architect of reforms introduced by outgoing head Raghuram Rajan. To earn the same level of acclaim, Patel must see these through and ratchet up the fight against bad debts.
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.
Saudi building bust may demolish prince’s reforms 17 Aug 2016 Low oil prices have left thousands of foreign construction workers stranded without pay, and some building companies in financial trouble. Saudi is trying to diversify away from oil, make economic reforms and avoid disrupting the social order. It’s not easy to do all three.
Don’t be duped by Europe’s dazzling dividends 19 Aug 2016 Company payouts are higher than normal relative to share prices. That is usually a signal to buy stocks, especially given ultra-low bond yields. But dividends are far loftier than may be sustainable when compared with expected earnings. Their siren call is better ignored.