Year: 2009

Carrefour turns its back on Russia’s promise – fast

16 Oct 2009

The French retailer will leave Russia barely a month after opening its second store there. Shareholder pressure may have prompted the abrupt reversal. But it looks like Carrefour can t afford the uncertainties and high corruption costs of this otherwise attractive market.

NBC not best ad for GE’s capital allocation skills

16 Oct 2009

The US industrial conglomerate may finally part ways with the media arm it spent 24 years and at least $33bn assembling. A Comcast deal valuing NBC at $24bn wouldn t be a total disaster but Rob Cox and Aliza Rosenbaum say it s hardly a vindication of GE's management philosophy.

Barclays gets back to something like normal

16 Oct 2009

The UK bank is confident enough to get on with its strategy of beefing up European retail operations. It acquired Citi s Portuguese credit card business and is in talks to buy 135 Italian bank branches. More moves are likely as rescued banks restructure.

Beware the limits of UK house-price derivatives

16 Oct 2009

Contracts that enable traders to bet on where house prices will be years hence may express a market view on the direction of travel. But this year s predictions have been all over the place. Derivatives are a risky tool for divining future house prices.

London should forget its fantasy-island airport

15 Oct 2009

Mayor Boris Johnson s plan for a new airport on the Thames Estuary doesn t tick enough boxes. Construction would be hugely expensive and the area s birds could be a crippling problem. Then there s the fate of Heathrow and its 72,000 employees. The idea is a distraction.

Latvia might show way forward for burden-sharing

15 Oct 2009

Swedish banks are aghast at Latvia s proposals to limit mortgage repayments to current property values. But the scheme could make devaluation more acceptable to Latvians. And a devaluationcap combination has a rough justice. Everyone was foolish and everyone will suffer.

Xstrata’s deal-making prowess takes a scrape

15 Oct 2009

First Vale, then Lonmin, now Anglo American. Xstrata s dealjunkie CEO Mick Davis is wracking up a list of failed mining transactions. Withdrawing the weak approach for Anglo may be sensible, and the game for Lonmin isn t over yet. But Davis reputation is becoming less fearsome.

Spanish economy gets blacker

15 Oct 2009

That doesn t mean gloomier. Quite the contrary. Tax dodging, always big in Spain, seems to be booming in the recession. But it s a dangerous habit that may make the government s task of balancing the budget harder when growth returns.

Goldman feasts while Citi flails

15 Oct 2009

The vampire squid posted another blowout quarter, earning $3.2bn. Vikram Pandit s megabank, meanwhile, managed to squeeze out just $101m. But strip out the funnies, including a bumper tax break, and Citi looks even more like a beached whale.

Google should think twice about investment binge

15 Oct 2009

The search giant thinks the recession bottomed in the third quarter. So it s now ready to invest heavily . Google s economic forecast is optimistic and its tryanything investment style is even more so. Investors should hold the company to its more recent discipline.

Second Sainsbury run could make sense for Qatar

15 Oct 2009

The UK supermarket chain s shares leapt on rumours of a reprise of the 2007 Qatari approach, crushed by the beginning of the credit crunch. That eleventhhour retreat left the investors looking amateurish. But they are savvier now and Sainsbury s shares are cheaper.

Kleinwort Benson adds to RHJ rag-bag

15 Oct 2009

The UK private bank is hardly a transformational deal for the Belgian investment firm led by former Credit Suisse whizz Leonhard Fischer. But after missing out on Opel and IKB, at least RHJ has a smallbutbeautiful consolation prize to add to its somewhat mixed portfolio.

Wasserstein’s influence didn’t surpass Lazard’s

15 Oct 2009

The legendary dealmaker put an indelible mark on the firm in his seven years at the helm. Wasserstein s outsize persona helped unite the divided house and push it from private to public. But a firm that has lasted 161 years can sustain the loss of even the most standout banker.

Lawyers could be biggest losers in BofA ruckus

14 Oct 2009

The release of documents relating to the bank s purchase of Merrill will include the legal advice BofA says it followed. Hindsight has endowed some legal eagles, as well as the bank s bosses, with tin ears at best. Things could get uncomfortable for counsel.

Dimon throws rivals a pay challenge

14 Oct 2009

The JPMorgan boss presided over another good quarter. But he is leaving more on the table for shareholders than usual: compensation for his investment bankers and asset managers is just 38% of revenues. That could put pressure on big payers like Goldman to follow suit.

Bruce Wasserstein dead – long live the deal

14 Oct 2009

No banker did more to make the dispensation of M&A advice an industry in its own right than the nowdeceased Lazard chairman. That legacy hasn t always benefitted investors. But it will continue to define Wall Street for generations.

Russia will struggle to keep all its gas promises

14 Oct 2009

Putin is eager to sign megadeals both with China and Europe. That sounds like good politics and sound economics. But Russian production is stagnating and new fields are beyond the reach of domestic technology. It s hard to see how he can deliver without major help from the West.

Dow at 10,000 outrunning reality – again

14 Oct 2009

The venerable US stock average first crossed that threshold in the dotcom bubble. It held higher for five years during the housing bubble. It could now be in a new bubble. If the Great Depression or the 70s are a guide, it'll be back and forth across 10,000 for years.

FHA follows Fannie and Freddie down zombie path

14 Oct 2009

The US Federal Housing Authority is the smallest and healthiestseeming of the USsponsored mortgage giants. But it ramped up lending to counter housingmarket decline. Robert Cyran explains how the fallout could leave the FHA dependent on taxpayers, like its larger cousins.

China fails to disrupt Rio Tinto

14 Oct 2009

Record Chinese imports are driving record production at the miner. Despite pressure for a price cut, the Chinese are effectively paying Rio and its peers the benchmark price. Detaining Rio s chief negotiator hasn t had much effect. China may have to rethink its strategy.

PAI Partners struggling to keep investors’ trust

14 Oct 2009

France s largest privateequity fund manager can t seem to move on from the debacle that led to a management shakeup in August. Now major investors reportedly want to reduce their commitments in the latest fund by 70%. It will be hard for PAI to regain their confidence.

Sumner Redstone loses money – but not his grip

14 Oct 2009

The media mogul is selling Viacom and CBS stock to pay down debt at his holding company. After the offering, his economic interests in both will be around 7%. But he ll keep more than 70% of the voting control. One more reason to avoid the stock.

Lehman bonus suit is speculative, logical and ugly

13 Oct 2009

Former employees of the failed bank in Europe have followed expresident Joe Gregory in filing gigantic claims for lost earnings. As creditors, they have as much right as anyone to test the bankruptcy court's compassion. But they don't deserve much sympathy if they lose.

US healthcare bill twists already tangled system

13 Oct 2009

The bill approved by the Senate Finance Committee does increase healthcare coverage. But it adds complexity in areas like crosssubsidisation and fails to tackle widely recognised problems like lawsuits. It risks making the system even less economically efficient.

Reliance Comm audit caps annus horribilis

13 Oct 2009

A leaked audit alleging that Anil Ambani s telecoms group underreported revenues relating to government licences comes as the Indian tycoon is due to face his brother in court in a dispute over gas pricing. The strains on Ambani's investor relations are mounting.

ITV convertible puts rights issue off the schedule

13 Oct 2009

The UK broadcaster may be struggling to fix its rudderless board. But it is having more success in addressing its beleaguered balance sheet. A £120m convertible bond will add more debt but ease the burden of looming repayments. A rights issue has been averted if not forever.

Should private equity get a new name?

13 Oct 2009

Carlyle s David Rubenstein reckons private equity should rename itself change capital or valueadded equity . He has a point: private equity isn t the best description of the industry any more. But other suggestions, like feesquared capital , may be closer to reality.

Cisco keeps the acquisition machine humming

13 Oct 2009

The US networking giant s $2.9bn purchase of Starent Networks is the second of this size in October alone. And more deals are in the works. There s one problem this strategy hasn t paid off for shareholders over the past decade.

Economics Nobel follows anti-market zeitgeist

12 Oct 2009

Elinor Ostrom studies collective and traditional management of resources and Oliver Williamson shows why many transactions take place inside rather than between organisations. Diverse work, but a common theme: interest in decisions made outside of the conventional market.

Wasserstein’s illness gives Lazard wake-up call

12 Oct 2009

The investment bank didn t wait around to announce its boss was hospitalised. That s the right way for public companies to deal with such matters. But even if Wasserstein returns to work soon, clients will want a clear succession plan and shareholders should demand one.