Year: 2009

UK sell-off shouldn’t provide free lunches

12 Oct 2009

Privateequity, IPO and infrastructure investors may relish the government s plan to accelerate the sale of a bit of its lossmaking £65bn portfolio of state companies. Privatisation isn't a bad idea. But some assets might be made profitable relatively easily. Seller beware.

UK plans liquidity reform that brokers will love

12 Oct 2009

The FSA wants banks to firm up funding by keeping a higher buffer of easytosell gilts. But the regulator wants the banks to create so much trading smoke that outsiders won t know if there s a real liquidity fire. That should be good business for bond brokers mostly the banks.

Still dorky, but Microsoft finally gets act together

12 Oct 2009

Investors and users have set a low bar for the software giant. Yet it has made progress on everything from its search engine to nagging antitrust lawsuits. The firm s new operating system should offer a pleasant surprise considering how little is expected.

Euro pain persists as US milks currency stimulus

12 Oct 2009

The eurozone is suffering a much bigger contraction than the US. One reason is the weak dollar. The cheap currency helps US exporters and makes imported goods pricier. It s the opposite for the expensive euro. The eurozone s suffering looks set to persist.

Telefónica still setting European telecom standard

9 Oct 2009

The Spanish operator is boosting next year s dividend by 22% another bullish sign from an operator that has outperformed its peers by a wide margin. The shares have done well, but there could be more upside, as long as Telefónica keeps hitting its targets.

Titan’s retirement marks hedge fund turning point

9 Oct 2009

It makes sense for Jim Simons, the Renaissance Technologies boss, to step back now. But coincidentally or not, it s also a moment when many hedge funds are regrouping. Simons has other work to do; his firm s outside investors will be hoping for, well, a renaissance.

Detroit’s post-bankruptcy enthusiasm misplaced

9 Oct 2009

As GM approaches 100 days since emerging from Chapter 11, chief Fritz Henderson is talking about an IPO. Fiat s Sergio Marchionne reckons Chrysler will be profitable in two years. Ford s Alan Mulally is talking up car sales. Antony Currie argues they re all a tad premature.

Wynn’s first-day win looks a little thin

9 Oct 2009

Some new issues in Hong Kong have tumbled, but shares in Steve Wynn s Asian gaming empire rose 13% in their first day s trading. But there s not much of a jackpot. The shares were priced last week, and the firstday bounce was just catching up with the peers gains since then.

Private equity tries out new move: the bodysnatch

9 Oct 2009

A fund founded by a former Citi executive has teamed up with Hong Kong tycoons to bid for AIG s Taiwan business. The tycoons inject cash into an ailing local company, giving Primus a kind of listed sidepocket. It s a neat trick for buyout firms that can find a willing host.

Obama’s Nobel Peace Prize: hope trumps reality

9 Oct 2009

The US president s uncontroversial vision hardly deserves the accolade. The award is premature at best. It only highlights the paucity of Obama s true foreign policy triumphs and may have the unintended effect of hampering Obama s noble aspirations. He should turn it down.

Pandit avoids fight over Phibro

9 Oct 2009

The Citi boss could have made a case for keeping the commodities trading unit not least its consistent profitability over the years. But the brouhaha of a bank propped up by the government paying $100m bonuses was too overwhelming. Hiving Phibro off was the right call.

Private equity exits have a long way to go

9 Oct 2009

IPOs are returning and private equity firms are selling assets too including Warburg Pincus and Blackstone making four times their money selling oil interests. But with exits still running at only 15% of 2007 levels, buyout barons won't yet be rubbing their hands.

AB InBev gets hangover insurance from Blackstone

8 Oct 2009

The Budweiser and Stella brewer has offloaded its American theme parks arm to the buyout firm for $2.3bn. Getting a deal done at all is an achievment. But AB also gets to skim off $400m from Blackstone's profits, dulling the pain of selling cheaply.

Citi’s Pandit gets equivalent of triple-A rating

8 Oct 2009

The recruitment firm Citi hired to survey its management to appease regulators unsurprisingly gave the CEO high marks. But Pandit deserves to stay for other reasons. Either way, the board should prepare for succession to avoid a BofAlike fiasco.

UK rightly takes on Ticketmaster/Live Nation deal

8 Oct 2009

The Competition Commission has provisionally ruled combining the dominant ticket agent with one of the largest concert promoters could hurt consumers. This should encourage US regulators which were already sceptical to gut the deal.

IMF must now help Latvia devalue

8 Oct 2009

A failed bond auction and a government struggling with budget cuts have again caused smoke to rise in Latvia. The Baltic state s real problem is a fixed and hugely overvalued exchange rate. Ten months after its first rescue attempt, the IMF should bite the devaluation bullet.

Bonds step in where bank loans fear to tread

8 Oct 2009

Nonfinancial companies have raised more money in bond markets than through syndicated loans so far in 2009. That s a first, and a dramatic change from two years ago when loans dominated. With banks capital now tightly constrained, this shift makes sense.

Rusal and Chinalco could be friends, if politics allow

8 Oct 2009

The oligarchs behind the Russian aluminium miner have to sell shares in an IPO to pay debts, and Rusal s cashrich Chinese rival might want to buy. If markets ruled, China s capital and ambition would match up well with Russia s resources. But politicians are fickle chaperones.

Axa is latest case of France’s bendy governance

8 Oct 2009

The insurer s CEO will take on the chairman s job too, while abolishing its dualboard structure. It s the latest example of a big French company tailoring its management structure to suit one man. France SA must realise that governance principles shouldn t be so pliable to whim.

Lloyds investors could pay heavy price for freedom

8 Oct 2009

The UK bank hopes to raise £25bn from various sources to escape the government s loanloss insurance and state control. But that could hit earnings per share hard. Shareholders will need to decide whether freedom is really worth it.

Telefónica spoils Vivendi’s Brazilian foray

8 Oct 2009

The French media group s E2bn bid for the telecom upstart GVT has now been challenged by Telefónica s Brazilian arm, Telesp. It s easy to see why Vivendi wants in on the hot market, but Telesp s ability to reap synergies gives it an edge in sealing the deal.

Satellite image duopoly needs Google effect

7 Oct 2009

The US government uses two public firms to produce images from on high. One new satellite is set for launch on Thursday. But launch pad explosions aren t the only risk. The companies need other clients in case peace breaks out. Deeper ties with the likes of Google should help.

EDF-Veolia manoeuvres hurt both companies

7 Oct 2009

The French government already controls electricity giant EDF. Now it may be cooking up a scheme for EDF to get a stake of up to 20% in water group Veolia, along with the two groups sharing a chairman. Such an effective nationalisation of Veolia doesn t make sense for anyone.

PPR hopes markets will let it flog laggard CFAO

7 Oct 2009

If investors are willing to buy, the French retailandluxury conglomerate will sell them the noncore Africabased trading division. A float would help PPR reduce its heavy debt load and focus on core businesses. PPR s shares might even lose some of their conglomerate discount.

AT&T tests telephone-free life

7 Oct 2009

The US wireless carrier will allow customers to use internet phone services over its mobile network. Landline operators long worried they would become lowvalue data networks. The same threat now applies in wireless. Consumers should benefit, but carriers will have to adapt.

New hope for Lehman’s $9bn European asset return

7 Oct 2009

The UK High Court dismissed administrator PwC's plan to return the remainder of the failed bank s European custodial assets in August. A new proposal might allow creditors to bypass the courts. The catch: 90% of creditors have to sign on.

Japan tries de-stimulus to boost recovery

7 Oct 2009

The prime minister is cutting Y2.5 trillion of wasteful stimulus, fulfilling an election pledge. It also relieves some strain on Japan s budget deficit and borrowing needs. The previous administration's stimulus hadn't worked; the antistimulus experiment is worth watching.

Santander shouldn’t blow its $7bn windfall on M&A

7 Oct 2009

The Spanish bank has floated a minority stake in its Brazilian business. Most of the proceeds are to be reinvested in the region. But the temptation will be to go shopping. With future capital needs unclear, and its home market still troubled, Santander must exercise caution.

Kazakhs take extreme way in bank restructuring

7 Oct 2009

Creditors in Alliance Bank, the central Asian country s fourth largest, may agree to convert some loans into equity. That s a global first, but don t expect a rush of imitators. It s just that the only alternative a liquidation of the bank looked even worse.

Bank capital demands won’t strangle recovery

7 Oct 2009

Bankers are moaning that harsh regulators will force cutbacks in lending just what the world doesn t need. It s hardly likely. Markets are helping banks build up capital look at Lloyds, BNP and SocGen. If more is needed, shareholders and employees can take more pain.