Year: 2009

M&A rebound still mostly promise

25 Sep 2009

Cadbury, Disney and other headlinegrabbers may have made it feel like the merger business was back. Thirdquarter numbers tell a different, duller story. Surging share prices didn t inspire many bosses to act. They may be waiting for the economy to catch up with the market.

New UK bank insurance boss has tricky task

25 Sep 2009

Stephan Wilcke has lots of credit experience. He ll need that and more as head of the government s scheme. He has to cajole RBS and Lloyds to come in, and set up a firstclass operation. But the toughest job will be to ensure his agency can be wound down when markets recover.

HSBC inches awkwardly towards the inevitable

25 Sep 2009

The chief executive of the AngloAsian lender is moving from London to Hong Kong, nearer the bank s future growth and toughest regulatory discussions. But the chairman and finance director are staying in the UK. This may leave shareholders on both sides feeling shortchanged.

ITV finally gets something right in governance

25 Sep 2009

The struggling UK broadcaster won t appoint Tony Ball as chief executive after the TVwhizz objected to a potential chairman. The board made a good call CEOs shouldn t get effective veto rights on their bosses. For ITV, the move is a break from its awful governance record.

Chavez reaps big benefit from global stimulus

25 Sep 2009

Venezuela's strongman accuses the US and others of exploitation. But the return of liquidity has encouraged him to borrow $5.7bn locally and $4bn abroad and brought $46bn of energy commitments from Russia and China. The opportunistic Chavez is grabbing money while it s there.

G20 Vadera appointment not just spin

24 Sep 2009

Shriti Vadera, one of the UK prime minister s closest allies, is leaving to advise the next G20 presidency. The process of turning the body into a global monitor needs a champion, and Vadera is up to it. Plus the move will help keep Gordon Brown s contribution in the limelight.

US sports establishment wakes to full global reality

24 Sep 2009

The country s pro teams have imported players and exported games and gear, but remained averse to foreign owners. The financial crisis may end this protectionist streak with a sale of the NBA s Nets to Russia s richest man. The results could make leagues regret waiting so long.

Over-regulation of ratings could have happy ending

24 Sep 2009

There must be a point at which credit raters would give up officially sanctioned status to avoid unworkable red tape or financial liability for errors. If that led to governmentfree ratings and ratingsfree laws, Richard Beales says the financial world could be a better place.

Hostile M&A unforgiving of nuance

24 Sep 2009

Cadbury s CEO has unwittingly given the impression he sees logic in Kraft s unsolicited takeover proposal, and that his job is to get a full price. It s possible to reconcile his words with Cadbury s official denigration of the bid. But the slip still weakens the defence a bit.

Verisk’s $1.8bn IPO looks like risk worth taking

24 Sep 2009

The initial public offering of Verisk Analytics is the biggest US float this year. It s also one of the most attractive. Not only is it a solid, growing and defensible business but the insurance companies that own Verisk are eager sellers because they need the cash.

Brussels heat could shake up EU retail banking

24 Sep 2009

It s usually tough to get depositors to abandon big established banks. That s a problem for wouldbe new entrants. But the crisis may have undermined trust in market leaders, and regulators could force disposals. There s an opportunity for outsiders with unblemished brands.

Putin call to Western gas groups shows desperation

24 Sep 2009

The Russian prime minister has invited oil and gas majors to invest in developing the gigantic Yamal peninsula gas fields. But he is in a weak negotiating position. The majors should demand tough legal and political changes before they get carried away by greed.

Twitter’s $1bn valuation is for twits

24 Sep 2009

The revenuefree microblogging site is said to have raised $100m at an implied $1bn price tag. There have been many opportunistic capital markets issues recently. But Twitter's valuation at twice Facebook's per user could be the best example of market exuberance.

Nomura still paying for its global ambitions

24 Sep 2009

The Japanese bank is raising $5.6bn of equity in an opportunistic share issue. The proceeds could be used to meet demands by clients, employees and regulators. Acquiring bits of Lehman Brothers last year was cheap. But being a top global investment bank gets ever more expensive.

Blankfein falls short on too-big-to-fail

24 Sep 2009

The Goldman boss has said that bank size isn t the problem. But his argument that more smaller banks would create a new too many to fail predicament is unconvincing. Dispersing risk would make a cleanup more manageable. And less concentration is good for competition too.

Hong Kong IPOs come down to earth with a bump

24 Sep 2009

The market s biggest listing this year, China Metallurgical, fell 12% on its debut. There are technical reasons why the stock was expensive. And investors are fickle. But as an antidote to complacency among issuers, buyers and underwriters, this reality check is overdue.

Guy Hands and Lloyds could use Hollywood endings

23 Sep 2009

The buyout baron and the UK bank are the respective owners of the Odeon and Vue cinema chains a booming sector just now. UK movie audiences have shown cinema to be recessionproof, while 3D films offer the promise of growth. So long as markets hold, that s a good case for IPOs.

Crunch casualties siphon off market fizz

23 Sep 2009

Barratt is raising over 75% of its market capitalisation in a £720m rights issue and placing. The UK housebuilder is paying the price for a costly boomtime takeover and positioning itself for a housing recovery. With markets in forgiving mode, others are following suit.

EU financial watchdog needs King on board

23 Sep 2009

Bank of England governor Mervyn King is set for a senior role in the new EU body overseeing financial stability headed by ECB counterpart JeanClaude Trichet. The appointment is a nobrainer. Without the UK on top table, European efforts to monitor systemic risk would be feeble.

Fed monetary policy shift faces signal problem

23 Sep 2009

With stock markets strong, the economy recovering and commodity prices buoyant, the federal funds rate should probably be at 23%. However the Fed has gunned monetary policy for so long that it can t get there without inciting panic. It could try harder though.

Private equity IPOs offer peek at fee gravy train

23 Sep 2009

In addition to carried interest and management fees, LBO firms harvest payouts for, among other things, doing deals and monitoring investments. The current crop of returnees to the public markets provides an opportunity to tally them up. Buyout barons win every time.

Emerging markets make up for NYSE’s German loss

23 Sep 2009

Allianz is the latest European company to cut back on surplus stock exchange listings including New York. The move will save the insurer cost and regulatory hassle. NYSE will be sorry to see another issuer go. But a recovery in emergingmarket listings offers ample recompense.

UniCredit should look beyond state funds stigma

23 Sep 2009

The Italian bank must decide whether to accept taxpayer money or brave the markets for E4bn of needed capital. UniCredit understandably would prefer to show it can stand on its own. But Tremonti bonds on offer from the state, while costly, provide valuable flexibility.

Rising crude price brings oil sands back in focus

23 Sep 2009

Canada s huge but expensive reserves fell out of favour as oil prices plummeted from their 2008 peaks. But a price hovering around $70 a barrel makes investment attractive once again especially if recovering demand and dwindling supply support the price or push it higher.

Opportunists swamp US IPO market

23 Sep 2009

The oddball collection of companies in the queue suggests frothiness, but the rush also betrays fear that the window may not be wedged firmly open. An apparent shortage of investors for a glut of property listings underlines the concern that current conditions may not last.

BofA wriggles out of $118bn loss guarantee cheaply

22 Sep 2009

Though it never officially used the scheme, the bank benefitted mightily from the appearance of US government backing. The agreed $425m looks like a bargain price for what might have been lifesaving cover. But the spat with the government has lengthened CEO Ken Lewis rap sheet.

Cadbury smart to force Kraft’s hand early

22 Sep 2009

The UK confectioner wants the takeover authorities to make US rival Kraft launch a formal offer or withdraw its unsolicited £10bn approach. The intensity of Kraft s advance means retreat is unlikely. But Cadbury is pressing the issue while it still has the market on its side.

FDIC considers allowing itself to be captured

22 Sep 2009

The agency s fund that insures US deposits needs cash. One potential plan is to borrow from stronger banks. That would be daft. The FDIC shouldn t be beholden to the companies it regulates.

Lloyds’ £3bn RMBS speeds return to yesteryear

22 Sep 2009

The UK bank looks set to pull off the first major postcrisis securitisation, the latest step back to the good ol , bad ol days. A successful comeback of the taboo investments would help improve bank funding profiles. But these securities need to be held in check by regulators.

Rally at risk as long-term investors shun stocks

22 Sep 2009

With equity markets up 40% from their March lows, it s clear that somebody is snapping up stocks. But the buyers may not be longterm investors. Institutions' equity exposure has tumbled from precrisis levels and that could make the current rally unstable.