Year: 2009

Repsol on right side of dividend row

7 Dec 2009

The Spanish oil group's top shareholder, Sacyr, has accused it of being too mean in cutting the dividend. But Repsol clearly couldn't afford the payout. Even now, it needs to increase debt to sustain investment. And it may yet have to sell its YPF unit or its Gas Natural stake.

RUSAL should face Hong Kong scrutiny

4 Dec 2009

The Russian aluminium giant's plans to list in Hong Kong could still come unstuck if the exchange doesn't give it the green light. The exchange risks damage to its own reputation if it fails to ask hard questions about the legal risks facing RUSAL's investors. Here are two.

Short sushi, long kimchi trade entices hedge funds

4 Dec 2009

Korean exporters have been eating Japan s lunch helped by an ultraweak currency. Some hedge funds are betting the won s weakness against the yen can t continue. The gamble makes sense but care is needed taking on a central bank that is selling, not buying, its own currency.

Hochtief pulls IPO as investors stay cautious

4 Dec 2009

The German building group may have had unrealistic aspirations for the market value of a 49% share of its concessions unit. But if the equity markets were anything like frothy, the 1 bln euro deal would have gone ahead. The European market isn't ready for a rush of new issues.

Rio investors should push BHP for better terms

4 Dec 2009

Rio Tinto was in a tight spot when it agreed a 5050 iron ore venture with rival BHP Billiton despite having a larger chunk of assets. The Rio board won't do anything. So if shareholders want a better deal, they'll have to turn on the pressure.

CLO stirrings could set new benchmark

4 Dec 2009

A new $250 million collateralized loan obligation looks puny in size and conservative in structure compared with credit boom offerings. But at least it could serve as a reference for future deals, which are certain to get riskier as a financial market recovery takes hold.

Why aren’t Chinese firms bidding for CICC?

4 Dec 2009

So far, none of the bidders for Morgan Stanley's stake in China's leading investment bank is local. This is probably because CICC management wants a foreign shareholder so it can justify Wall Street salaries. That's not great for Morgan Stanley or potential Chinese investors.

Leading UK politician makes poor case for Cadbury

4 Dec 2009

Peter Mandelson has warned against investors trying to make a fast buck on the battle for the UK confectioner. The powerful minister may have caught the public mood, but Cadbury is the wrong company to try to protect. Still, his threats make a hostile takeover less likely.

US jobs data tighten squeeze on Bernanke

4 Dec 2009

The nudge down in US unemployment to 10 pct is good news. But the Fed chairman this week cited rising job losses to quell calls for higher interest rates to fight soaring commodity prices. If commodities continue strong, the arguments for cheap money will soon wear thin.

Vivendi has nine months to show its worth

4 Dec 2009

The French conglomerate has delivered weak returns over the past five years and its new growth strategy looks unconvincing. Vivendi might not see any proceeds from its NBC exit until September next year. It should use the time to convince investors it deserves to keep the cash.

Candover blow-up doesn’t spell wider LBO carnage

4 Dec 2009

The UK buyout firm is winding down its latest 3 bln euro fund. Any future for the old shop would require raising a new fund. That ll be tough. Other ailing LBO firms will falter too. But Candover s early liquidity missteps should hold lessons for more aggressive rivals now.

No second coming for Resolution

4 Dec 2009

Happy birthday Clive Cowdery. Or rather to the UK entrepreneur's Resolution insurance company. And it's not so happy, either. A year since Resolution's float, Cowdery has agreed only one deal and the shares have fallen nearly 20 percent. Is it the end of life as Cowdery knows it?

US Senate bank bigwig’s Bernanke support looks odd

4 Dec 2009

Chris Dodd, head of the banking committee, faces the reelection fight of his life. So opposing the unpopular Fed chief s renomination would ve been an easy political win. Supporting Bernanke suggests he s more interested in leaving a legacy of financial reform than another term.

Debut TARP warrant auction vindicates Jamie Dimon

4 Dec 2009

At least it looks that way. The US Treasury s public auction pulled in a lowish value for its Capital One warrants. Sure, it s a market price but it makes earlier buybacks by Goldman and Morgan Stanley look rich, and suggests Dimon was right not to buy JPMorgan s warrants back.

GM right to give way in Chinese JV

4 Dec 2009

Ceding control in its venture with SAIC is not the climbdown it seems for the U.S. carmaker. The payoff, a new venture to target India, looks worth it. GM retains exposure to Chinese growth while getting a financially potent ally for new markets.

Peugeot strives for global reach with Mitsubishi

3 Dec 2009

The French carmaker, a small global player, is talking about closer ties with struggling Mitsubishi. It doesn't sound like a worldbeating combination, but the Japanese company's electric technology is a lure and Peugeot needs to get global economies of scale somewhere.

Barclays’ back-dated salary hike stretches rules

3 Dec 2009

Like other banks, Barclays is increasing base salaries for investment bankers a response to rules that most bonuses should be in deferred stock. But by backdating the hike, Barclays is effectively handing out a cash bonus. It is stretching the spirit of the regime.

Euro zone too weak to leave ECB life-support

3 Dec 2009

The ECB's third dose of annual funds will be the last, and may cost banks a little more. But ECB president JeanClaude Trichet was clear that policy is not about to tighten. Frail banks, weak lending and belowtarget inflation show why.

Germany doesn’t need Deutsche’s cynical PR stunt

3 Dec 2009

Josef Ackermann surprised his German banking peers and gained a little political kudos by proposing a common fund help midsized companies survive the credit crunch. But the Deutsche Bank boss's plan leaves less troubled rivals cold. They think they're doing enough already.

Bernanke needs to compromise with Congress

3 Dec 2009

The Fed chairman s efforts to shore up political and public support have left many far from convinced. If he wants to remain at the helm of the US central bank and to preserve its perceived independence the former academic would do well to show greater realism.

BoE backtracks on corporate bonds

3 Dec 2009

The UK central bank's plan to buy investmentgrade corporate bonds never made much sense. The British bond market was already recovering when the bank began buying, and it didn't buy much. Selling now would be welcomed by the market and let the BoE pocket some gains.

Comcast owners should beware the NBCU curse

3 Dec 2009

CEO Brian Roberts is finally a media mogul. At least the wait is over for the cable operator s shareholders. But as owners of Vivendi and General Electric learned, transformational deals involving NBC assets haven t always turned out so well.

Will CIC squeeze a juicy deal from Apax?

3 Dec 2009

The Chinese sovereign fund got egg on its face when it bought into Blackstone just before the bubble burst. But it may be able to get a better deal in its 800 mln euro latest foray into private equity, as it will be digging Apax out of a hole.

It’s not Made in England any more

3 Dec 2009

The Bank of England is relying heavily on surplus capacity in its forecast of muted inflation, but admits that this output gap is hard to estimate. Recent figures back up an analysis that UK manufacturing is still shrinking. Much of the supposed surplus may have gone for good.

Google bows to Murdoch

2 Dec 2009

After the news mogul threatened to switch to Microsoft's search engine, Google will allow publishers to restrict free access. The concession may not be all Murdoch, who has vowed to charge for content, would want. But it is a step in the right direction.

Dividend recap resurgence looks rash

2 Dec 2009

Carlyleowned consultancy Booz Allen is taking out a loan to pay the buyout firm a $550 mln dividend. It is the sixth company this year to recapitalize this way. Even with the new debt, Booz won't be overleveraged. Still, given recent blowups, investors should be cautious.

GM’s new CEO must be jack of all trades

2 Dec 2009

Fritz Henderson's successor needs some restructuring savvy. The ideal candidate also needs to bring fresh ideas, be a cheerleader and a realist, be able to handle a strong board with an independent bent and the US govt and be willing to wait for a payoff. Good luck with that.

BofA’s $45 bln repayment clears way for new CEO

2 Dec 2009

Departing boss Ken Lewis may have fouled things up by poorly executing on deals during the crisis. But with Bank of America now about to release itself from the shackles of TARP, his successor can focus on the dormant banking monster and even get paid for the job.

China-Taiwan deals more symbolic than strategic

2 Dec 2009

ICBC, China's biggest bank, may buy a $3bn stake in Taiwan's Cathay Financial, while Taiwan's Fubon has bid for a stake CICC, a leading mainland investment bank. These deals would signal a thaw in crossstraits relations. But minority stakes will give buyers few hard benefits.

UK funds should be careful what they wish for

2 Dec 2009

The trade group for pension funds has asked the government to issue more inflationlinked debt. Never mind the minimal yields, the members are desperate to buy. With the UK s burgeoning budget deficit, they are likely to get their way. They won t enjoy it.