Year: 2009

Bud needs to fight to retain its fizz

3 Feb 2009

InBev, the new owner of America s favourite beer, has a mountain of debt to repay and assets to sell. The ruthlessly costconscious Belgian brewer has enough options to avoid a cash crunch but as growth slows, InBev s $62bn binge bears a distinctly topofthemarket flavour.

Vodafone under Colao: so far, not bad

3 Feb 2009

Six months in as CEO and Vittorio Colao is upping the mobile giant s fullyear targets. That mostly reflects beneficial forex shifts. Meanwhile, inherited problems are biting in Spain and Turkey. But Colao has made some good early decisions and his defensive strategy looks right.

Wall Street trade magazines must adapt to malaise

3 Feb 2009

Financial lad mags and wealthporn titles like nowdefunct Trader Monthly are falling victim to the bust. But inventive publishers can still reach the nextgeneration masters of the universe. Tarp Lobbyist could be the next hot title.

Dutch bad bank tries to outfox markets

3 Feb 2009

The government is insuring E30bn of ING mortgage assets at a premium to their market values. It looks like a hairy transfer of risk to taxpayers. At least the government obtained independent due diligence. The scheme is clearly appealing to shareholders, but is not easy to copy.

Has Citi found a way to muzzle lending critics?

3 Feb 2009

The ailing firm s disclosures on how it s using $45bn of government capital are a tad simplistic but so are arguments that banks aren t lending enough. Breaking out the numbers is helpful, but won t silence those who assume only an absolute increase in lending is a success.

Murdoch turns up the heat on Berlusconi

3 Feb 2009

The Australian magnate is proving that he has far from met his match in the Italian premier and rival media tycoon. With advertising weakening and the digital switchover looming, Berlusconi s Mediaset looks vulnerable to a nimble and aggressive Sky Italia.

Kazakh bailout pays only lip service to Keynes

2 Feb 2009

Kazakhstan s bank bailouts and stimulus plan superficially resemble western models Keynes inspired. But nepotism, revengeseeking and Russian influence may play larger roles. With Washington Consensus policy out of fashion, it will be difficult to attract private capital later.

Private equity still alive, but hardly kicking

2 Feb 2009

Henry Kravis says the industry is not dead . But to buyout bigwigs meeting at the industry s miniDavos, survival isn t assured. Listed funds suggest portfolios are nearly worthless. New credit is nonexistent. Kravis may come out a winner but many others will disappear.

Short on cash? Feed your workers with inventory

2 Feb 2009

Sounds harsh, but it's essentially what Chrysler is doing by offering $25,000 car vouchers as part of severance packages. It's a novel way to offload excess inventory akin to Credit Suisse s bonuses backed by wobbly assets. Not everyone can pull it off, though.

Euro airlines miss cheap oil bonanza

2 Feb 2009

A drop of more than 50% in a year in a major expense should be a big help. No such luck. Poorly timed hedges and the strong dollar have exacerbated the fall in traffic. For European airlines, 2009 looks grim. But lowcost carriers Ryanair and Easyjet should have a better time.

OpenTable IPO may not be fine dining for investors

2 Feb 2009

The sadbuttrue adage is that the credit crunch has made fancy restaurant tables easier to come by. Yet online reservation service OpenTable just filed to go public. The company may have a strong following in the fine dining set, but its prospects look less than appetizing.

Europe could benefit from periphery crisis

2 Feb 2009

A Brussels bailout of the union s weakest links might cost 1.5% of GDP, but could pay dividends in structural and political reforms. If the EU summons the vision to raise debt as a group, the investment would be worthwhile.

Obama wants banks to lend, but who’s borrowing?

2 Feb 2009

The US president wants to require any bank that receives government rescue funds to crank up its lending. But the Fed s quarterly bank survey shows US demand for commercial loans just fell off a cliff. Until borrowers business prospects revive, jawboning banks won t help much.

Irish banks dodge nationalisation yet again

2 Feb 2009

First Ireland insured its banks liabilities. Then it recapitalised the sector, but not by enough. Now it s set to inject more capital and insure dodgy assets. Maintaining a privatesector banking industry is a worthwhile goal. But the rescue package must work this time.

Don’t expect China to save the world

2 Feb 2009

Prime Minister Wen has no apologies for China s huge trade surplus. His logic: why regret policies which have helped eliminate poverty, just because rich countries responded foolishly? That's fine for China, but the attitude makes it harder to resolve the current global mess.

Bonus is not a four-letter word

2 Feb 2009

You wouldn t guess, to judge by the noise emanating from Washington and Zurich. The financial world has itself to blame for abusing the sound principle of flexible meritocratic pay. The industry should admit a collective screwup and propose a solution before lawmakers strike.

Chinalco looks set to mine Rio Tinto

2 Feb 2009

The Chinese stateowned aluminium producer could help the AngloAustralian miner reduce its $39bn debt burden and dodge a rights issue. But with Chinalco already sitting on a $10bn loss, Rio might have to offer a sweetheart deal. Other shareholders could find that less appealing.

Hedge rules belong on to do list, but not at top

2 Feb 2009

New rules forcing US hedge funds to register with the SEC are probably inevitable, and make some sense. But the industry didn t cause the financial sector's crisis. Moves to tighten regulation of hedge funds shouldn t hold up efforts to improve the direct supervision of banks.

ECB should keep cutting as deflation stalks

2 Feb 2009

Having taken euro rates back down to their alltime low, the ECB's JeanClaude Trichet was hinting at a pause in cuts. But eurozone inflation has since tumbled, while monetary data show shrinking loans and contracting money supply. The ECB should keep cutting this week.

Exxon’s record $44bn profit makes tempting target

30 Jan 2009

During a financial crisis when the US government is strapped for cash, it s not hard to imagine windfall and other taxes springing into lawmakers' minds. But look again 2008 may have been great, but Exxon s business is in secular decline.

Dell takes another futile bite at Apple

30 Jan 2009

The PC maker has long been Apple's mirror image producing bland, cheap computers rather than premiumpriced clever ones. Dell's efforts to make an iPhone clone will probably be as unsuccessful as its attempt to muscle into iPod s turf in digital music players.

US economy faces long slow rebalancing

30 Jan 2009

GDP fell 3.8%, less than expected, but the details were disturbing. Trade and savings imbalances were only partly corrected, while federal spending and inventory buildup were strong. Nominal GDP fell sharply, suggesting the US economy s biggest problem is its debt overhang.

BNP-Fortis saga nears acceptable compromise

30 Jan 2009

The botched sale sank Belgium s government and infuriated Fortis shareholders. A new proposal allows smarting investors to keep most of their insurance arm and reduce exposure to toxic assets. A weakened BNP will be happy to save cash and get Fortis s retail arm.

Roche offers Genentech holders $42bn cash therapy

30 Jan 2009

The Swiss drugs group has gone hostile, and cut the price, to land the 44% of Genentech it doesn t own. Fast cash even a little less of it might tempt minorities. But Roche s aggression suggests a strong desire to get the deal done. Holders might just want to play it cool.

Roche offers Genentech holders $42bn cash therapy

30 Jan 2009

The Swiss drugs group has gone hostile, and cut the price, to land the 44% of Genentech it doesn t own. Fast cash even a little less of it might tempt minorities. But Roche s aggression suggests a strong desire to get the deal done. Holders might just want to play it cool.

Osmium’s golden gizmo plays to currency fears

29 Jan 2009

The hedge fund is letting investors have their assets denominated in gold, while also offering exposure to the performance of a special situations fund. Hedgefund risk twinned with gold security could prove popular. But it also reflects unease about the dollar, pound and euro.

RBS boardroom undergoes overdue revolution

29 Jan 2009

During the gogo years, shares in the UK bank suffered from fears that a parochial board couldn t rein in boss Fred Goodwin s ambitions to build a global empire. The board is finally becoming more diverse. But only now the bank has beaten a forced retreat.

What’s the difference between Citi, RBS and BofA?

29 Jan 2009

All three banks have lost billions in the credit crisis and gone cap in hand to the authorities for aid. But Citi and RBS have held executives accountable and even started to shake up their boards. Bank of America, by contrast, has done nothing. That surely has to change.

The UK falls behind, and may stay behind

29 Jan 2009

The IMF's view that the UK will fare worst this year in the global downturn is less troubling than the underlying trends, highlighted by the Institute for Fiscal Studies, which suggest the UK will spend years grappling with much higher public debt.

Xstrata jumps queue with $6bn rights issue

29 Jan 2009

The once acquisitive Xstrata has too much debt for these times. It is pricing its issue at a hefty 66% discount to get it away. And its largest shareholder, metals trader Glencore, is providing assets rather than cash. As rival Rio mulls its options, the cash rush has begun.