EMEA

Mediobanca chief’s best defence is to run faster

12 Nov 2019

The $10 bln Italian bank has outperformed peers and its balance sheet is clean. That justifies CEO Alberto Nagel’s past push into private and consumer banking. Now he’s promising big dividends and M&A. He needs it to ward off criticism from top investor Leonardo Del Vecchio.

Iliad’s baffling buyback tests investor credulity

12 Nov 2019

Xavier Niel’s French telecom group will spend 1.4 bln euros to buy out minority shareholders at a premium. At the same time, the entrepreneur is underwriting a share issue to raise the same amount. It looks a convoluted and costly way for the billionaire to lift his stake.

South Africa boozes in last chance debt saloon

12 Nov 2019

A ballooning deficit, dismal growth and unprofitable state firms are putting the Rainbow Nation’s debt on an unsustainable course. Low external borrowing makes a currency crisis unlikely. But a dependence on local bond markets can only delay the reckoning.

Spanish instability numbs markets into complacency

11 Nov 2019

Bonds and stocks barely budged after Prime Minister Pedro Sanchez failed to win a majority in national polls. Forming a government will likely mean striking a deal with far-left and pro-Catalan parties. With growth slowing and high debt levels, it’s hard to square investor calm.

New Credit Suisse investment-bank chief needs axe

11 Nov 2019

David Miller is taking over from James Amine, who helped run the unit for a decade. His top priority is to stop losing market share in key businesses like advising on deals. However, costs also look high, despite recent restructuring. There’s an argument for more cuts.

ECB decisions would benefit from a bit more light

11 Nov 2019

The central bank’s policy-making process is less formal and transparent than peers. New boss Christine Lagarde could change that by holding formal votes. Publishing the results, as the Fed does, would raise problems. But disclosing anonymous tallies would still be an improvement.

Lisbon tech confab is antidote to WeWork gloom

11 Nov 2019

Entrepreneurs and investors who joined the 70,000-strong Web Summit crowd were unfazed by plunging valuations of SoftBank-backed companies, including the office sublessor. Still, the reality check is making sustainable growth and positive cash flow the industry’s new watchwords.

Aramco has first-class seat on oil-tanker Titanic

11 Nov 2019

The Saudi giant’s IPO prospectus confirms it’s much more profitable than peers. Aramco also says a slump in oil demand could increase its market share. Yet the uncertain impact of such a shift ought to loom, iceberg-like, in investors’ minds as they weigh the company’s worth.

Richemont jewellery wealth dazzles Tiffany suitors

8 Nov 2019

The Swiss group’s weak first-half results mask the power of its Cartier and Van Cleef brands. The jewellers converted 33% of sales into operating profit, roughly double Tiffany’s margin. That gives rival LVMH a shiny target as it pursues a takeover of the American group.

ArcelorMittal gets convenient alibi for Italexit

8 Nov 2019

The steel giant wants to pull out from an agreed purchase of top European plant Ilva, blaming its loss of legal immunity. Quitting would spare ArcelorMittal the cost of upgrading the toxic site. That’s handy while global steel consumption is seen to be falling.

Natixis scramble to safety is nearly complete

8 Nov 2019

The French investment bank lifted underlying profit by 7% in the third quarter, mainly due to its buoyant asset management unit. New risk controls following a fund blowup are overdue, but welcome. Still, a target capital ratio of just 11.2% looks light compared to French peers.

Viewsroom: When the CEO breaks the rules

7 Nov 2019

McDonald’s has provided a map for other firms after ousting boss Steve Easterbrook over a consensual relationship with an employee. Elsewhere, Aramco’s IPO and Fiat Chrysler’s merger with Peugeot. Plus: Breaking Japan’s love of hard cash.

Cox: Aramco is an ESG investor’s worst nightmare

7 Nov 2019

The Saudi oil giant’s business model is predicated on humans continuing to spew CO2 into the atmosphere. Its governance makes WeWork look benign. Its monarchy is overly tolerant of human rights abuses and beheadings. Fund managers with a conscience should boycott the deal.

Vestas buttresses Denmark’s wind-power primacy

7 Nov 2019

The Copenhagen-listed turbine maker’s order books have bulged to 33 bln euros. More importantly, margins are withstanding the buffeting of subsidy removals, unlike at rival Siemens Gamesa. Alongside operator Orsted, tiny Denmark is king of the $1 trillion wind business.

UniCredit picks right time to cut Mediobanca cord

7 Nov 2019

Italy’s top bank is parting ways with its rival, which it helped found in 1946. The 8.4% stake sale won’t net big gains for CEO Jean Pierre Mustier, but removes a latent conflict and makes UniCredit leaner. The chief benefit may be to avoid a brewing governance row at Mediobanca.

Siemens will sand down its valuation discount

7 Nov 2019

The German industrial group had a good fourth quarter. Shares are valued at 15 times forward earnings, compared with 19 times for peer ABB. If Chief Executive Joe Kaeser can achieve his relatively modest 2020 earnings ambitions, he can close that gap with his European rival.

UK listing rules bonfire gives more pain than gain

6 Nov 2019

The government may let companies going public give founders extra voting rights in a bid to draw tech firms to London. Dual class shares, which may be temporary, won’t trigger a rush of IPOs. Yet weakening shareholder rights could hurt the City’s status as a financial hub.

Hadas: Sweden raises tone of negative rate debate

6 Nov 2019

Its central bank plans to increase the policy interest rate to zero. Current conventional thinking says that is a step in the wrong direction. But there are reasons to worry about minus signs on rates. If the economy emerges unscathed, others may copy the Swedish experiment.

EU banking union needs more than German concession

6 Nov 2019

Finance Minister Olaf Scholz is willing to consider an EU deposit insurance scheme. Countries like Italy may balk at some of his conditions. That such a sensible plan can take so long to come to fruition shows how far Europe is from rational policy making on financial regulation.

UK gilts’ odd stability is precarious

6 Nov 2019

Britain’s main political parties are in a bidding war to woo voters before an election. Yet UK debt yields are steady. Hopes of more Bank of England easing is one reason. Bond vigilantes will wake up if a smooth Brexit opens the way for rate rises and government spending surges.