EMEA

Back to first principles for BSkyB chairman

13 Oct 2011

One of the broadcaster’s major investors has called for James Murdoch to step aside as chairman, because scandal at News Corp has highlighted the need for unconflicted leadership. Murdoch deserves a seat on the board. But either way, an independent chairman is always preferable.

Most EU states could afford large bank recaps

12 Oct 2011

If the lenders stress-tested in July faced realistic sovereign debt haircuts and a minimum 7 percent core Tier 1 capital ratio, they’d need 93 billion euros. That’s less than 1 percent of Europe’s GDP. It’s a reminder that the barriers to action are more political than economic.

Outage hastens BlackBerry’s slide into irrelevance

12 Oct 2011

A three-day global disruption has left users of the handheld gadget struggling to access email. The growth of other mobile devices and tablets means it’s less of a hassle than it once might have been. It may also persuade customers to dump their BlackBerries for good.

Euro zone won’t be saved by multi-point plans

12 Oct 2011

It may be fun to draw up lists of financial and legal tricks which could ensure bank solvency, restore investor confidence and manage or avoid sovereign defaults. But only one thing matters: the political will to preserve the single currency. The devil is not in the details.

Euro bailout fund may endanger Slovak stability

12 Oct 2011

The demand for Slovakia to devote more than 10 pct of its GDP to the EFSF brought down its government. That may let in the left, who ran up big deficits and foolishly revalued the currency before joining the euro. Clumsy EU crisis solutions may end up toppling innocent dominoes.

Russia and China close but not yet allies

12 Oct 2011

Putin’s visit to Beijing highlights the deepening co-operation between the two giants. But they remain worlds apart on big issues, and trade between them is small. Apparent agreement on issues like U.S. policy and Syria shouldn’t worry the world just yet.

Qatar still hasn’t found gold in Credit Suisse

12 Oct 2011

Credit Suisse’s preferred advisor status to the Gulf country is a source of envy, as Qatar prowls for assets in a period of M&A dearth. So far the relationship doesn’t seem to have suffered from Qatar’s 2008 investment in the bank, which proved to be a mixed blessing.

Vietnam could use capitalist pep talk from Merkel

12 Oct 2011

The German chancellor’s trip to Hanoi may bring tough questions on the capitalist model. Vietnam grew rapidly by opening to trade 25 years ago, but Europe’s woes are causing pressure on reserves and capital flight. It shows how the euro crisis is a developing world problem, too.

EFSF’s rising costs a warning sign for Europe

11 Oct 2011

Politicians are pinning their hopes on the European Financial Stability Facility to help recapitalise banks and support Italy. However, investors are already demanding wider spreads to buy the bailout fund’s debt. This could make the euro zone’s rescue plan harder to pull off.

Private bondholders won’t make the IMF better

11 Oct 2011

Proposals to let the IMF tap private investors by issuing bonds look desperate. It could use extra cash to aid the euro crisis, but new funding might delay restructuring. It could also give the fund too much firepower and risk leaving it beholden to fickle market sentiment.

Spanish bank mergers off to inauspicious start

11 Oct 2011

Banco Popular is paying a steep price for rival Banco Pastor. The 1.3 bln euro deal doesn’t lift the mid-sized lender into the big league and does little to strengthen its balance sheet. It’s a reminder that while more consolidation is inevitable, not all investors will benefit.

Europe’s banks suffer collective action headache

11 Oct 2011

EU lenders are resisting calls to boost their capital ratios. While all banks would benefit from a stronger financial system, none want to bear the cost. Decisive European governments could overcome this problem. However, they are affected by the same dilemma.

Glencore resilience brings Xstrata deal closer

11 Oct 2011

Mining M&A’s clearest fantasy deal has inched closer to reality. A Glencore takeover of its $43 bln mining affiliate looks easier after the commodity trader’s shares held up better in the recent rout. But Xstrata investors are unlikely to roll over without a substantial premium.

Oil trader, stock investor variance is opportunity

10 Oct 2011

Economic fear has taken a heavier toll on U.S. oil company shares than on crude itself. Either there are bargains among the stocks of oil explorers, or commodity investors are too bullish. The difference of opinion ought to mean there’s room to make money.

French socialists tempted to move backwards

10 Oct 2011

Voters in the first round primary of France’s main opposition party gave former labour minister Martine Aubry a surprising strong second place behind centrist Francois Hollande. The party faithful may be tempted by her old-style ideology. That’s exactly what France doesn’t need.

Wall Street dealmakers get trampled by PIIGS

10 Oct 2011

The fear and uncertainty over Europe has sent the cost of U.S. credit skyward. By one closely watched gauge, junk bonds are yielding almost five percentage points more than they reasonably should. Given the bureaucratic dithering, bankers and buyout barons may be idle for a while.

Poland must cut now to cope with Crisis II

10 Oct 2011

The government’s re-election reflects Poland’s success in handling the 2008 crisis. But the euro zone sequel will be harder. Poland got by last time by letting its deficit and debt rise. Now it must cut them. The zloty, Swiss mortgages and foreign-owned banks are vulnerabilities.

Sarkozy’s short-termism driven by triple-A fears

10 Oct 2011

The French president’s stances on restructuring Dexia and recapitalising euro zone banks are driven by the obsessive fear of losing the nation’s top rating. The risk is that this might precipitate short-term fixes, which would make a downgrade even more likely.

Dexia rescue riskier than it looks for Belgium

10 Oct 2011

After a weekend of wrangling, Belgium is to nationalise the domestic arm of the Franco-Belgian bank. The direct cost will only be about 1 pct of GDP. But lots of loose ends remain around Dexia’s funding guarantees and solvency. The true cost may end up being a lot higher.

Bail-ins can’t always be postponed to next crisis

10 Oct 2011

After the 2008 crisis, regulators promised that bondholders would suffer haircuts when banks next needed recaps. But governments are so scared of contagion that EU taxpayers will have to pick up the tab again, witness Dexia, unless some key protections are put in place rapidly.