EMEA

Bailout-free banking may be unattainable goal

18 Oct 2011

Policymakers want to stop taxpayers rescuing banks. That is the aim of the UK’s Vickers report. But regulators will still fret about letting lenders fail in a future crisis. Meanwhile, Vickers’ plan could perversely increase pressure on the state to direct lending.

Markets’ "euro bazooka" rally can’t be trusted

17 Oct 2011

Stocks, commodities and the euro have rebounded from the brink of a bear market. The fundamental hope is for a comprehensive solution to the euro zone’s problems. Investors have added to the bounce by covering short positions. But the risk of European disappointment remains high.

BP’s spill woes start to clear, but not disappear

17 Oct 2011

The $4 bln settlement with Anadarko is good news for the UK-based oil major. It may be a fraction of the $41 billion estimated cost of the spill. But with the co-owners of the infamous Gulf of Mexico well on side, BP can focus on the big-picture damages claims.

Market sends CEOs harsh message on M&A

17 Oct 2011

Investors have blown a raspberry at G4S’s $8 bln bid for ISS and related $3 bln rights issue. Europe’s first big corporate transaction since the summer was never going to be easy, and the cash-call is massive. If G4S stock doesn’t recover, opportunistic M&A will be cowed.

UK listing hands credit to Russia’s steely Evraz

17 Oct 2011

Another Russian minerals company is heading for the UK’s FTSE 100. Commodity worries and the involvement of Roman Abramovich means investors will approach with caution. But the company’s size, diversity and exposure to infrastructure spending tempers doubts about Evraz.

Rio Tinto takes bold step into aluminium rehab

17 Oct 2011

The miner’s $38 billion purchase of Alcan in 2007 was a financial disaster, and aluminium’s prospects still look poor. Rio is making some amends with a plan to sell off a third of the business. The strategy is sensible and now looks as good a time as ever to sell.

Dubai forced to re-embrace the suitcase banker

17 Oct 2011

Bankers are leaving the Gulf as foreign institutions return to pre-boom business models, flying in top advisers only when they are needed. With Middle East investment banking fees below 2005 levels, it’s a necessary shift. But for some banks, it may also be a sign of retreat.

IPO shut-down allows strategic bidder to clean up

17 Oct 2011

Private equity is offloading Danish outsourcer ISS to London-listed rival G4S for $8.2 bln – the same value it sought in March’s aborted IPO. So far, so good. But with the IPO market now shut, G4S has got away with paying partly in stock, and has avoided paying a massive premium.

No easy fix for Telenor’s India joint-venture spat

17 Oct 2011

Uninor, a joint venture between Telenor and Unitech, needs cash. Telenor wants to raise $1.8 billion of equity but its partner has resisted, instead taking the case to court. Whether Unitech wins or not, it’s hard to see how Uninor can avoid having to bring down its heavy debts.

Deutsche may not escape state grip in forced recap

14 Oct 2011

The German lender could need 9 bln euros to pass Europe’s latest stress test. If the government puts up the cash, it could own a large chunk of the bank. But even if Deutsche sells businesses, places shares and cuts its dividend, it will struggle to raise the capital privately.

Portugal hangs in the balance

14 Oct 2011

After years of lax management and slow growth, the debt and deficit numbers are intimidating for any government in Lisbon, but the current one is determined to avoid a restructuring. With a bit of economic luck - and some patience from investors - it might manage to pull through.

Credit Suisse has awkward role in Nat’s coal deal

14 Oct 2011

The bank is broker to Nat Rothschild’s mining vehicle, Bumi Plc, and lender and sometime adviser to his partners, Indonesia’s powerful Bakrie family. That’s a tricky position now the Bakries are scrambling to meet a margin call on a $1.3 bln loan - arranged by Credit Suisse.

Dow Jones doesn’t need scandal-by-association

13 Oct 2011

The Wall Street Journal Europe’s publisher quit just before a report of controversial deals to boost circulation. The full facts aren’t clear, and such practices could happen anywhere. But when the parent is scandal-prone News Corp, it’s harder to avoid coming under suspicion.

Berezovsky-Abramovich duel not just about the past

13 Oct 2011

The London court battle between the oligarchs is lifting the lid on Russia’s business methods in the anarchic 1990s. But it is also a telling tale about the country’s business climate today. Property rights will be shaky as long as Russia’s legal system fails to protect them.

EU banks mustn’t shrink their way out of recaps

13 Oct 2011

Some lenders may argue that they can boost their capital ratios by cutting lending or selling assets, and so don’t need to be stuffed with government cash. But this could trigger an even more severe downturn. Governments shouldn’t allow it.

Europe tempted to save Greek trauma for later

13 Oct 2011

Euro zone leaders may be tweaking the Greek debt swap to impose only marginally deeper losses than agreed in July. That won’t secure the country’s solvency, and defers the pain for both banks and Greece’s public creditors. But it keeps the pressure on Athens to reform.

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.