EMEA

Run of economic bad news could be about to pause

3 Oct 2011

If Friday’s U.S. jobs report follows a recent mini-trend, it will be time to revise economic expectations upwards, once more. But a downward turn will follow soon, unless global financial tensions ease durably. For rich countries, this “lesser depression” may have years to run.

UK reaches for wrong levers on growth

3 Oct 2011

George Osborne is under pressure to bolster UK growth by amending deficit-cutting Plan A. But the finance minister’s idea of further “credit easing” sees him cross the line into monetary territory. He would do better to adjust fiscal policy without compromising austerity.

U.S. refuge for equities comes at quite a price

3 Oct 2011

In stock markets, correlations are about the only thing going up. But while U.S. and EU equity indexes are moving in the same direction on more trading days, European shares have also slumped to a 20 pct discount to U.S. peers. That may overstate the security offered stateside.

Dexia rescue would need more than just capital

3 Oct 2011

The Franco-Belgian bank’s shares have slumped amid fears it needs a second bailout in three years. Helping Dexia cope with a big haircut to its Greek debt is the first challenge. But any package also needs to tackle its reliance on short-term funding, and its unwieldy structure.

Greece can escape death spiral

3 Oct 2011

Athens will miss this year’s budget deficit targets, thanks to global weakness and domestic austerity. Foreign creditors will call for harsher reforms. That makes economic sense, but Greek politics are tough. A larger debt restructuring may be required to turn the country around.

Qatar steals $1 bln march on European Goldfields

3 Oct 2011

The Gulf country is hungry for exposure to gold. Its offer to finance a Greek mining project will secure it at least 27 pct of the Canadian group at a snip of its mooted July valuation. But in current markets, investors will have to think hard before turning away the Qataris.

It’s FTSE or bust for Russian miners in London

30 Sep 2011

Polymetal has become the latest to seek a full premium listing in London. The precious metals miner is upping its free float to get into the FTSE 100, expanding the universe of investors and boosting liquidity. It’s a reminder that the attractions of just listing GDRs are fading.

Euro zone-only Tobin tax could make sense

30 Sep 2011

Prompted by France and Germany, the European Commission has proposed a tax on financial transactions. It would be more efficient if it were implemented globally. But even limited to the EU or the euro zone, its benefits could outweigh the risks.

LSE-SGX move on metals exchange would make sense

30 Sep 2011

Joint bids tend to be hard. But the London and Singapore bourses may benefit by partnering in a possible $1.6 bln bid for London’s metals exchange. LSE gets a partner that already handles metals futures; SGX gets local know-how. That matters in a potentially hot auction.

Cyprus might wind up with two foreign bailouts

30 Sep 2011

The island state could soon get cheap loans from Russia, whose citizens hold large Cypriot bank deposits. That would help Cyprus’ anaemic economy recover from an explosion in July at its main power plant. But if Greece defaults, its banks may need a euro zone bailout too.

BBC ersatz trader has serious markets message

29 Sep 2011

A clip of a trader admitting to dreaming of financial doom as a money spinner has spread like wildfire. The Gordon Gekko wannabe doesn’t work on Wall St but his vulgar amorality offers a description of trading that strikes a chord with a public still smoldering over bailouts.

France and Italy sitting on share sale goldmine

29 Sep 2011

The halting of Spain’s giant lotto IPO doesn’t change the logic of further asset sales by euro zone members with high debt. It’s not just the peripheral countries. France alone could plausibly raise $50 bln from trimming its holdings.

ECB treats Berlusconi like little boy

29 Sep 2011

A letter from Trichet and Draghi in August told Italy’s PM how to run his economy, setting an end-September deadline. The implied carrot was that the ECB would buy Italian bonds. Given that Berlusconi hasn’t done all he was told to, it’s no surprise that bond-buying has dropped off.

Spain’s biggest IPO runs out of luck

29 Sep 2011

The 7 bln euro Loterias IPO has been abruptly pulled. Market conditions were tough, but political pressure and liquidity-starved banks may have dealt decisive blows. Though the cancellation will have a modest impact on state finances, it will reverberate. And it is shambolic.

Currency crossfire to hit emerging economies hard

29 Sep 2011

Money is flowing out of emerging economies. Countries that had complained about currency appreciation have had to prop up forex rates. Turkey and South Korea are vulnerable to hot money retreat. Poland and Hungary are caught in currency traps.

UK bank reform shouldn’t forget living wills

29 Sep 2011

Ring-fencing retail banks, as the Vickers commission has proposed, may help tackle the “too big to fail” problem a bit. But resolution plans are a more important way of safely winding banks down. If Vickers’ focus diverts attention from this, it could be harmful.

Shell, Total have little to lose staying in Syria

28 Sep 2011

The two oil majors are still pumping in Syria, in effect helping to finance the deadly crackdown on anti-government protesters. But while both companies could easily afford to make a moral point and pre-emptively withdraw from their investments, doing so might not achieve much.

Europe’s political left needs aggiornamento

28 Sep 2011

Financial crisis, government austerity and slow growth should be good news to the political left, which is out of power in the four largest European economies. But it hasn’t found plausible popular alternatives or benefited from the conservatives’ woes.

Gazprom raids escalate EU-Russia energy war

28 Sep 2011

An anti-trust investigation into the Russian gas giant’s European subsidiaries should be seen in the context of a wider diplomatic conflict. Moscow is obstructing the EU’s plans to import Caspian gas. It looks like the EU has found a way to retaliate. The row could worsen.

Machines beat humans as Man Group stumbles

28 Sep 2011

The world’s largest listed hedge fund saw its assets shrink 8.5 percent in the current quarter, sending its shares tumbling. While its computer-driven trading fund is recovering, star managers have struggled. It’s a reminder that in volatile markets, fat fees are hard to justify.