EMEA

Qatar risks a foreign investment pile-up

19 Sep 2011

The gas-rich state might have around $100 bln to throw at foreign assets, based on guesses at the size of its sovereign fund. A 7.5 pct stake in Franco-German EADS would cost less than $2 bln. But Qatar’s overseas spending doesn’t look as focused as its domestic growth ambitions.

UniCredit’s capital options lie eastwards

19 Sep 2011

Since missing the boat on capital raising earlier this year, sovereign concerns have smashed the Italian bank’s share price. Underwriters may only back a rights issue if the euro zone crisis eases. The best option might be to find a deep-pocketed Middle Eastern investor.

Five questions the UBS investigations must answer

19 Sep 2011

The $2.3 bln rogue trading scandal raises questions about the Swiss bank’s cash management, internal controls, and supervision of its traders. It also points to structural flaws in the market for exchange-traded funds. Here’s what investigators and regulators should focus on.

Repsol is wrong to get heavy with activists

16 Sep 2011

The Spanish oil giant is angry at a new shareholder pact between construction firm Sacyr and Mexican energy group Pemex. The activists’ interests may conflict with those of other shareholders. But their immediate demands make some sense, and a big battle benefits no one.

Germany sends hopeful signals on euro future

16 Sep 2011

Berlin’s attitude towards the euro zone has become more positive, and less inconsistent, in recent weeks. Its partners should welcome the change and be encouraged. Germany, however, is still to fully appreciate that austerity for all will mean recession for everyone.

How could UBS not have learnt from SocGen?

15 Sep 2011

Unauthorised trades that cost the Swiss bank $2 bln took place in the same area that spawned a $7 bln fraud at SocGen in 2008. “Delta One” is meant to be a low-risk client-focused unit. One theory is that related arbitrage trades went awry. Right or wrong, it’s still baffling.

Egypt’s clash with Israel puts investors on guard

15 Sep 2011

The attack on the Israeli embassy in Cairo underscores the dislocation between youth and ruling military. U.S. funding for the army is tied to the peace treaty. But the army’s future role is unknown. The latest row adds to the growing list of foreign investors’ worries.

Prokhorov pays the price for irking Kremlin

15 Sep 2011

Three months after launching his political career, Russian tycoon Mikhail Prokhorov has been forced out as the leader of a pro-business party. Even the tame oligarch was too independent for the Kremlin, belying hopes that President Medvedev can or will hasten political reform.

Rogue trader puts UBS investment bank at risk

15 Sep 2011

The source of unauthorised trades that triggered a $2 bln loss is unclear. But the bombshell is a blow to the Swiss lender’s claim that its de-risked trading business poses no threat to its private bank. Though UBS can weather the financial hit, a break-up is back on the agenda.

UK, ECB spat highlights derivatives arms race

15 Sep 2011

The UK says the ECB’s policy on central clearing breaks EU law. The ECB’s requirement that euro-denominated products be cleared in the euro zone may be as much control-freakery as realpolitik, but London has reason to fear it could damage the City’s grip on derivatives dealing.

Iraq’s oil ambition looks fragile

15 Sep 2011

The oil-rich country is on the verge of lowering its official output targets and exports have been disrupted. Infrastructure is a major problem. But the politics at home and away mean Iraq’s path to becoming a global oil giant again is set to get longer and tougher.

UK bank reform will accelerate funding pain

14 Sep 2011

Britain’s banking commission wants big lenders to hold extra buffers of debt that can be written down in a crisis, and for depositors to be repaid before other creditors. UK bank funding costs will rise. But the hit should be manageable - as long as other countries follow suit.

UK will get QE2 – but may need fiscal help too

14 Sep 2011

Britain’s growth problems are being made still worse by euro zone crisis. The case for a second round of money printing is likely to convince the Bank of England this winter. The question is whether unconventional monetary policy will be enough to ward off recession.

BNP steps into leaner future with asset sale plan

14 Sep 2011

BNP Paribas is offloading 10 percent of its risk-weighted assets. The euro zone’s largest bank may be strong enough to withstand further write-downs. But this summer’s U.S. funding market strains and market sell-off show it must do more to protect itself.

Italian mega-tax would be game-changer

13 Sep 2011

Alessandro Profumo, the former UniCredit boss, suggests a one-off wealth tax of 400 billion euros. This would solve Italy’s debt problem, but could also reverse the euro crisis. Italians are wealthy enough to afford it. But Silvio Berlusconi would first need to be turfed out.

Greece’s austerity cure can’t go on forever

13 Sep 2011

A last-minute property tax could help Athens secure its next bailout tranche, averting a crisis. But it may not defer default for long. The option is no longer taboo, and Greek austerity is hitting a wall. The fear of contagion may postpone a restructuring, but only for so long.

Spain’s giant lotto IPO pushes its luck

13 Sep 2011

The part privatisation of Spain’s lottery couldn’t be more different to recent savings bank flotations. It’s defensive and throws off cash. But Madrid is hoping to see a jackpot of up to 7.5 bln euros. Even with so much in its favour, the deal will be lucky to raise that much.

Lloyds looks like big winner from UK bank shake-up

12 Sep 2011

The lender was at risk of bearing the brunt of the report by Britain’s banks commission. But it has escaped the need to sell more branches, while a widely-drawn “ring-fence” should limit the impact on earnings. By contrast, RBS and Barclays may face an investment banking squeeze.

Greek default wouldn’t mean quitting euro

12 Sep 2011

A default is both likely and desirable, provided it is orderly. Bringing back the Drachma is neither. Not only would it be bad for Greece, but it would signal a major row within the euro zone, and trigger a more virulent phase of its debt crisis.

French bank meltdown begs for government action

12 Sep 2011

SocGen’s plan to dump assets and staff to soothe investors’ concerns couldn’t prevent a meltdown of French banking shares. The government says talk of nationalisation is “premature”. But with another downgrade looming, it might have to step in to avoid a panic.