EMEA

Europe should strive for bank funding backstop

31 Aug 2011

The European Banking Authority wants to free up bank funding markets by enhancing the euro zone’s rescue fund. That could prove politically contentious with member states tired of ever-increasing bailout liabilities. But a debilitating credit crunch would be far worse.

Greek bank M&A shows no mercy on weaker partners

31 Aug 2011

Eurobank EFG is giving less troubled Alpha the lion’s share of the value created by their planned union. The deal leaves Piraeus, the smallest of Greece’s top banks, needing a partner. NBG is the obvious candidate. But Piraeus may, like Eurobank, have to take asymmetric terms.

Qatari Greek bank bailout looks like strategic bet

31 Aug 2011

The 500 mln euro investment by little-known Qatari investment vehicle, Paramount, supporting the merger of Alpha and EFG is opportune. But the emirate might also expect to extract strategic dividends from its support of euro zone troubled banks.  

Market crash compounds Russia’s lack of appeal

30 Aug 2011

Russia’s stock market has been one of the biggest casualties of the global turmoil, again illustrating its extreme sensitivity to risk. Although investors should be poised for an eventual rebound, the latest crash underscores the diminishing allure of Russian stocks. 

Greek bank consolidation escapes Catch-22

29 Aug 2011

Cost-cutting mergers between Greek lenders are essential. Trouble is, they double exposure to sovereign debt. Alpha and EFG may have solved the problem by raising 500 mln euros from Qatar. Combining M&A with new private capital makes sense, but other deals may not come so easily.

Goldman chips away at fixed cost problem

26 Aug 2011

The bank is trimming base pay for some senior UK bankers. The 2009 shift from bonuses to higher fixed comp was a bit slippery, but the move back rightly reinstates pre-crisis flexibility. Rivals should follow but may struggle unless they, too, foresaw the need in the small print.

Abu Dhabi’s Aabar sticks out for the wrong reasons

25 Aug 2011

The state-owned investor has carried on spending as others have been told to cut back. But multi-billion dollar bets on Glencore and Malaysia’s RHB are under water. Aabar’s turn of fortune underscores the fund’s lack of a focused strategy.

Taxing the rich makes economic sense

25 Aug 2011

Western governments want the rich to contribute more to their austerity drives. Financially, it won’t do much to cut deficits and debts. But after three years of economic tension, it is a crucial part of making new rounds of tightening politically acceptable. Pain must be shared.

Finnish bolshiness follows Berlin’s bank coddling

25 Aug 2011

Finland has demanded collateral for its part of Greece’s second bailout. The attitude is divisive, but it highlights the disparity between the treatment of private and public creditors in the July deal. Finland is only asking for what Berlin gave bankers.

Diving bond yields mask investor ambivalence

25 Aug 2011

Fear still trumps greed in the minds of most investors. It allowed the German government to sell 10-year bunds at super-punchy prices on Aug. 24. There may well be enough buyers to push real yields negative. But the investment appetite is far from overwhelming.

UK/Swiss deal good for taxpayers, banks and crooks

25 Aug 2011

Two years ago UK investors with untaxed assets in Swiss bank accounts looked like they would lose their anonymity. Instead, they will now pay almost the full tax rate to the UK, helping it cut its deficit. The Swiss banking model is protected - but dodgy money will remain shielded.

Big oil faces big unknowns in Libya

24 Aug 2011

With Brent crude at more than $100 per barrel, foreign entities have a strong incentive to restart production as soon as security is ensured. But Libya’s new rulers may want to reshuffle the cards. Even once the fighting stops, oil companies should expect a bumpy ride.

No easy fix for Spain’s housing market

22 Aug 2011

The government hopes to jump start the housing market by temporarily cutting the VAT rate on purchases as part of a package to shrink the country’s deficit. The move might help a bit. But buyers won’t return until job creation resumes, and banks recognise more property losses.

End game in Libya could herald oil slump

22 Aug 2011

The rebel push into Tripoli came sooner than expected. Libyan oil exports should follow suit. The possibility of regional unrest remains. But global growth concerns, and IEA and Saudi moves to make up for the disruption, could turn tight markets into oversupplied ones.

HP stock sell-off looks like overkill

19 Aug 2011

The tech giant has seen about a quarter of its market value, almost $16 bln, vaporized in two days. Shareholders have fled following another profit warning, a huge and pricey acquisition deal, and a strategic U-turn. That makes for plenty of warts - but HP now looks too cheap.

Rivals unlikely to crash HP’s punchy Autonomy deal

19 Aug 2011

Autonomy would be a nice-to-have for Oracle or IBM. But Hewlett-Packard’s $11.7 bln offer for the UK software group is already rich, and rivals don’t need Autonomy quite so badly. Add in falling markets and the ugly reaction of HP shares, and a bidding war doesn’t compute.

Finnish favouritism could unravel Greek rescue

19 Aug 2011

Greece’s bailout allows Finland to secure its loans with cash. Now other member states want the same deal, which would undermine the whole exercise. With either the rescue package or euro zone unity at stake, the EU’s biggest players may have to knock some heads together.

UK should avoid handwringing over Autonomy sale

19 Aug 2011

It could have been Britain’s Google, say those who mourn the Cambridge software firm’s sale to HP. Maybe. But Autonomy’s founder has a right to an exit, while public companies have a duty to accept rich takeover bids. Its success is still an inspiration to would-be entrepreneurs.

HP says goodbye Compaq, hello IBM

19 Aug 2011

The U.S. tech giant may spin off its PC unit and stop making some mobile devices. It has also offered to buy UK data search software group Autonomy for $10 bln. Leaving the cutthroat hardware market for higher margin software can work, as IBM shows. But it won’t be quick or easy.

How to break Europe’s bank-sovereign "doom loop"

19 Aug 2011

The crisis of 2008 is repeating itself in reverse. Instead of saving the banks, European governments are now dragging them down. That threatens another credit crunch. Severing the link between states and lenders is essential to restoring calm. Here’s how it can be done.