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Market sirens lead China astray

28 Jul 2015

Regulators say they will keep supporting stocks. That unwise pledge is the high price of being a financial free rider. Like many governments, China’s authorities found the easy gains from a rising market irresistible, and have ended up its slaves.

UBS payout potential gives it an edge over peers

27 Jul 2015

The Swiss bank snuck out early, estimate-beating earnings of $1.25 bln in the second quarter. Its two main businesses did well, and capital buffers swelled. That, plus a tax asset revaluation, makes UBS one of the few European banks likely to pay a decent full-year dividend.

China worries start now for Visa and MasterCard

27 Jul 2015

The People’s Republic will open its $7 trln bank card payment market to outsiders. Yet Visa and MasterCard, whose shares have risen since the decision, face an entrenched incumbent and online rivals like Alibaba. The hype from getting market access looks premature.

After FT, Pearson’s challenge is existential

24 Jul 2015

The Pink ’Un contributed 3.3 pct of the UK company’s adjusted operating profit last year. North America pumped in 64 percent. With the FT sold, Pearson will focus on education. It may work better as a U.S. company, or in other hands. It could sell itself, as a whole or in parts. 

Rob Cox: FT is to Nikkei as Jim Beam is to Suntory

24 Jul 2015

Outside Japan, the $1.3 bln purchase of the salmon-hued newspaper is hard to fathom. The finances may never stack up. From a Japanese perspective, the calculus is different. In a shrinking market, without a product that travels internationally, deals like this are existential.

Financial logic in $1.3 bln FT buy is paper thin

23 Jul 2015

Japanese media group Nikkei is taking a bold step with its purchase of the Financial Times. The price equates to 35 times adjusted operating income. Sure, Nikkei gets a bucketload of kudos. But the tag is around three times higher than the multiple enjoyed by quoted media peers.

Credit Suisse clears path to Thiam’s shake-up

23 Jul 2015

The Swiss bank did well in wealth management and Asia, where new CEO Tidjane Thiam is likely to focus. The investment bank, which may need further pruning, is holding up. The good vibes will help investors feel better about a looming strategic revamp – and a potential cash call.

South Korea might need stronger medicine than QE

23 Jul 2015

The slowest quarterly GDP growth in six years points to a malaise deeper than a virus outbreak. A weaker currency can help with faltering exports, but it won’t free households from a debt trap. A bold cocktail of tax breaks, rebates and money-printing might be more effective.

Apple has time on its side

21 Jul 2015

The iPhone’s frenetic Chinese growth powered a 33 pct rise in revenue. Marginally softened forecasts for the next few months nevertheless knocked $50 bln off Apple’s value. Minimal information about Watch sales also disappointed. A little patience, however, will go a long way.

Investors are too bullish on $7 bln drinks-can bid

21 Jul 2015

Europe’s trustbuster is looking hard at the planned takeover of UK-based Rexam by Ball of the U.S. That’s unsurprising. The new entity would control around two-thirds of key markets. A deal may yet go through. Still, Rexam shares over-egg the chances of success.   

Shouldn’t Credit Suisse and StanChart swap CEOs?

20 Jul 2015

Bill Winters is beginning his tenure as new boss of the emerging markets lender at the same time that Tidjane Thiam takes charge of the Swiss investment and private bank. Both are capable executives, but their experiences seem uncannily to better suit the other’s job.

Bafin barbs show scale of Deutsche overhaul task

17 Jul 2015

A leaked letter from the German bank’s lead regulator slams executives for incompetence - or worse - over Libor. New CEO John Cryan needs to repair relations. Improving controls and recruiting new managers complicate the already-sizeable job of boosting Deutsche’s performance.

Chinese tourists leave luxury brands flat-footed

17 Jul 2015

Burberry is the latest label to discover the cost of tracking China’s globetrotters. Hong Kong is losing its appeal as a shopping mecca for mainlanders, leaving brands with spare stores and profit-busting rents. Following luxury’s most prized customers calls for nimbleness.

China’s rout may disrupt online finance pioneers

16 Jul 2015

Regulators have targeted Hundsun, an $8 bln trading-tech firm backed by Alibaba founder Jack Ma, over the market crash. Internet finance in China flourished in legal grey areas. If official attitudes are hardening, it will be riskier and pricier for Ma and peers to innovate.

China GDP surprise leaves central bank on the hook

15 Jul 2015

Quarterly growth hit a surprisingly strong 7 pct and the bean-counters say expansion is “ready to pick up.” That’s too hopeful given stubborn disinflation and other signs of wariness among companies and consumers. Stock markets have rebounded, but interest rates must still fall.

Iran nuclear deal is huge potential step forward

14 Jul 2015

The hope is that the 100-page agreement will help keep oil cheap, spur rapid growth in the Iranian economy and lead to less fighting in the Middle East. But sanctions can be revived quickly if things don’t go to plan. Mistrust remains endemic. Optimists will have to be patient.

Greek bank salvation may still have sting in tail

13 Jul 2015

Greece’s lenders are getting another 25 billion euros in bailout recap money. With a deal in place, more ECB crisis loans should also materialise. But the central bank may not provide them today, and a new Greek bail-in regime raises uncertainty for depositors.  

Tsipras U-turn only lowers short-term Grexit risks

10 Jul 2015

Greece’s latest bailout plan accepts most of what its July 5 referendum rejected. Creditors will have to actively want a Greek exit from the single currency for it to happen now. Yet fresh austerity, capital controls and Athens’ weak reform record mean the truce may not last.

Barclays investment bank is hardest to turn round

9 Jul 2015

The UK lender, Credit Suisse and Deutsche Bank have all changed chief executives this July. Each has a distinct investment banking challenge. The Swiss bank is capital-light, Deutsche needs to cut costs. Yet Barclays’ shrinking top line suggests its revamp will be the toughest.

Barclays CEO vacancy will be a headache to fill

8 Jul 2015

Antony Jenkins has paid the price for weak investment bank returns and tactical missteps. Chairman John McFarlane can hold the fort. But a permanent replacement has to inspire a wary workforce and pull off a tricky revamp – just as UK ring-fencing rules make it all much harder.