Companies & Funds

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.

Goldman Sachs’s exceptionalism takes another knock

14 Oct 2011

Shares of the Wall Street firm briefly traded at a bigger discount to book value than JPMorgan. That rarely happens and is a worrisome sign that investors fear the firm’s franchise, not just trading but serving clients, has been irrevocably damaged. Goldman is now just ordinary.

RBS’s Scrooge act: more optics than management

14 Oct 2011

The lender controlled by the British government is axing investment bank Christmas parties. Combined with other cost savings, this may head off political rancour ahead of a capital hike. Investment bankers may have few options now, but the hit to morale may have a long-run cost.

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.

Google investors "like" mobile and social results

14 Oct 2011

The Internet giant’s dazzling earnings report, showing adjusted sales up 37 pct, brought an after-hours share price jump. In mobile search, Google is making inroads the numbers don’t yet show, and its social network is gathering steam. But grappling with Facebook will be tough.

China’s biggest insider has poor market timing

14 Oct 2011

Huijin, the state fund that has been buying up bank stocks, isn’t a great role model for investors. It sold in the past when shares were cheap, and has made poor returns on previous dips into the market. No wonder investors don’t seem to be following its lead.

Imagine if Merrill had been smart like Goldman

13 Oct 2011

That’s the basic conceit behind the latest film to emerge in the financial crisis genre, “Margin Call.” Kevin Spacey stars as the head of a desk overloaded with MBS about to blow that his boss forces him to unload to unwitting buyers. It’s simplistic, but eerily familiar.

Jamie Dimon puts brave face on tough quarter

13 Oct 2011

JPMorgan’s boss confronted a triple whammy of falling revenue, lower reserve releases and fallout from his incendiary comments. Dimon made a good stab outlining the benefits of banking. And there are signs of a middling, not reeling, economy. But investors may be less reassured.

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.

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.

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.

China joins ranks of the credibility-impaired

12 Oct 2011

Investors were unmoved by a pledge from Beijing to buy bank shares. In 2008, a similar statement pushed equities up 10 percent in a day. The long global crisis has shown the limited ability of governments to deal with financial tensions. China no longer looks like an exception.

Qatar still hasn’t found gold in Credit Suisse

12 Oct 2011

Credit Suisse’s preferred advisor status to the Gulf country is a source of envy, as Qatar prowls for assets in a period of M&A dearth. So far the relationship doesn’t seem to have suffered from Qatar’s 2008 investment in the bank, which proved to be a mixed blessing.

Alcoa’s miss could belie better earnings surprises

11 Oct 2011

Equity investors are braced for terrible Q3 earnings. On that basis, aluminum giant Alcoa lived up to expectations with the season’s results debut. But there may yet be bigger potential for shares on the upside. Investors appear to have already priced in much of the global gloom.

Patent litigation becoming a vicious circle

11 Oct 2011

Motorola, which Google is buying, is the target of Intellectual Ventures, a patent-holding firm backed by Google. Such tail-chasing is a bad sign for the business of acquiring invention rights and suing for dollars. Innovative pursuits might yield better returns than lawsuits.

Europe’s banks suffer collective action headache

11 Oct 2011

EU lenders are resisting calls to boost their capital ratios. While all banks would benefit from a stronger financial system, none want to bear the cost. Decisive European governments could overcome this problem. However, they are affected by the same dilemma.

HK banks’ yuan strategy looks bad for earnings

11 Oct 2011

Taking deposits in the Chinese currency isn’t the opportunity it first seemed for Hong Kong’s lenders. The business is barely profitable, and migration of savings into yuan has exacerbated a HK dollar shortage, pushing up the cost of deposits and threatening to hurt margins.

Will Wells Fargo get hooked on Wall Street crack?

10 Oct 2011

The California-based lender has mostly resisted lower Manhattan’s siren call. New rules would make it even costlier. But Wells kept Wachovia’s investment bank and is hiring. Ailing Morgan Stanley could even be a good fit. But such temptation can become a debilitating addiction.