Companies & Funds

BofA boss can take comfort from Pandit’s bad patch

12 Sep 2011

Brian Moynihan gets knocked for everything from his fixes for the ailing bank to a lack of charisma - as his rival atop Citi did a couple of years ago. Pandit pulled through. That, and middling shareholder support for his latest plans, should give Moynihan a modicum of hope.

Forget the IPO, Facebook could reverse into Yahoo

12 Sep 2011

Offering Facebook shares to Yahoo owners sounds downright barmy. But Yahoo’s core is just a bunch of apps with a decent display ad business that belong in a social network. Facebook has the traffic, vision and possibly management in Sheryl Sandberg to exploit the assets.

Dimon can’t have it both ways

12 Sep 2011

The JPMorgan boss has made good arguments against bad regulation. But suggesting the U.S. should opt out of “anti-American” Basel III rules undermines his case. If huge private sector banks are to avoid future government rescues, they will need to hold more capital.

No quick fix for banks’ U.S. mortgage liability

12 Sep 2011

That’s the grim reality for investors. The entire home-lending chain - origination, servicing and securitization - is under legal fire, with a regulator aiming the latest shot at 17 banks. Settlements will help, but as this primer illustrates, a full ceasefire may be years away.

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.

UK bank commission sticks to its guns

12 Sep 2011

Forcing lenders to ring-fence crucial operations and hold more capital should make the system safer - at a hefty cost to the industry. For banks, delaying implementation to 2019 is some consolation but sorting out the details of the new rules could leave them in limbo for years.

Directors’ dealings give more than inside info

12 Sep 2011

Board-level share trades have long provided useful investment signals. They shed light on anomalies between intrinsic value and the market price of their companies. Directors’ dealings data may also aid diversification away from correlated pan-market price swings.

French banks’ funding flames fuelled by Basel

9 Sep 2011

SocGen and BNP are telling investors their funding is secure, despite the pull-back by U.S. money market funds. But tough Basel liquidity requirements would force them to issue stacks of pricier debt, shrinking returns. Unless the rules are relaxed, the banks’ woes will persist.

Gold spares lagging Paulson after August ructions

8 Sep 2011

The hedgie’s best-known fund is down 23 pct this year, but holders of gold-denominated shares are still just ahead. At Ray Dalio’s giant Bridgewater, investors are up 25 pct even without that help. If nothing else, the contrast underlines the challenge of navigating wild markets.

Dexia sued for rare thing it can’t be blamed

8 Sep 2011

The Belgian-French bank is being sued by some French local authorities after loans pegged to the strong Swiss franc soared in cost. Dexia may escape the blame for what looks a case of caveat borrower. Its real problems are its messy funding, and sovereign debt exposure.

Facebook puts Web 2.0 rivals in appropriate light

7 Sep 2011

Tech companies like Demand Media and Pandora have shown how investors can take a shine to profitless growth. But Groupon’s troubles partly show how fickle such approval can be. Facebook’s fast-growing bottom line is a stark reminder of exactly what’s missing from Silicon Valley.

Goldman Sachs should consider its own breakup

7 Sep 2011

The Wall Street firm helps companies like Kraft boost their shares by splintering into pieces. So it’s logical that some inside Goldman have run the numbers on their employer. Should Goldman’s stock price linger below book value for long, a breakup could be hard to resist.

Uncle Sam can’t play China’s solar subsidy game

7 Sep 2011

The bankruptcy of Solyndra undermines a U.S. loan guarantee scheme that backed $535 mln of the firm’s debt. Going head-to-head against China on solar panel production is pure folly. A wiser use of tax dollars would be to try and leapfrog the Middle Kingdom on research.

Toothless U.S. say-on-pay still biting CEO perks

7 Sep 2011

The SEC’s mandated votes may be non-binding, but they’re no bust. Though shareholders approved almost all executive pay packages in the recent proxy season, many firms preemptively cut golden parachutes to ensure victory. Investors are speaking softly but carrying a big stick.

Rubenstein won’t easily snatch Schwarzman’s crown

7 Sep 2011

The Carlyle and Blackstone private equity powerhouses both manage about $150 bln of assets. But Carlyle has less steady fee income. If investors looking at Carlyle’s new IPO filing value the firm the same way as Blackstone, it would be worth only about $7.5 bln, or half as much.

New Yahoo CEO challenge: to dismantle the beast

7 Sep 2011

Fixing the $16 bln Internet firm is proving tough thanks to its many dysfunctions. Firing Carol Bartz looks a step forward, even if the hapless board did so in characteristically shambolic fashion. A breakup is probably needed, but may be hard with the founders calling the shots.

Moynihan edges toward control – and responsibility

7 Sep 2011

The BofA boss didn’t just inherit Ken Lewis’s mess but also his people. Ousting Sallie Krawcheck and Joe Price to consolidate power partly addresses this. His predecessor’s failings aren’t his fault, but Brian Moynihan will now be more squarely on the hook if he can’t fix them.

James Murdoch stuck in limbo

6 Sep 2011

Serious questions still dog the News Corp exec after the latest UK parliamentary hearings into phone hacking. But challenges from two of his former staff lack decisive proof. Murdoch’s articulate and sure manner, and the fact he’s up second, give him an advantage.

Narrow self interest is equity vigilantism’s flaw

2 Sep 2011

Bond investors have history when it comes to intimidation. To judge by recent performance, their strong-arm tactics can pay off, too. But while it may look tempting, and shareholders must fight hard, the vigilante approach is misplaced.

China small-stock boom puts big banks in the cold

2 Sep 2011

The likes of CICC and Goldman Sachs have dropped off China’s IPO league tables. A shift to second-tier stock markets favours nimbler and smaller underwriters. With Shenzhen’s boards raising twice what the main Shanghai exchange did this year, the big guys must adjust.