Companies & Funds

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.

Morgan Stanley misses a trick on Mack succession

15 Sep 2011

The chairman’s departure isn’t a terrible thing. But adding his duties to CEO James Gorman’s already full slate is unfortunate when investors haven’t fully embraced his strategy. It also frees other banks to unify the roles and legitimizes the status quo at Goldman. Too bad.

Frac Tech’s sellers need a racy valuation in IPO

15 Sep 2011

The U.S. fracking specialist’s debut was delayed in May by a buyout. Now it’s coming back to market. The new owners will want an equity valuation above the $3.5 bln they paid. That may be rich for a firm that, while growing swiftly, remains vulnerable to a supply glut.

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.

Central banks dive in where markets fear to tread

15 Sep 2011

The Fed, ECB and other major central banks will give embattled euro zone lenders a boost by offering longer-term dollars. The move should ease fears of a funding crisis in the money markets. But it mustn’t incite banks to delay the restructuring of their weak funding profiles.

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.

When Frank Quattrone comes calling, buyer beware

14 Sep 2011

The latest coup for the former CSFB ace is persuading Google to bid against itself for Motorola Mobility. Since launching his boutique a few years ago, Quattrone has extracted nearly twice the premium for clients as rival tech bankers. Silicon Valley now has fair warning.

Petrobras should choose its own business partners

14 Sep 2011

Offering 40 pct of a new Brazilian refinery to Venezuela’s state oil group seemed politically smart in March 2008. But PDVSA’s cash is not forthcoming, so Petrobras is on the hook. It has the money, so there’s no big loss - just a warning against deals inspired by Brasilia.

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.

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.

JPMorgan hit may scare more bankers than investors

13 Sep 2011

Shareholders already figured Wall Street profit would take a dive, explaining why they shrugged off a warning from JPMorgan that investment banking revenue would dip by a third or more in Q3. But it lends more weight to industry-wide fears that job cuts will probably keep coming.

GE payback of Buffett reflects climb from crisis

13 Sep 2011

Like clockwork, the industrial giant notified the Sage of Omaha on Tuesday of its intention to buy back the $3 bln of preferred stock he bought at the height of the 2008 panic. Amid widespread market pessimism, it’s a reminder of how much stronger GE and the system have become.

Early start on mobile ads brings hope for Pandora

13 Sep 2011

The Internet radio service is growing by leaps, but giants such as Clear Channel have now entered the fray with similar offerings. That isn’t good for a company still losing money. But being out in front of the trend toward mobile advertising is still an opportunity for Pandora.

Buffett’s new wannabe doesn’t have money problems

13 Sep 2011

He coughed up more than $5 mln just to have lunch with the Berkshire boss twice. That could be as important as his impressive track record as an investor. The Sokol affair proves that good instincts for making money aren’t the only thing Berkshire needs to succeed.

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.

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.