Companies & Funds

Now investors can focus on just how good Apple is

25 Aug 2011

No CEO is as indelibly linked to a company as Steve Jobs. But his unfortunate health issues have been a distraction for yearsll-seeded orchard. Handing over day-to-day operations is still a blow. After the initial shock, though, investors should see more clearly the powerhouse Jobs built.

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.

Glencore share price recovery depends on M&A

25 Aug 2011

The commodity trader’s performance sagged slightly between Q1 and Q2. The business is coasting along, and the latest numbers were free of nasty surprises. But without an opportunistic acquisition, a recovery in the shares - still 25 pct below their issue price - will be a slog.

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.

BofA blues is bottling up U.S. credit

24 Aug 2011

The Fed still wants to keep credit as easy as it can. But worries, rational or not, over Bank of America’s stability are getting in the way. If credit investors continue to fear for the nation’s largest bank by assets, that will outweigh any policy options Ben Bernanke might try.

Aging population another headwind for U.S. stocks

24 Aug 2011

Meager economic growth is one thing. But share valuations could also suffer for a decade or more as retiring baby boomers sell off their equities. It’s one more reason for pension funds, younger savers and investors at large to make sure they aren’t expecting too much.

Man U’s mooted IPO valuation in league of its own

24 Aug 2011

The Glazers bought the soccer club for a hefty 16 times EBITDA in 2005. Now a $1 bln Asian IPO could raise the bar again. Man Utd boasts global cachet and wage discipline by soccer’s crazy standards. But it looks like buyers will have to be fans first and investors second.

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.

America’s too big to fail just keep getting bigger

23 Aug 2011

The FDIC’s latest quarterly roundup suggests, in aggregate, that the U.S. banking industry is recovering. But dig into the details, and it’s pretty clear that massive institutions are continuing to thrive at the expense of the small fry. That’s not necessarily healthy.

BofA shareholders resigned to life on skid row

23 Aug 2011

Fears of a dilutive capital hike may prove overblown. Even so, BofA’s long-running mortgage saga has moved a seemingly endless list of litigants ahead of equity investors in the pecking order. Until the claims are resolved, the stock price looks set to stay in the gutter.

Companies should resist buyback temptation

23 Aug 2011

Share repurchases are creeping back into fashion, and are easier to like when markets are on their knees. But boards have often sanctioned buying programmes that have destroyed value. Share buybacks make more sense in a bear market, but the investment case remains unconvincing.

EU bank funding backstop may need fine tuning

23 Aug 2011

As euro zone liquidity becomes more strained, the European Central Bank’s ability to cover any gaps with an unlimited supply of euros and dollars is vital. Yet that support can backfire if investors spot which banks are getting help. Lessons from the UK could be helpful here.

Next wave of patent rulings could ease tech wars

23 Aug 2011

Google, Apple and others are spending billions on invention rights. But they’re really buying legal protection. That’s because federal judges have approved broadly defined patents, exposing firms to infringement claims. The courts need to sync up the law with the real world.

Regulators have the ideal tool to boost banks

22 Aug 2011

Given the bitter fight to impose new rules, it might seem odd to go easy on banks now. But as markets tumble and economies stutter, the sector must be encouraged to lend. Setting the new “counter-cyclical” capital buffer at a low level could be a clever way to get credit flowing

EU bank shares braced for recession – and worse

18 Aug 2011

The huge sell-off in European bank stocks is partly due to sovereign-related funding fears. But it mainly reflects the hit to earnings that lenders would suffer in another economic downturn. Investors also seem to be pricing in another round of capital injections.

High volatility the price for still unfixed system

18 Aug 2011

The tail-risk fear of a Lehman sequel in the euro zone has whipsawed stocks, bonds and just about every other market. Gloomy data on the U.S. economy didn’t help on Thursday. While policymakers and fundamentals alike offer no conviction, global volatility is set to stay high.

EU banks’ summer funding lull may bring autumn woe

18 Aug 2011

Post-crisis reforms and central bank backstops mean Europe’s lenders are less vulnerable to a short-term funding freeze. But if markets do not reopen in the autumn, or if wholesale borrowing costs remain high, the economic fallout for the euro zone could be nasty

Baidu smear campaign can’t be brushed aside

18 Aug 2011

Critical reports by Chinese state TV have knocked 9 percent off the dotcom giant’s shares. It may be professional envy rather than political conspiracy. Still, the Communist Party’s relationship with the web is fractious. And Baidu’s ownership structure may be an Achilles’ heel.

Sell-off tests hedge funds’ post-crisis resilience

16 Aug 2011

Hedgies have doubtless suffered in the market rout. But painful lessons learned in 2008 have made them more robust in turbulent conditions. Their funding is more secure, and they’ve borrowed less. Still, it’s far from clear their performance merits the high fees.

Split EU regulators weakened by dubious short ban

12 Aug 2011

Without the cover of European unanimity, countries that imposed short-selling curbs have made it look like they have something real to worry about. Bank shares are still gyrating - hardly evidence of a more stable market. Watchdogs risk suffering a hit to credibility.