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Blog Profile / Reuters Breakingviews Blog


URL :http://blogs.reuters.com/columns
Filed Under:News
Posts on Regator:3219
Posts / Week:17
Archived Since:June 19, 2011

Blog Post Archive

M&A “clear day” defenses can cloud investor rights

Anti-takeover protections adopted before threats arise are more apt to weather legal scrutiny. It’s one reason Allergan was able to resist Valeant’s $52 bln bid. When triggered reactively, they’re considered unfair surprises. Either way, shareholders often get unneeded cover.

Europe could edge past U.S. in race to courthouse

New rules and bank scandals boost financial fraud and class-action filings in Britain. Patent combatants flock to German judges. And spats over failed investments clog EU courts. The upshot: a lawsuit boom that may topple America as the world’s business litigation capital.

Russia’s foreign banks have varying pain barriers

With the Russian banking system hobbled by sanctions, Raiffeisen, UniCredit and SocGen are well placed to grab market share in commercial lending. The vital factor will be how insulated they are against the current turmoil. Some look better placed to tough it out than others.

Chinese companies will mostly stay at home in 2015

Even with a slowing economy the People’s Republic offers lots of growth for home-grown corporations. Hostile regulators, stronger rivals, and cultural differences discourage foreign expansion. Though some will take the plunge anyway, in most cases overseas growth can wait.

SpiceJet rescue is no fix for India aviation woes

The government is cajoling banks to lend to the indebted airline, which really needs more equity. The lifeline just might prevent a repeat of Kingfisher’s high-profile failure. But high fuel taxes and the lack of a bankruptcy law will keep the industry stuck in an air pocket.

This is as good as global recovery gets

Since 2009, each new calendar year has brought declarations of the end of the crisis and predictions of an economic upswing. This time the mood is gloomy, and with reason. Weak growth turns out to be the new normal, not part of the transition.

Jefferies closes annus horribilis on wicked downer

The Wall Street firm racked up a $93 mln fiscal Q4 loss. Boss Richard Handler says a senior banker’s messy public divorce had no material effect. Poor trading, a bum acquisition and one big bad debt took their toll. It’s a damaging concoction that should be limited to Jefferies.

European telecoms will dial up more deals

Investors have brightened as M&A has swept the sector. Thanks to BT, Britain is up next. More mergers could follow in France, Italy and Belgium. What’s not to like? Well, windfalls from big cross-border deals looks distant and valuations already price in most of the good news.

EU insurers’ solvency is shakier than it looks

A quarter of Europe’s insurers would fail to meet a basic gauge of capital health if Japan-style low-yield conditions were to persist, recent stress tests found. But actual euro zone yields are even lower. With the bloc on the brink of deflation, that’s not a reassuring sign.

Solar upstarts and utilities head for uneasy truce

The soaring popularity of solar panels in the U.S. cuts carbon emissions but upsets utilities trying to make a return on grid investments. The industry’s attempts to slap fees on solar users sparked uproar in 2014. A new cost-sharing approach may take the heat out of the debate.

Rouble free fall throws Russia into ugly spiral

The Russian currency kept falling after the central bank hiked its key rate from 10.5 pct to 17 pct, leaving policymakers with few sensible short-term options. Further out, only higher oil prices and an end to the Ukrainian stand-off can soothe markets. That’s unlikely to happen soon.

Xiaomi founder weaves a tangled web of investments

A $32 mln fund backed by the Chinese smartphone maker gives an insight into the mysterious empire of founder Lei Jun. His four listed companies and Xiaomi trade and invest closely together. If Xiaomi has plans for a stock market listing, more simplicity might be useful.

Uber’s law flouting could bring joyride to a halt

The taxi app company is covering drivers’ fines for illegal pick-ups. That may be just another business expense to a firm that earned a $40 bln valuation by moving quickly and breaking the rules. But the legal, lobbying and PR costs of reckless behavior are accelerating fast.

Abe wins election, but wage trial will be tougher

The ruling party’s solid election victory has renewed the Japanese prime minister’s mandate to lift wages and end deflation. Pay hikes now depend on better productivity, or the promise of it. That will not materialize quickly.

Goldman updates IPOs for the Candy Crush era

CEOs of firms heading for public markets are hooked on the bank’s app, which enables them to track results of roadshow book-building in real time. With Apple and IBM coding mobile software for big companies, the smartphone economy is swiftly moving from living room to boardroom.

Binding Staples to Office Depot only easy on paper

Activist Starboard may push for a $13 bln merger of the last two big U.S. office supply chains. Cost cuts enable Staples to pay a big premium and still generate good returns. Regulators might object, though, and too much debt is a risk with competition from Amazon and Wal-Mart.

Review: “Forgotten Depression” worth remembering

James Grant’s new book on the U.S. government’s response to the 1921 crash is a timely reminder that our forebears knew of other, apparently more efficacious, remedies to cure financial hangovers than the hair of the dog.

Protests made Hong Kong more hopeful, less certain

The 75-day occupation is over, but the democracy movement remains strong. The student-led protests have polarised politics, exposed economic inequality, and challenged Chinese rule. That makes Hong Kong’s future harder for businesses and investors to predict.

More Porsche than Prada: Why Ferrari’s worth $7bln

Fiat will float the iconic sports car brand in 2015 and wants investors to see it as a luxury goods company rather than a carmaker. That’s a stretch. Building Ferraris takes more capital and R&D than handbags and shoes. Margins - and multiples - are lower for a reason.

Overreaching enforcers redraw insider trading line

A U.S. court tossed convictions of two hedge fund managers, sharply narrowing the law on improper dealings. Prosecutors should expect more embarrassing reversals. The silver lining is that the ruling gives Wall Street clarity on what’s forbidden and should curb government excesses.

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