Blog Profile / Reuters Breakingviews Blog


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Archived Since:June 19, 2011

Blog Post Archive

Li Ka-shing brings funding finesse to telco M&A

The tycoon may sell 20 pct of his UK mobile unit to outsiders. That could raise 1 bln pounds to help buy Telefonica’s O2, on top of the 3.1 bln pounds sovereign funds are already chipping in. That would let Li to complete the 9 bln pound deal with no fresh investment.

Credit Suisse’s Thiam needs a new new strategy

Boss Tidjane Thiam set out to double pre-tax profit in Asia, and the same in wealth management. China’s slowdown and a money-laundering case show events are overtaking him. Time for a face-saving rethink – or in bank-speak, a strategic acceleration.

Bank IPOs expose dark arts of Chinese finance

The country’s mid-sized lenders have become skilled at repackaging loans to look like less risky investments. Two Hong Kong share offerings underscore how such wizardry has fuelled growth. The practice makes China’s financial system even more interconnected – and more vulnerable.

CBS exit from radio in tune with the times

The $24 bln broadcaster is mulling a sale of its 117 U.S. stations, just as internet service Pandora may be on the block. The moves could make sense, given stiff competition from the likes of Spotify, waning advertising and other industry disruption. The trick is to find buyers.

Market only half buys LSE merger thesis

Investors have priced in the 450 mln euros in annual savings Deutsche Boerse and its rival exchange hope to create by merging – but no more. The two aim to create value from revenue synergies too. If they can’t convince the market, the tie-up looks vulnerable to an interloper.

The bright side of India’s bad-debt witch hunt

Liquor baron Vijay Mallya’s exploits have triggered wider scrutiny of the country’s tycoons and those who enabled their excessive lending. Auditor Grant Thornton is the latest target. Though the sudden frenzy seems arbitrary, the result may be a faster cleanup of balance sheets.

Valeant plays chicken with death spiral

The pharma company’s failure to file audited results has started a countdown to default that vaporized 40 pct of its market value in early trading. Executives are mulling selling assets. But with so many questions about its financials unanswered, Valeant’s outlook is bleak.

Sainsbury can open its wallet wider for Argos

The UK grocer’s like-for-like sales have turned positive, but prices are still falling. A proposed 1.4 bln pound merger with rival Home Retail is a decent coping strategy, if Sainsbury can beat rival bidder Steinhoff. A boost of 10 pct would still just about make financial sense.

Japan index: Modest beginnings for the new year

Our Abenomics Index rose slightly in January compared with the year-end, creeping closer to a 15-year high. Gains in manufacturing production and a slight uptick in loans, consumption and wages helped. But falling stocks and consumer prices were still a drag.

China’s soccer field of dreams lacks paying fans

Tycoons and corporate giants are spending hundreds of millions of dollars on local clubs and foreign players. Media groups are bidding up the value of broadcasting rights. To be viable, though, China’s leagues need to attract lots of paying viewers. That’s hardly an open goal.

Anbang’s U.S. hotel block bookings getting pricey

The Chinese insurer is in a hurry, leading a $13 bln offer for Starwood on top of a $6.5 bln deal to buy Strategic Hotels from Blackstone and its $2 bln purchase of the Waldorf Astoria in 2014. It’s hard to see how they all meet Anbang Chairman Wu Xiaohui’s own financial targets.

Merkel down not out after Super Sunday defeat

Right-wing populists won large gains in three German state elections. Support for Angela Merkel’s coalition is waning. Yet results also show credible and determined mainstream leaders can still woo voters. This may help the chancellor to keep inner-party critics at bay.

Vanke’s white knight is a grey outline

The Chinese developer could sell a stake to Shenzhen’s metro operator in return for assets worth as much as $9 bln. There may be commercial logic to a union that would help Vanke see off a possible hostile suitor. But details are scarce. Shareholder celebrations look premature.

Viewsroom: Sexist boards, fintech flaws, Gutfreund farewell

Gender quotas for directors don't work, a new study finds. And who's policing high-tech lenders and payments firms? Plus: the late Solomon Brothers boss changed Wall Street forever.

China debt swap could leave banks in capital hole

A new rule will allow banks to exchange loans for equity. If used on a large scale it would ease pressure on ailing companies. But lenders would also have to recognize losses, hitting their capital ratios. As the banks’ major shareholder, Beijing will end up footing the bill.

John Gutfreund takes old Wall St model to grave

The ex-Salomon Brothers boss led investment banks from partnerships into prop trading – and ended up in a scandal. His era was, at least, one where bankers’ excesses didn’t put the system at risk. That lends his kind of risk taking a degree of perverse charm that will be missed.

The Exchange podcast: Rise of shareholder activism

Hedge fund manager Jeff Gramm pops over to Times Square to discuss his new book, "Dear Chairman," which chronicles eight decades of pushy investing from Benjamin Graham and Warren Buffett to Carl Icahn and Dan Loeb, and what this history means for markets now and in the future.

Draghi pulls a risky rabbit out of his hat

The ECB chief cut rates, said non-bank corporate bonds could qualify for a larger asset buying programme, and flagged new long-term loans. The good news is Mario Draghi is willing to go the extra mile. The bad: he may encourage excessive risk-taking without lifting inflation.

China’s shadow-bank boom keeps zombie firms alive

Assets in wealth management products surged 57 percent to $3.2 trln last year. The breakneck growth poses mounting risks to the wider financial system. What’s more, new data suggests a large chunk of the cash is propping up troubled sectors like coal, steel and property.

American oversight of financial tech looks so 2007

U.S. regulators are falling short of policing this emerging industry, partly because of the outdated patchwork of state rules. The UK and others are further ahead in addressing the sector in fresh ways. Creating a modern, federal regime to oversee these firms is a priority.

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