Breakingviews

French investment banking has less than meets eye

April 23, 2015

Returns at BNP Paribas’ and Societe Generale’s trading and advisory businesses are better than peers. But the pair’s divisions carry less equity against gross assets than rivals. Before dashing in, investors should consider what the return would be with greater leverage restraint.

McDonald’s serves up Earth Day nugget

April 22, 2015

The fast food chain aims to end its role in deforestation, following agriculture giant ADM’s lead. Investors, whose pressure helped, are also alert to climate change and water risks. Such shifts boost the annual homage to the planet, but they are bite-sized appetizers at best.

Tesco’s new beginnings are a long way from the end

April 22, 2015

Last year’s 6.4 bln stg pretax loss shows the size of the problems at Britain’s biggest grocer. A 45 pct share price rebound since December reflects hope that Dave Lewis, the newish CEO, will restore the retailer’s former glory. Investors are taking a great deal on trust.

Teva’s $40 bln hostile bid puts hope over reality

April 21, 2015

The Israeli drugmaker needs a deal to shore up falling sales. Smaller rival Mylan offers that and oodles of synergies. A tie-up, though, would face antitrust concerns, require high leverage and have to get around a powerful poison pill. No wonder the market is skeptical.

Morgan Stanley Q1 rivals Goldman by different path

April 20, 2015

James Gorman’s firm had its best quarter in years. Its Wall Street competitor still has the edge with returns and book value growth. By one key metric, though, investors value Morgan Stanley more highly. Gorman’s strategy, which downplays volatile trading, is starting to pay off.

Bernanke musters maximum revolving-door dignity

April 16, 2015

The Fed boss turned blogger will advise $25 bln hedge fund Citadel. Critics may object, and the move won’t help the U.S. central bank’s image of being above the fray. But former public servants deserve to work for pay. At least Bernanke waited over a year and didn’t join a bank.

Agnellis pay up to claim mini-Buffett status

April 15, 2015

Exor, the Italian family’s holding company, is offering a premium to buy PartnerRe out of a merger with fellow reinsurer Axis. The price is full and the bid lacks its rival’s synergies. But debt is cheap, and Berkshire Hathaway-style cash flow could fund further acquisitions.

EU’s competition sprawl as worrying as Google’s

April 15, 2015

Europe has accused the web giant of favoring its own shopping search results and broadened the case to include its Android mobile operating system. Investigations and appeals may take a decade. Brussels’ ambitious lack of focus is similar to what threatens ever-expanding Google.

Wall Street bids slow farewell to GE fee darling

April 13, 2015

The U.S. conglomerate has been the best corporate client for investment bankers since 2000, spending some $5.1 bln for assistance. Shrinking GE Capital will keep M&A dealmakers happy. The unit’s borrowing, however, is the biggest moneymaker. Much of that could now be at risk.

Immelt’s SIFI escape route is tough to follow

April 10, 2015

The $280 bln GE is offloading most of its finance unit and should be able to ditch the systemic tag imposed by watchdogs. That will free CEO Jeff Immelt’s remaining empire from onerous rules. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.