Oct 29, 2014 15:08 UTC

Deutsche Bank’s fixed income wager yet to pay off

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Deutsche Bank’s strategy is still on probation. The German group decided earlier this year not to follow Barclays, its largest European rival, in cutting back its investment bank. The bet will only pay off if the recent slowdown in bond trading is merely cyclical, not part of a structural decline. The evidence from the third quarter results is inconclusive.

Oct 28, 2014 18:47 UTC

Sky-high valuations no match for earnings reality

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Sky-high valuations are no match for the sober black-and-white of quarterly earnings. Investors knocked more than 10 percent, or well over $3 billion, off Twitter’s worth in early trade on Tuesday despite a third-quarter report on Monday that showed sales doubling from a year earlier. Blame the company’s overdone valuation. Twitter trades at more than 100 times its own “non-GAAP estimated earnings” measure. Other U.S. companies on high multiples have suffered a similar reality check.

Oct 27, 2014 17:50 UTC

Chiquita inversion slips on cash appeal

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By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Chiquita shareholders got yellow and chose green. They voted down a stock deal to acquire Irish produce distributor Fyffes, a decision that led the U.S. banana company on Monday to agree to sell to Brazilian buyers for about $680 million in cash instead. Ailing arbitrageurs, a revolt against tax-driven mergers and global economic ructions all led to the path of least uncertainty.

Oct 27, 2014 07:09 UTC

Missed stock connection hurts China’s reform drive

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

China’s financial reform drive has suffered another setback. A flagship scheme to link the Hong Kong and Shanghai stock exchanges has been delayed after regulators failed to approve it ahead of an expected launch on Oct. 27. The setback puts another question mark over why foreign investors would want to access China’s markets in the first place.

Oct 24, 2014 19:57 UTC

Duracell jolt highlights the value of focus at P&G

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Procter & Gamble’s Duracell jolt highlights the value of focus at the sprawling $225 billion consumer products giant. Investors were energized by the detergent-to-diapers behemoth’s plan to offload its batteries arm. Spinning off copper tops won’t create much value on its own. But it’s a solid plank in boss A.G. Lafley’s campaign to shed underperforming brands and simplify an unwieldy business.

Oct 24, 2014 13:03 UTC

Amazon’s ambition outruns its cash flow

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Amazon’s ambition is outrunning its cash flow. The online retailer’s 20 percent sales growth in its third quarter was slower than expected, and its $437 million loss was an ugly record. But it’s the firm’s voracious need for investment that is the bigger problem. Chief Executive Jeff Bezos’ vision may be limitless, but his company’s ability to finance it is not.

Oct 22, 2014 15:55 UTC

Amgen boss makes a prime breakup target

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By Robert Cyran

The author is  a Reuters Breakingviews columnist. The opinions expressed are his own. 

Amgen’s boss makes a prime breakup target for Dan Loeb. Former Morgan Stanley banker Robert Bradway has run the $109 billion biotech being eyed by the activist investor for the past two years. The idea of splitting such companies into a cash cow and a growth arm comes up often, but rarely happens. Amgen may be the exception.

Oct 21, 2014 13:43 UTC

FX business now shares equities’ harsh economics

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By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Currency trading is taking over from equities as the challenged business in investment banking. Resurgent volatility in foreign exchange markets during September and October is unlikely to offer more than a temporary respite for the business.

Oct 20, 2014 18:49 UTC

Adidas can’t afford to be sentimental about Reebok

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By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Unwinding the ill-fated acquisition of Reebok could offer a much-needed new start for German sportswear maker Adidas.

Oct 20, 2014 13:07 UTC

Spreadsheet bungles alive and well in high finance

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By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

There’s no rule about Excel’s infallibility. Yet obvious spreadsheet errors still occur, even in the citadels of high finance. No less a practitioner than Goldman Sachs double-counted some of Tibco’s shares in calculating the business software company’s value in a sale worth $4.3 billion – oops, make that $4.2 billion. Both the firm and its client must have been distracted.