Breakingviews

Big U.S. banks have plenty to prove in 2013

By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Big U.S. banks have plenty to prove in 2013. Wells Fargo aside, valuations have languished below book value. After a strong 2012 for stock markets and with fourth-quarter earnings reports imminent, JPMorgan and Goldman Sachs are again near that level. But when they get there, it will be a relief rather than anything to crow over.

Beware bond-equity rotation and focus on value

By Robert Cole

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

Investors have started 2013 feeling bold. Equities are firm, bonds are weak and gold is soft. Is this the long-awaited rotation back to risk? Many market participants say so. But betting on a herd movement is a dangerous investment strategy.

This time it’s different for capital-markets cycle

By Dominic Elliott

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

History rhymes, even in the capital markets. Global issuance in three major asset classes seems to follow a pattern after a financial crisis, Thomson Reuters data shows. And many equities bankers think it’s happening again. First there was a recovery in investment-grade debt. Then junk bonds picked up. If previous cycles are any guide, this year should see a revival in initial public offerings.

Sprint and Softbank forced into tactical warfare

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

Sprint and Softbank are being forced into tactical warfare. U.S. satellite-TV company Dish Network, run by the enigmatic Charlie Ergen, put forward a highly conditional $2.3 billion offer for Clearwire, a spectrum owner integral to the ambitions of Sprint and its Japanese buyer. Though the bid is unlikely to go far, it could pressure Sprint to pay more – or strike a deal with Dish.

Porsche’s real legal crash test is yet to come

By Olaf Storbeck

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

Porsche has enjoyed a smooth ride in the courts so far. The carmaker has avoided the potholes created by its epic and unsuccessful attempt to gobble up Volkswagen. Disgruntled investors accuse the company of systematic lying during the 2008 saga, and are suing for billions of compensation. Porsche rejects all accusations. But in spite of the significant hurdles investors who feel they’ve been duped are facing in the German legal system, the group isn’t out of the woods yet.

Ping An flop could leave HSBC red-faced but richer

By Peter Thal Larsen

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

A failed Ping An sale could leave HSBC red-faced, but richer. If regulators veto the UK bank’s $9.4 billion plan to offload its near-16 percent stake in the Chinese insurer, HSBC’s reputation will take a knock. But it could still end up financially better off.

Big-shot banker class of 2012 gets back to work

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

Wall Street churned out an unusually large group of big-shot bankers last year. One of them, Jes Staley, may offer a glimpse into what the market holds in store. JPMorgan’s former investment banking chief is joining hedge fund BlueMountain Capital. It’s not the top job at Barclays, a role Staley looked at, but it’s also a potentially less stressful but lucrative role. The Class of 2012 that includes Bob Diamond and Vikram Pandit may find power and glory similarly elusive.

Rights issue rethink could ease sting for Deutsche

By Dominic Elliott

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

A rights issue U-turn would be a bitter bill for Anshu Jain and Juergen Fitschen to swallow. Deutsche Bank’s co-chief executives vowed in September to strengthen the bank’s finances without tapping shareholders. But U.S. capital rules, non-core losses and a looming Libor settlement have upped the ante.

Oil barons and tech hipsters share a dark side

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

Oil barons and technology hipsters seem very different. But they share a dark side. The chief executive of U.S. explorer SandRidge Energy and some of his peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors.

Liquidity U-turn is sell signal for bank shares

By George Hay

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

Global regulators’ great liquidity U-turn is a sell signal for banks. That’s not the way investors chose to look at it on Jan. 7, as the share prices of global lenders rallied. Admittedly, the watering down of rules intended to protect banks against deposit-runs will mean higher short-term profit. But the economic slowdown that has caused formerly macho regulators to roll over is a more enduring negative force.