Breakingviews

Biggest risk of geopolitics is as a distraction

By Edward Hadas
June 26, 2014

Fears that war and foreign policy chaos will disrupt the global economy have insidiously crept into the minds of investors, Barclays discovered. In reality, despite deterioration in the Middle East, the global balance is broadly positive. There are bigger things to worry about.

M&A targets can get stiffed when they “go shop”

May 23, 2014

The tactic of seeking bids after signing up a buyer is meant to ensure top dollar. More often, it leads to low offers and sale prices, new research shows. Deals like Media General’s buyout of Lin Media suggest sellers are wising up, though, portending better value for investors.

Hedge fund customers’ yachts washing further away

May 14, 2014

The flood of money – now $2.7 trln – in hedge funds has squashed returns below public stock markets. Private equity doesn’t seem to be doing much better. Both investing styles intuitively offer finite opportunity, yet fees encourage managers to hoard assets. Investors beware.

Rob Cox: The worry now is a brewing M&A bubble

May 13, 2014

The corporate urge to merge has gone into global hyper-drive. Activity has surged as investors egg companies on and bid up the shares of acquirers well beyond mathematical prudence. When new metrics to justify the irrational are trotted out, it’s time to exercise caution.

Egyptian bourse euphoria is premature at best

July 5, 2013

The prospect of calmer streets has sent shares up more than 12 pct in the last week. The rally can only last if the new regime acts swiftly to address the country’s twin deficits. Aid from the Gulf could help, but only serious reforms will really win back foreign investors.

Potemkin Dell fight would have optical merits

March 27, 2013

Even if Blackstone doesn’t buy the PC maker, bidding against Silver Lake at least looks like rivalry in LBO-land, undermining allegations of collusion. Dell’s board also comes off as rejecting the bad J Crew precedent. A phony battle just won’t help shareholders much.

Bumi debacle teaches some all too basic lessons

February 22, 2013

Most of the mess at the London-listed Indonesian coal miner could have been avoided if Nat Rothschild and his backers had followed what should be standard practices for risky investments. Breakingviews has a check-list for future purveyors of exotic deal structures.

Low valuations don’t make China stocks a bargain

November 29, 2012

Conventional gauges of value make them tempting, particularly amid signs growth may be picking back up. But even if the economic rebound lasts, stocks haven’t proved to be great proxies for corporate growth. Even China bulls should be ursine on equities.

How Sahara left Indian investors feeling deserted

September 27, 2012

The conglomerate raised $4.5 billion from millions of small investors. Now it has been ordered it to return the cash, its finances face a stiff examination. The saga also raises questions about India’s financial regulation - and how such scandals can be avoided in future.

China investors get wise to a new four-letter word

July 18, 2012

Really it’s an acronym: VIEs.  These are the structures used by half of Chinese firms listed on the Nasdaq to get around restrictions at home. The SEC’s probe of New Oriental Education may sound their death knell. In the end, that’s probably best for investors - and for China.