Breakingviews

Luxury groups should focus their FOMO on Iran

April 25, 2016

With $32.6 bln of frozen offshore cash to be repatriated post-sanctions and GDP to grow 6 pct next year, Tehran can be a magnet for high-end consumption. A lack of infrastructure and political volatility are reasons to hesitate. Offsetting that is the risk of missing out.

Italy’s bank rescue is a risky Plan C

April 12, 2016

Rome has corralled banks into backing a 6 bln euro rescue fund. It’s something, but raises knotty governance issues without decisively plugging bad debt holes. Were they available, market solutions or creditor bail-ins would have been much better than stiffing the bank sector.

Gucci gives sneak preview of life after turnaround

February 19, 2016

Kering’s most important luxury brand beat sales estimates in the fourth quarter, the result of more desirable products and a slick advertising campaign. It looks to be putting three years of bumpy growth behind it. Yet falling operating profit margins will continue to drag on the valuation.

Dixon: How to rehabilitate capitalism

February 1, 2016

The classic leftist response to capitalism’s unfairness - tax and spend - has failed. A better bet is to fight unfairness caused by corruption, vested interests and tax cheating, while investing in education. India and Italy show some of the right ideas.

Mediobanca gets Barclays to pay for its own pivot

December 3, 2015

The UK bank is paying its peer 237 mln euros to take its Italian branches. Barclays gets rid of an unprofitable, non-core deadweight. Mediobanca gets a leg up in the arms race for asset management fees in Italy. Just as well, given Italian retail banking is under the gun.

Italy’s zero-cost bailout is too good to be true

November 23, 2015

The Italian bank resolution fund will cough up 3.6 billion euros to restructure four failing lenders. Officially, public funds won’t be used, but the burden will hit a sector already struggling with low rates and weak demand. Rome could find itself on the hook too.

A Panglossian guide to valuing Telecom Italia

November 20, 2015

Telecom Italia’s tough home market and high debt might struggle to elicit a buy from even Voltaire’s eternal optimist. Purchases from French billionaires Vincent Bollore and Xavier Niel have driven up the price. The shares could be worth more, but only with heroic assumptions.

Italy regains market cred with Poste Italiane IPO

October 23, 2015

The 3.4 bln euro sale of shares in the post office was oversubscribed – even though the company remains mainly government-owned and it does little to cut Italy’s debt. Still, the country now looks open for business and has atoned for an earlier botched privatisation of Fincantieri.

Euro zone rediscovers sloppy fiscal policy

October 15, 2015

Deficits are creeping up in Spain, Italy and even growth star Ireland. Reasons include easy money and pre-election spending. As yet, the gaps aren’t dangerously big. What’s more worrying is poor spending decisions, slowing reforms and fiscal dissonance between member states.

Renzi shrinks Italy’s political risk premium

October 14, 2015

Prime Minister Matteo Renzi achieved an important step in his plan to reform Italy’s upper house. That should mean more stable governments. Italy’s bond yields are already close to pre-crisis levels. Narrowing the discount to France or Germany requires further economic reform.