Breakingviews

Miners’ dividends are a fragile commodity

August 25, 2015

BHP Billiton has raised its payout even as prices fall. That helps win investor support for its aggressive iron ore production strategy. Yet across the sector, funding generous payouts will become tough unless supply and demand rebalance. There is little to suggest they will.

Glaxo sale comes with cheeky earnings side effect

August 21, 2015

UK pharmaceutical firm GlaxoSmithKline is selling a multiple sclerosis drug to Novartis for up to $1 bln. It’s a logical move and Glaxo gets a good price. The quirk: it will include proceeds from the one-off as part of underlying revenue. Pharma investors need to watch their core.

Edward Hadas: Tom Hayes had the wrong standards

By Edward Hadas
August 12, 2015

The convicted trader said he was like most people. They just “do their job” without asking whether it is honest or dishonest. He has a point. Society requires such upward ethical delegation and it usually works pretty well. Except, that is, in the financial world.

Zurich can justify a swoop on RSA

August 6, 2015

The Swiss insurer released disappointing results but thinks its UK peer remains a good fit. Zurich’s hurdle rate for investment is around 10 percent. Offering 600p a share for RSA, a 36 pct premium, should allow that without synergy assumptions being too ambitious.

Best chapter in Pearson breakup story yet to come

August 5, 2015

The media group can soon sell its 47 pct stake in publisher Penguin Random House to co-owner Bertelsmann. Including future synergies, the stake could fetch $2.7 billion, twice what Pearson got for the FT. Since the venture could get more valuable still, waiting looks better.

StanChart hired gun Promontory shoots self in foot

August 3, 2015

New York regulators say the politically cozy firm whitewashed a probe of the bank and have suspended it from advising lenders. The penalty may curb conflicts and stings more than a mere fine. Maybe U.S. watchdogs will take the hint and stop waiving the consequences of misdeeds.

Timing looks right for RBS state selldown

August 3, 2015

Cutting its 79 pct stake in the lender would leave the UK with a paper loss, yet focusing on the exact in-price is unhelpful. Better to sell than hold on for a recovery in price that may never come. Besides, the good vibes that come from less state ownership should limit losses.

BP is making the best of a bad situation

July 28, 2015

Underlying profit at the UK oil major fell 64 percent. The lower oil price is the main culprit. Costs and capital expenditure are coming down, and operating cashflow remains resilient. But with the oil price falling again, BP has more challenges than opportunities.

The Economist’s elite owners seek elite print run

July 28, 2015

The Agnellis, the Rothschilds, et al may buy more as Pearson sells. A 6 pct dividend yield has appeal. If the valuation – recently 730 mln stg – and payout are to keep rising, however, the weekly has to succeed where other publications have failed and turn its top line around.

Tide flows against UK’s pro-EU campaigners

July 24, 2015

Polls right now suggest Brits want to stay in Europe. Yet the rough handling of Greece and a proposed transatlantic trade deal are alienating left-leaning voters. Meanwhile, potential sops to those worried by immigration are very unlikely to placate eurosceptics on the right.