Private investor

Source: www.breakingviews.comis Europe's leading financial commentary service Sanofi's attempted e48 billion takeover of Aventis is just the latest in a string of merger moves in the drugs sector over the past decade. To get an idea of the scale of the activity, consider that the market share of the top 10 companies has risen from 25% in 1988 to around 50% today. And there is much further to go, as pill-making is still a highly fragmented activity compared with other sectors of the economy.

The UK has avoided adding an extra layer of complexity to M&A transactions after a legal ruling that the Office of Fair Trading can maintain a degree of discretion in assessing proposed deals. The ruling sends a positive signal that the UK is sympathetic to mergers.

At the end of February, Standard & Poor's revised its outlook on Volkswagen's single-A rating from stable to negative, owing to the car company's lower than expected 2003 earnings. VW's operating profits were down 48% to e2.5 billion in 2003, according to its headline numbers published last month. S&P said the sales performance of its new Golf, retaining its profitability in Europe and its ability to carry out planned annual cost cutting of e1 billion were the company's key challenges in 2004.

ABN AMRO Private Bank has added to the ever-growing jargon bandied about by bankers. "Internet cockpit" is its contribution. The bank's new office in Marbella boasts two of them. The Dutch bank is pulling out all the stops in its latest bid to win international high-net-worth clients with second homes in the Spanish resort. And the internet cockpits seem to be doing the trick. ABN says it has already seen lots of interest, particularly from Dutch clients.

Central bank and government profligacy in the west and Japan looks set to buoy up the gold price for some time to come.

With just over a year left before they lose the state guarantees that they rely upon for cheap financing, several German Landesbanken still do not have a clear strategy. Investors have reacted by rewarding those that have communicated a strong business plan. Katie Martin reports.

Source: www.breakingviews.comis Europe's leading financial commentary service Eric Daniels , the chief executive of Lloyds TSB, has passed over the opportunity to give the UK bank a radical change of direction. Not only that – he has forced out the one board member who was gunning for change, former finance director Philip Hampton.

Iran is finding it difficult to cope with high levels of unemployment in a youthful population. Despite vast energy resources, accelerated reform is vital if the economy is to be transformed. Kate Luxford reports.

Lehman Brothers has finally finished moving its London headquarters from its slightly gloomy premises in Broadgate to its shiny new tower in Docklands, joining Standard & Poor's and Bank of America as new residents in what is now London's key financial district. The building is so new that the local cab drivers haven't worked out how to get to it yet. And the building is very striking. In keeping with the big banks' one-upmanship in glitzy foyer design, it is super sleek and modern.

Asia's leaders are playing a dangerous game of poker with the US, accumulating dollar reserves even as the US currency falls. Excess liquidity is driving stock markets in Asia and threatens to inflate bubbles while economic restructuring is patchy. The game cannot continue indefinitely: the end could be ugly. Chris Leahy reports.

Banks and lawyers in the US face confusion over the tests used to determine their liability on securities fraud.

India's bond and equity markets spurted into action last month as the government announced over $3 billion-worth of sales of shares in six companies. Indian companies and banks will also tap the market for another $2 billion, about half of which will be foreign currency debt. In addition, the Asian Development Bank closed a $110 million rupee bond, the first local currency bond by a multilateral bank.

Iran's banking sector is dominated by five large state-owned commercial banks, accompanied by five smaller ones, which are required to conform to Islamic banking principles. As a rule, the public banks post weak profits, are undercapitalized and over-staffed, and are run by risk-averse managers. James McCormack at Fitch Ratings says the sector's weakness is state induced. "Sectoral credit allocations, deposit rates and lending rates are prescribed by the authorities based on economic development objectives as opposed to credit risk or monetary policy considerations," he says. The banks are thus "direct instruments of public policy". New licences

The Dutch B2B group pulls off a large restructuring to survive a liquidity crunch amid heavy trading of its debt by US hedge funds.

On February 25, the Bahrain Monetary Agency went on the road to sell a $250 million sukuk – Bahrain's first international Islamic bond. Bahrain's bond follows issues by Qatar and Malaysia. And the news that Citigroup is working with the German state of Saxony-Anhalt on an Islamic bond suggests that, as well as being used to boost the Islamic capital markets, sukuks can be commercially attractive to a broad audience.

Alan Greenspan came in for a great deal of criticism following his remarks to Congress at the end of February about social security and deficits. Whether he deserves it or not depends largely on your political colours. But his testimony raises a fundamental issue about ageing populations – an issue that politicians, inside and outside the US, ought to be wrestling with now. In the US today, federal commitments to social security and Medicare programmes are less than 7% of GDP. This is predicted to rise to 12% by 2030. When spending on Medicaid is added in, this percentage will be even higher. These are large sums that will further strain a US budget already crashing back into deficit.

At first blush, Thai Union Frozen Products Public Company seems to be a poster child of the new Thai economy.

Portuguese banks have come smoothly through the recent slump. But with fewer consolidation opportunities available at home, further growth seems dependent on ventures in neighbouring Spain. Spanish predators still circle. Jules Stewart reports.

Indonesia has at last emerged from IMF intensive care to take its own first tentative steps towards full rehabilitation. Banks looks healthier and the country is preparing to return to the international capital markets. Early signs are encouraging, but key challenges lie ahead, including the roll-over of domestic recapitalization bonds. Chris Leahy reports.

KfW's platform to securitize portfolios of loans to SMEs in Germany has broadened opportunities for the banks involved. It is far from clear, though, that these lenders have taken the steps needed to enhance margins on this business. Katie Martin reports.

Offshore bankers are coming under greater scrutiny and pressure to reform. The collapse of Italian dairy products group Parmalat and the EU's decision to target offshore centres and tighten corporate governance have helped to focus the attention of international authorities on this issue.

Standing in his office in Raffeisen's headquarters in Vienna, RZB International's chairman Herbert Stepic points with pride to a large world map dotted with small RZB flags showing the bank's outlets around the globe, including branches in China, Singapore and New York, and recently-opened subsidiaries in Albania and Belarus. His office is more like that of a Cecil Rhodes-type imperial pioneer than a banker, filled as it is with African sculptures and Chinese tapestries.

Baudoin Prot, the CEO of BNP Paribas, used a results announcement last month to deny some of the merger rumours involving his firm and to sketch out plans for using the bank's excess capital. As he outlined the bank's 2003 results, which included an impressive 13.1% increase in net income from the corporate and investment banking division, he declined to reveal what BNP Paribas would do if a large US firm bought one of its European rivals. He described such hypothetical strategic plans as "science fiction".

The rugby bandwagon continues to roll. Latest to declare their new love of the game are fund managers Gartmore. The recipient of Gartmore's contribution is that venerable rugby institution the Barbarians. The club, founded in 1890, is most widely lauded for its 1973 match against the New Zealand All Blacks in which Gareth Edwards scored arguably the greatest ever try.

Selling off Germany's autobahns and lamp posts are two of the more bizarre proposals of a government desperate to raise cash to bail out an ailing economy. The irony is that while there is broad agreement that changes are needed, the country's consensus system of politics is impeding progress. Ben Aris reports.

Amid the roll-out of China's vast privatization programme international attention is focused on the transfers of big state-owned enterprises. But the ownership of thousands of other smaller operations is being changed via hundreds of small, local asset exchanges. Regulation of these is being beefed up. Chris Leahy reports.

Iran's State Tax Organization (STO) last month made its ambitions clear: in 2004/05 it is aiming to gather enough tax revenue to cover almost half of government expenditure. To achieve this it needs to record a 38% year-on-year increase in tax collection, or total revenues of almost $11 billion.

The US spends and the rest of the world lends. But the US is spending too much, and if Asian central banks don't keep lending, this year could bring unprecedented risk for bond investors. That was the message from Laura D'Andrea Tyson, former chairman of US president Bill Clinton's Council of Economic Advisors, in her keynote address to the 10th Euromoney Bond Investors Congress in London on February 24.

Since New York state attorney general Eliot Spitzer went public last year with his investigations into the bias and conflicts of interest in research, the equity research landscape has been changing. A number of analysts at investment banks have set up or joined independent research companies causing a huge influx of new firms on the research scene.