Thị trường chứng khoán chưa có dòng tiền mới

(TBKTSG Online) - Các chính sách vừa ban hành vẫn chưa có gì cụ thể để hỗ trợ cho dòng tiền vào thị trường. Các công ty chứng khoán cho biết hiện tại tiền đang “chạy lòng vòng” từ kênh đầu tư này sang kênh đầu tư khác, còn dòng tiền mới đến tham gia thị trường thì chưa thấy.

Ngân hàng Nhà nước (NHNN) vừa ban hành Chỉ thị 01/CT-NHNN. Trong chỉ thị này, NHNN tiếp tục đưa việc đầu tư, kinh doanh chứng khoán vào danh mục phi sản xuất, tức tỷ trọng cho vay so với tổng dư nợ trong năm 2012 của các ngân hàng tối đa là 16%, không đổi so với năm 2011. Trong khi trước đó, ông Vũ Bằng, Chủ tịch Ủy ban Chứng khoán cho biết là đã đề xuất với NHNN đưa chứng khoán ra khỏi danh mục phi sản xuất nhằm khơi thông dòng vốn vào chứng khoán.

Trước thông tin NHNN để nguyên mà không giảm bớt tỷ trọng dư nợ cho vay đối với các lĩnh vực không khuyến khích, trong đó có chứng khoán, ông Bằng nói với Thời báo Kinh tế Sài Gòn Online rằng đó đã là một quyết định tích cực trong thời điểm này, ít nhất cũng không rút bớt dòng tiền vào chứng khoán. Điều đó cho thấy động thái hỗ trợ thị trường bằng nguồn vốn ngân hàng trong thời gian tới xem như không thể nới rộng hơn.

Tuy vậy, một số công ty chứng khoán cho rằng, trong đợt tăng mạnh vừa qua ( hơn 1 tháng, VN-Index đã tăng gần 20%-PV) thì sự tham gia của dòng vốn vay từ ngân hàng là không nhiều, một phần do chứng khoán vẫn nằm trong đối tượng hạn chế cho vay của nhiều ngân hàng, một phần vì lãi suất cao, khoảng từ 22- 25%/năm nên nhà đầu tư không vay. Hiện tại hoạt động cho vay ký quỹ đã được nhiều công ty chứng khoán áp dụng nhưng không nhiều nhà đầu tư mặn mà. Dòng vốn vào chứng khoán trong các tháng gần đây chủ yếu đến từ vốn nhàn rỗi của nhà đầu tư. Vì vậy, chỉ thị mới của NHNN cơ bản sẽ không tác động nhiều đến dòng tiền vào chứng khoán.

Ông Nguyễn Hồng Nam, Phó giám đốc Công ty Chứng khoán SSI, cho biết hiện tại chỉ còn một số công ty chứng khoán lớn cho nhà đầu tư vay ký quỹ, tức dùng vốn của ngân hàng liên kết hoặc vốn của công ty cho vay, nhưng mức vay cũng hạn chế. Và tại SSI, tổng giá trị nhà đầu tư vay trong đợt tăng vừa qua không lớn. Trong khi đó, đa phần các công ty nhỏ rất ít cho vay vì bản thân công ty lỗ, tiền có được không đủ bù đắp chi phí nên không thể cho vay.

Ông Phan Dũng Khánh, Trưởng phòng Phân tích Đầu tư Công ty Chứng khoán Kim Eng, cũng cho rằng dòng vốn vào thị trường hiện nay chủ yếu đến từ các kênh đầu tư khác, tức những người đầu cơ vàng, ngoại tệ khi thấy các kênh này không sinh lãi, trong khi chứng khoán liên tục tăng, giá cổ phiếu lại thấp thì đã quay về nộp tiền vào các tài khoản đã mở trước đó, khiến cho dòng tiền vào chứng khoán tăng lên. Nhưng ông Khánh cũng thấy những dòng tiền này khó ổn định, do hiện tại chưa có thông tin vĩ mô tích cực nào thực sự hỗ trợ cho chứng khoán.

Ông Nam cho biết, hiện không có nhà đầu tư nước ngoài lớn nào mở tài khoản mới tại SSI, dòng tiền đến từ nhóm này không có gì đột biến. Việc mua ròng chỉ là một hoạt động đầu tư thông thường của quỹ đầu tư. Con số giải ngân cũng chủ yếu của các quỹ đầu tư cũ, họ giải ngân vào thị trường nhiều hơn so với cuối năm ngoái, chỉ là do nhìn thấy giá cổ phiếu đã rất thấp, vì vậy có thể mua để nhận cổ tức hoặc sở hữu công ty với giá rẻ.

Theo tiến sĩ Lê Đạt Chí, Trưởng bộ môn Đầu tư tài chính, trường Đại học Kinh tế TPHCM, với giá trị giao dịch chỉ vài trăm tỉ đồng mỗi phiên, không tăng đột biến so với năm ngoái thì dòng tiền thực sự chưa vào thị trường nhiều. Với dòng vốn đầu tư nước ngoài, ông Chí cho rằng phải chờ các tín hiệu rõ ràng hơn từ tái cấu trúc 3 trụ cột là đầu tư công, doanh nghiệp nhà nước, và tái cấu trúc hệ thống tài chính thì mới mong nhà đầu tư giải ngân vào chứng khoán. Việc này cần rất nhiều thời gian thực hiện, do đó khó kỳ vọng sớm có dòng tiền mới nào vào thị trường.

Trong đợt tăng vừa qua, theo ông Chí, đó là hiệu ứng của việc Sở Giao dịch Chứng khoán TPHCM đưa ra chỉ số VN30. Việc này đã làm cho nhà đầu tư hy vọng vào sự tăng giá của các cổ phiếu trong rổ tính chỉ số này. Tuy vậy, đà tăng do yếu tố trên sẽ chấm dứt, khi vấn đề nội tại của nền kinh tế như lạm phát, lãi suất vẫn chưa được giải quyết và các công cụ hỗ trợ thị trường chứng khoán như rút ngắn thời gian thanh toán, nới rộng biên độ cho sàn TPHCM…chưa được triển khai. Thêm vào đó, nhà đầu tư hiện cũng chờ đợi các biện pháp đối với công ty chứng khoán để tiền của mình được bảo vệ, trước việc nhiều công ty chứng khoán dùng tiền của nhà đầu tư vào mục đích riêng.

Source: http://www.thesaigontimes.vn/Home/taichinh/chungkhoan/71269/Thi-truong-chung-khoan-chua-co-dong-tien-moi.html

M&A lĩnh vực nào sẽ sôi động?

(TBKTSG Online) - Trao đổi với báo giới bên lề “Ngày hội đầu tư” được tổ chức ngày 16-2 tại TPHCM, ông Đặng Doãn Kiên, Trưởng đại diện Quỹ đầu tư Aureos tại Việt Nam, cho rằng hoạt động M&A (mua bán, sáp nhập) năm 2012 sẽ tiếp tục sôi động, nhất là trong lĩnh vực tài chính, bất động sản.

PV: Ông đánh giá như thế nào về tình hình M&A trong năm 2011 ở Việt Nam?

Ông Đặng Doãn Kiên: Năm 2011, hoạt động M&A ở Việt Nam rất sôi động, chủ yếu tập trung vào ngành hàng tiêu dùng, tài chính, bất động sản. Chỉ tính riêng đến tháng 9-2011, theo số liệu từ Netxus thì giá trị M&A nhận được là 2,67 tỉ đô la Mỹ, tăng đến 150% so với cả năm 2010. Ngành tiêu dùng được mua bán, sáp nhập nhiều nhất với hơn 1 tỉ đô la Mỹ (chiếm 38,6%), đứng thứ 2 là ngành tài chính với 453,4 triệu đô la Mỹ, chiếm 16,9%. Nguồn vốn mua lại chủ yếu đến từ nước ngoài với khoảng 81,3%, trong khi vốn trong nước chỉ chiếm 18,7%.

Trong năm 2011 cũng chứng kiến nhiều thương vụ M&A do sự thoái vốn của các quỹ đầu tư, do các quỹ hoạt động từ năm 2003 bắt đầu phải đóng quỹ. Trong năm 2012, hoạt động thoái vốn của các quỹ sẽ tiếp tục xảy ra nhiều hơn, vì vậy số lượng và giá trị các thương vụ M&A có khả năng sẽ tăng.

Như ông nói thì trong năm 2011, số lượng thương vụ M&A ngành tài chính rất lớn, vậy trong năm 2012, xu hướng này có thể sẽ tiếp diễn?

- Trong điều kiện cần phải hợp nhất để có các ngân hàng hoạt động tốt hơn, như đề án tái cấu trúc hệ thống ngân hàng, đồng thời với thực tế là một số công ty tài chính, ngân hàng của Việt Nam hiện rất nhỏ, khiến cho quá trình cạnh tranh chưa hiệu quả, nên trong thời gian tới khả năng diễn ra hoạt động M&A trong ngành tài chính sẽ tiếp tục diển ra mạnh mẽ.

Nhiều công ty chứng khoán ở Việt Nam đang rất muốn bán bớt phần vốn cho nhà đầu tư nước ngoài hay quỹ đầu tư, như vậy, liệu họ có cơ hội trong năm 2012 chăng?

- Thực ra, trong năm 2011 nhiều tổ chức nước ngoài đã mua công ty chứng khoán. Nhưng thực tế, việc mua lại này chính là để mua phần mềm giao dịch của họ. Vì nếu bỏ tiền mua phần mềm thì còn cao hơn tiền mua một công ty chứng khoán.

Như tôi biết, số lượng công ty chứng khoán nước ngoài có nhu cầu mua công ty chứng khoán Việt Nam rất ít, nhưng nhu cầu muốn có nhà đầu tư nước ngoài tham gia góp vốn, xây dựng đội ngũ của công ty chứng khoán Việt Nam thì rất cao. Tuy nhiên, công ty chứng khoán có gì để mua? Nếu nói mua số lượng tài khoản thì không đúng, vì trong tương lai một nhà đầu tư có thể mở tài khoản ở nhiều nơi. Nếu nói mua công ty chứng khoán vì có đội ngũ nhân lực chất lượng tốt thì cũng không hẳn, vì đội ngũ nhân lực ngành này hiện nay rất mỏng, để có được đội ngũ giỏi là rất khó, nhân lực lại liên tục biến động, trong khi rất ít công ty chứng khoán có các tài sản cố định.

Đó là lý do hiện tại nhà đầu tư nước ngoài chưa mặn mà với việc mua công ty chứng khoán, cho dù trong cam kết WTO thì năm 2012 này nhà đầu tư nước ngoài có quyền mở các công ty chứng khoán 100% vốn tại Việt Nam, và nếu mua lại thì sẽ rút gọn được thủ tục rất nhiều.

Còn M&A trong lĩnh vực ngân hàng? Trong năm nay với đề án tái cấu trúc hệ thống ngân hàng thì cơ quan quản lý cũng rất ưu tiên cho việc tham gia góp vốn của nhà đầu tư nước ngoài, vậy liệu hoạt động mua bán sáp nhập ngân hàng trong năm nay có sôi động không?

- Tôi đánh giá các thương vụ M&A của ngành ngân hàng trong năm 2012 sẽ diễn ra nhiều, nhưng sẽ không sôi động bằng bất động sản và hàng tiêu dùng. Vì thực tế, đầu tư vào hoạt động ngân hàng vướng rất nhiều khung pháp lý, trong đó có giới hạn sở hữu vốn của nhà đầu tư nước ngoài. Đồng thời các ngân hàng Việt Nam phát triển rất nhanh, nhưng số lượng tài khoản, giao dịch thị trường hiện không nhiều, vậy có cần thiết phải có nhiều ngân hàng như vậy không, và có cần phải có những ngân hàng nhỏ đến như vậy không?

Khi nhà đầu tư nước ngoài vào, họ chỉ được nắm một phần nhỏ cổ phần, trong khi họ rất băn khoăn, không biết chuyện gì đang xảy ra bên trong các ngân hàng. Nhiều khi mua phải các ngân hàng mà có nhiều cách làm ăn, hệ thống quản lý, tài sản…không phù hợp với ngân hàng mẹ, ảnh hưởng đến uy tín ngân hàng mẹ. Vì vậy M&A có thể xảy ra, nhưng có mạnh mẽ hay có nhiều yếu tố nước ngoài hay không thì có thể sẽ không bằng bất động sản.

Vì sao ông cho rằng sôi động nhất trong hoạt động M&A năm nay sẽ nhắm vào thị trường bất động sản?

- Vì tôi cho rằng đây là thị trường cần rất nhiều vốn. Đây cũng là thị trường chỉ mới phát triển manh mún, trong khi tiềm năng lại rất lớn. Trong điều kiện nguồn vốn ở Việt Nam rất đắt đỏ, thì Nhật Bản, Singapore…có nguồn vốn rẻ hơn và nguồn vốn của người nước ngoài kiên nhẫn hơn. Trong thời gian này, bất động sản lại đang ngày càng giảm giá, nên tôi nghĩ rằng việc M&A lĩnh vực này sẽ diễn ra tương đối sôi động.

Nguồn vốn đầu tư nước ngoài (FDI) vào bất động sản rất lớn, tuy vậy hiện tại ngành bất động sản bị vướng phải hạ tầng. Hạ tầng của Việt Nam chưa theo kịp tốc độ phát triển, khiến cho nhà đầu tư nước ngoài e ngại.

Hiện tại cũng đang có xu hướng các công ty quản lý quỹ mở quỹ đầu tư bất động sản. Nhiều nhà đầu tư vẫn đánh giá ngành bất động sản có tiềm năng lâu dài, trong khi sắp tới sẽ có các đợt giảm giá nữa, có nhiều cơ hội cho họ. Như trong năm 2007, nhà đầu tư nước ngoài khó tiếp cận với các khu đất tốt, nhưng 2011 các khu đất này được mang ra chào, nhà đầu tư nước ngoài được tiếp cận nhiều. Vì vậy tôi cho rằng thị trường bất động sản hiện là cơ hội của nhà đầu tư nước ngoài, nhất là khi họ có cả vốn, công nghệ và kỹ năng.

Xin cảm ơn ông!

Source: http://www.thesaigontimes.vn/Home/taichinh/chungkhoan/71443/M&A-linh-vuc-nao-se-soi-dong?.html

Mining Investors Can Take Their Pick

Times are a-changin' for global miners.

Glencore and Xstrata's proposed $90 billion tie-up will bring a unique model to the sector, combining mining with commodities trading. In truth, the world's biggest mining companies are already following divergent paths, from BHP Billiton's investment in shale gas and potash, to Rio Tinto and Vale's single-commodity focus. The question for investors is which model offers the most reliable returns.

Risks for miners are certainly accumulating. A hard landing for the Chinese economy would hit commodity prices hard, particularly iron ore, where China accounts for 60% of global demand. High energy and salary costs are eating into margins. Governments are also targeting the sector: The threat of outright mine nationalization lingers in places such as South Africa and Mongolia.

Against this backdrop, BHP Billiton's model is the most defensive, given its focus on a few major projects across a range of commodities in politically stable countries. Its problem lies in matching some investors' hopes for short-term returns against its desire for a portfolio to satisfy long-term commodity demand.

For example BHP's large investment in U.S. shale gas may not see a positive return before 2020 if gas prices remain subdued, HSBC estimates. BHP's heavy capital-expenditure program means its free cash flow yield could trail its peers by next year, limiting scope for higher dividends or share buybacks, according to brokerage Jefferies.

Still, BHP's balance between risk and reward looks attractive relative to its rivals. At 8.8 times expected 2012 earnings, the shares trade more cheaply than all but those of Rio Tinto and Brazil's Vale, according to FactSet. Yet Rio relies on one Australian iron-ore mine for 70% of its earnings. Vale is even more concentrated on iron ore; it accounts for more than 90% of its operating profit.

True, Anglo American is more diversified, but its political risk is higher, with around 40% of earnings generated from assets in South Africa. Glencore-Xstrata, meanwhile, is likely to grow more through acquisition. But that could take it into lower-quality assets in politically risky areas; claims that Glencore's trading arm will enhance and smooth earnings remain unproven.

Merger mania may have brought near-term excitement to the mining sector. But for investors with a longer horizon, BHP Billiton still looks a keeper.

Source: http://online.wsj.com/article/SB10001424052970204062704577222902312816094.html?mod=WSJ_Heard_LEFTTopNews

The Lessons Learned From Diamond’s Pringles Fiasco

With Kellogg’s deal to acquire Procter & Gamble’s Pringles brand for $2.695 billion in cash, Diamond Foods is left with nothing. Proctor & Gamble’s announcement of the deal was accompanied by a terse statement that the consumer products company had terminated its prior agreement to sell Pringles to Diamond Foods.

It is a staggering reversal of fortune for Diamond and its now-suspended chief executive and chairman, Michael J. Mendes.

So it is time to see what we have learned from the twists and turns of this failed deal. Once again, some of these lessons seem rather basic, even cliché, but worth repeating. Frankly, deal makers tend to repeatedly ignore them. The masters of the universe need the reminder.

Don’t Run Before You Can Walk

Diamond Food was leveraging up to buy Pringles, assuming $850 million in debt. This was also a deal in which a minnow would be swallowing a whale. At the time the deal was announced, 2011 revenue at Pringles was estimated to be about $1.4 billion. Diamond’s 2011 estimated revenue was a third lower, at about $950 million.

Because Diamond could not afford to pay cash for Pringles, Diamond intended to issue $1.5 billion in its common stock in connection with the transaction. Because Pringles was so much bigger, Diamond shareholders would have only owned 43 percent of the combined company. P.&G. shareholders would have owned the rest, a majority of Diamond’s shares.

Diamond made this acquisition as part of a strategy to move away from its longtime focus on selling nuts. It had previously been a consortium formed by almond growers. But Mr. Mendes wanted more. He had already bought the Pop Secret brand, and the Pringles acquisition was Diamond’s chance to transform itself into a more consumer-oriented snack food company.

Mr. Mendes’s strategy was too much too soon. Like the 2008 deal in which Finish Line attempted to acquire the much larger Genesco, this also ended badly.

Mr. Mendes treated the nut business as an orphan child he appeared to want to abandon. This left that business increasingly vulnerable and weak. And that weakness came back to haunt Diamond as the nut business deteriorated. It now appears that the decline was made up through possible accounting manipulation. Mr. Mendes would have been better off keeping a focus on his nut business and growing more slowly, rather than searching for a world-changing acquisition.

Expect Scrutiny

Diamond’s acquisition announcement was fun for the company in the first few days as it celebrated the deal and expansion, but it also led short-sellers to focus on Diamond. The announcement also appears to have spurred frustrated growers to emerge and raise issues with Diamond’s business. This type of scrutiny is not unusual in acquisition deals. But companies often do not expect it, instead treating the acquisition announcement as the end of the matter.

This is anything but the case. Companies should perform their own internal due diligence before announcing a big transaction. In addition, a company should be prepared with both an investor and public relations strategy from the get-go. Diamond failed here. Miserably.

Agreements Matter

P.&G. got lucky. Diamond’s special board committee gave P.&G. an easy out of the agreement by finding that Diamond’s accounting statements had to be materially restated and suspending Mr. Mendes and the company’s chief financial officer, Steven M. Neil. The accounting restatement and suspensions provided P.&G. with grounds to assert a material adverse change claim in order to terminate the deal.

But P.&G. might have been stuck if Diamond’s committee had found differently. If Diamond was able to get its financial statements through the Securities and Exchange Commission, then P.&G. would have had few grounds to exit the deal. This would be despite the fact that significant uncertainty remained about Diamond and its stock price could have remained in the cellar.

P.&G. could have solved this problem by negotiating a common right in acquisition agreements that gives the seller the right to terminate a deal if the target’s stock drops below a certain level. In the future, sellers and buyers in similar situations may want to think more seriously about this right.

Sellers Need to Be Wary

Remember when AOL acquired Time Warner in 2000? It was a great deal for AOL, which swapped highly inflated bubble stock for Time Warner’s more stable shares. But the deal did not work out so well for Time Warner shareholders. The combined company subsequently lost hundreds of billions of dollars in market value.

Sellers still have not learned that when you are selling a business and receiving stock in exchange, it is really an investment in the buyer. P.&G. certainly didn’t. P.&G. was essentially making a $1 billion-plus investment in Diamond, but failed to do the due diligence that the short-sellers did. Instead, P.&G. appeared to rely excessively on the managerial talents of one person, conditioning the deal on Mr. Mendes staying in place at Diamond before the acquisition completed.

Not only that, P.&G. was too clever by half, as Breakingviews has noted. By going for a more complex transaction that saved on taxes, it almost lost out on a much simpler deal. Complexity increases deal risk and the ability to successfully complete transactions.

Short-Sellers Have a Purpose

No one likes the person at the craps table betting the Don’t Come bet. It is no fun for the rest of us that he or she is betting we will all lose. This is a simplistic but partly valid reason why short-sellers often come in for negative criticism. Some of this criticism may be legitimate when market manipulation is found. The short-sellers’ initial claims of accounting problems at Diamond also froze this deal in its tracks.

Once accounting fraud claims emerge, it is hard for a company to move forward, since it must investigate and clear the charge. Accounting claims, even if untrue, can throw a deal seriously off track, and this may be a problem in the future as short-sellers raise unwarranted claims.

But in this case there appears to have been truth. The Diamond deal shows the value of short-sellers. The problems at Diamond were first spotted by the short-sellers and brought to light. They served a valuable market purpose.

With Time, There May Be Another Buyer

The whisper on the street was that P.&G. was stuck with Diamond because there was no other buyer. But sure enough, not only has one emerged, but Kellogg is paying $350 million more than Diamond would. This is anecdotal proof that buyer assessments of the market and ability to pay are constantly in flux. What was once a barren market may prove to be fertile (with time).

The More Things Change, the More They Stay the Same

Take a look at the Kellogg’s slide deck for its investor presentation on the Pringles acquisition. It looks remarkably similar to the hopeful one Diamond issued back when it announced its Pringles deal in April 2011. Hopefully, Kellogg will have better luck.

C.E.O. Hubris Can Kill a Company

Enough said.

Source: http://dealbook.nytimes.com/2012/02/15/lessons-learned-from-diamonds-pringle-debacle/

Watch out as sovereigns eye company cash piles

Much has been written about how the developed world must tackle its structural budget deficits. But the link that remains to be properly recognised is that the counterparts to those ‘unsustainable’ public-sector budget deficits are equally ‘unsustainable’ corporate-sector surpluses.

The conventional wisdom believes that the current sovereign debt crisis is the result of governments having been too profligate. But it is not that governments have been spending ‘too much’ that is the problem; it is that corporates have been spending ‘too little’. Moreover, because this corporate saving is the main counterpart to the government’s borrowing, until companies start to spend again, the burden of fiscal adjustment will have to fall on cutbacks in public services and higher personal taxation. It is time to shift the debate away from talking about the fiscal position, and focus instead on whether it is a shift in corporate behaviour that is responsible for the fiscal mess in the developed world.

It is very unusual for the corporate sectors to run sustained financial surpluses. Look back at the UK and the US for more than half a century and the corporate sector has tended to be a net borrower, not a net saver.

What has prompted the recent move into financial surplus has been the decision by companies to step away from investment. Investment-to-gross domestic product ratios in the developed world are now close to the lowest levels seen in 60 years. Corporates appear to have decided to run themselves for cash, and not for growth. It is this profound shift in corporate behaviour that policymakers and politicians have been slow to spot. Until this behaviour changes – or is changed – it will be very hard to improve the fiscal arithmetic.

Now this could be a simple cyclical issue. Corporates – like investors – were seduced into believing that the great moderation was the new normal… only to find themselves thrown into a world of unprecedented uncertainty by the credit crunch. Faced with such a loss of visibility and a shortage of external finance, chief executives had no option but to put fixed investment on hold, and de-lever in order to reduce their dependence on the banks. The hope is that as confidence returns, so will fixed investment and job creation, followed in turn by an improvement in public finances. Policymakers should be doing all they can to bring corporates back from a world dominated by uncertainty and into a world where investment plans can be made and risks managed.

But what if the shift in corporate behaviour is structural?

After all, it is rare to have a capital expenditure cycle without a credit cycle. And where is the next credit cycle going to come from if the banks are condemned to multi-year de-leveraging? Besides, if there is any capital expenditure to be done, it is most likely that this will take place in the emerging-market economies rather than in the developed world.

Against this backdrop, it must be tempting for company managements to run the company for cash, with an aggressive share buy-back programme that will help management’s stock options to vest, a growing dividend to keep equity-income fund managers happy, and a compensation committee that makes sure the right people are paid. The kerfuffle over executive pay and rising levels of inequality is not happening in a vacuum; it could be symptomatic of ‘rent-seeking’ behaviour by corporates.

If global business leaders feel there is a growing gulf between the business agenda and the political agenda, it is because corporates are in rude financial health while governments are under the cosh. With politicians at the limit of what they can impose on their electorate, do not be surprised if they turn to those that have the cash. Trailing earnings (in US dollars) of the global quoted corporates are now back to pre-crash levels, while capital expenditure, employment and tax receipts are not, leaving corporates on the defensive. As US presidential hopeful Mitt Romney put it: “Don’t attack the private sector. Don’t attack risk-takers. Don’t attack profit. Profit, by the way, is what allows businesses to hire people and grow.” Many are now questioning whether that is still the case.

In the Reagan-Thatcher era, politicians cut taxes so that companies would come to their country, invest, create jobs … so that those politicians could, in turn, be re-elected. It does not work like that anymore; globalisation has seen to that. The reality is that public services used by the ‘99 per cent’ are taking the strain, while attractive corporate tax regimes are protected. Just as the trade-union barons of the 70s failed to see the writing on the wall, so the global captains of industry may suffer a similar fate unless they put their cash to work in the countries in which they are domiciled.

Source: http://www.ft.com/intl/cms/s/0/bf2b5e92-50be-11e1-8cdb-00144feabdc0.html#axzz1mYi1Q0j0

Dollar bears in for shock if US cuts energy imports

The future of the dollar is more likely to be determined in the shale gas and oilfields of Dakota and Texas than in the sovereign wealth funds of Asia and the Middle East. This is because striking new technological developments are set to transform America’s energy supplies, significantly improving the US balance of payments and the long-term outlook for the greenback.

The US’s current account deficit has been a longstanding drag on the dollar. At the height of the credit boom in 2006, it reached $800bn or 6 per cent of gross domestic product. Though the deficit has halved as the credit crunch has lowered imports, it still stands at 3 per cent of GDP, largely because the US, like the eurozone, Japan, China and India, remains a major energy importer, with annual net foreign oil purchases of $300bn a year. As the US economy slowly recovers, the International Monetary Fund expects the US current account deficit to start rising again. That would lead to foreign central banks accumulating greater reserves of dollars.

But such straight-line forecasts are likely to be challenged as the US’s shale gas and “tight oil” reserves are commercially exploited over the next few years. The US has vast reserves of shale gas but, until recently, energy companies were unable to tap the gas trapped in shale rock. Now, through hydraulic fracturing or ‘fracking’, US reserves of economically available gas supplies have started to rise sharply.

Already the ratio of US gas reserves to annual production has increased from eight years to 12 years. This may not appear substantial when compared to other regions of the world. Qatar, for example, has proven gas reserves well above 100 years of current production. But fracking may allow the US to soon count up to one hundred years of gas reserves relative to current production. That would lead to a major shift in the US’s energy outlook.

In addition the exploitation of tight oilfields through new technology is increasing the US’s domestic oil production relative to imports. This marks a significant departure from the past three decades, when the share of US oil consumption accounted for by foreign supplies rose from around 30 per cent in the 1980s to over 65 per cent by the time the credit crunch began in 2007. In 2010 imports had already declined to 61 per cent of total US oil consumption and are set to decrease further.

More strikingly, the US is starting to export oil again given its increased domestic oil production. Ten years ago, US oil exports were less than 10 per cent of the country’s oil imports. Now they are close to 20 per cent of US imports as local oil output surges. For example, North Dakota yielded more than 500,000 barrels of oil a day at the end of last year, exceeding the production of Opec member Ecuador.

There remain significant environmental concerns regarding the use of fracking to exploit shale gas in commercial quantities. But if America is able to dramatically increase its energy reserves, then it can reduce its reliance on foreign supplies – particularly from volatile regions such as the Middle East.

Over time this would engineer a sharp improvement in the US current account deficit. As the US’s net oil import position accounts for the lion’s share of its balance of payments deficit, increased domestic production has the potential to reduce the US current account deficit from 3 per cent of GDP to lower levels, or even send it into a surplus over the next decade.

The US economy last ran a current account surplus at the start of the 1990s. If the US is able to return to a similar position over the next few years owing to reduced energy imports, it would have three important consequences for financial markets and the global economy.

First, in the foreign exchange markets, the dollar would continue its recovery against the euro and other major currencies that began during the financial crisis of 2008. Consensus forecasts that the greenback will keep on depreciating to rebalance America’s current account deficit will need to be torn up.

Second, the negative relationship between oil prices and the dollar would break down. China and India are still likely to be large consumers of Middle East energy but significantly reduced US foreign oil purchases will limit the growth of the region’s sovereign wealth funds. As a result, their dollar-diversifying activities, heightened when oil prices rise, will be constrained in future.

Third, stronger growth in the US on the back of a more balanced economy would call into question the Fed’s current stance of keeping monetary policy super-loose.

Thus the conventional wisdom of an ever-weakening greenback is likely to become obsolete. Over the next decade, the currency is set to benefit from the US’s reduced reliance on foreign energy. That will be a positive shock for US consumers and companies and a negative shock for long-term dollar bears.

Source: http://www.ft.com/intl/cms/s/0/91501a42-5273-11e1-ae2c-00144feabdc0.html#axzz1mYi1Q0j0

Model economics: The beauty business

ON FEBRUARY 17th London’s spring fashion week begins. Across the capital, young women in vertiginous shoes and skimpy dresses will be teetering along catwalks. And thousands of young doughnut-dodgers will be inspired to queue outside agents’ offices for the slim chance of becoming the next Kate Moss.

Careers in modelling are typically short-lived, badly paid and less glamorous than pretty young dreamers imagine. Yet the business is changing. For one thing, educated models are in. This may sound improbable. In the film “Zoolander”, male models are portrayed as so dumb that they play-fight with petrol and then start smoking. But such stereotypes are so last year.

Lily Cole, a redheaded model favoured by Chanel and Hermès, recently left Cambridge University with a first-class degree in history of art. Edie Campbell, a new British star, is studying for the same degree at the Courtauld Institute in London. And Jacquetta Wheeler, one of Britain’s established catwalkers, has taken time out from promoting Burberry and Vivienne Westwood to work for Reprieve, a charity which campaigns for prisoners’ rights.

Natalie Hand of London’s Viva model agency, who represents Ms Campbell, says there has been a shift away from the “very young, impressionable models”, who were popular in the past ten years, to “more aspirational young women”. “There is an appetite now for models to be intelligent, well-mannered and educated,” says Catherine Ostler, a former editor of Tatler, a fashion and society magazine.

This is new. The best-known models of yesteryear often led rags-to-riches lives, courtesy of the rag trade. Twiggy, a star of the 1960s, was a factory worker’s daughter. Ms Moss’s mother was a barmaid.

But the big fashion houses and leading photographers are tiring of the drama that comes with plucking girls as young as 15 from obscurity and propelling them to sudden stardom. Too often, models were showing up to photo-shoots hours late or drug-addled. This wasted a huge amount of time and money. Fashion houses are now keen to avoid trouble. Many find that educated models show up to work on time and don’t go doolally as often.

Trends in the modelling business also follow those in the global economy. From the 1960s to the 1990s, America reigned supreme. The hottest “supermodels” were Americans such as Cindy Crawford and Christy Turlington. They were figures whose glossy confidence mirrored America’s. They never woke up for less than $10,000. They were cultural icons, too, celebrated in songs such as Billy Joel’s “Uptown girl”, the video of which starred Christie Brinkley, who became his wife.

As in so many fields, the rewards for a handful of stars have shot up. Contracts are wrapped in secrecy, but sources say that a one-off deal for a shoot with a top model can begin at $75,000, rising to $1.5m for a global advertising campaign. For advertisers, the right face is lucrative. Procter & Gamble’s campaign featuring Gisele Bündchen is said to have raised sales of its Pantene shampoo in Brazil by 40%.

The stars pull in more from sidelines such as franchising goods in their own name (Elle Macpherson’s underwear, Kate Moss’s lipstick). Heidi Klum, a German model, serves as a judge on “Project Runway”, a televised fashion-talent contest.

Pay for lesser models has fallen sharply, however. This is partly because the labour pool has globalised and therefore grown much bigger. International agencies now scout for talent in emerging economies. In the 1990s they hired hordes of high-cheeked Slav teenagers. Now the hottest hunting-ground is Brazil, which produces Amazonian height and athletic looks.

Ashley Mears, an American sociologist and author of “Pricing Beauty”, a study of the economics of modelling, says that although the industry has grown in the past decade, individual contracts have shrunk. Too many faces are chasing too few lenses.

Television fees have fallen, not least because technologies like TiVo allow audiences to skip commercials. One British model told your correspondent that rates for the major fashion shows have roughly halved in recent years, and that many careers are now over in two seasons (a calendar year) rather than around six. The Model Alliance, an outfit that agitates for higher wages, estimates that the average regularly-employed model makes $27,000 a year. Part-timers and men make less.

The juiciest prize is to become the face of a luxury brand such as Dior or Burberry. To have any chance, a model must first have magazine shoots under her designer belt. This fact allows fashion magazines to pay peanuts, even for a cover-shoot.

There remains an iron divide between “editorial” models, who appeal to the expensive designers, and “catalogue” models, who are often slightly larger and more conventionally pretty. The catalogue models pose in normal clothes, which is less glamorous. But they earn a steadier income, and are less likely to be dropped by the time they reach their late 20s.

Agents take around 20% of a model’s fee, plus another 20% from the client. Despite these high levies, agencies struggle. Since the financial crash, clients have been scrimping. And agencies must find models whose faces somehow capture the Zeitgeist, as defined by the big brands and their capricious artistic directors.

Large agencies are competing with a crowd of smaller upstarts, such as Viva London and DNA in New York. The giant Elite Model Management agency lost an American antitrust case on price-fixing in 2004 and drowned in a sea of recriminations. It has since been refounded under new ownership, though its Dutch branch faces a fresh lawsuit, brought by the winner of a contest who claims the agency sacked her for putting on weight.

The sheer randomness of fashion makes it a tough business. Change is more predictable in other industries. IT firms, for example, can safely assume that computers will keep getting faster. But foreseeing next year’s hot look is impossible. No one could have anticipated Kate Moss’s early “grunge” look, which set a fashion for tangled long hair, boyish hips and pale complexions. Now the fashion is for models who look a little healthier, such as Doutzen Kroes, a former speedskater.

The exquisitely sensitive Karl Lagerfeld

Despite angry campaigns against the cult of “Size 0”, skinny models are still in demand. This is partly because designers think clothes look better when there is no distracting flesh beneath them. Ms Mears adds that the industry keeps models thin to “signify elite luxury distinctiveness”. Rough translation: if normal women have curves, then the elite want something different. This infuriates those who blame fashion for fostering eating disorders among the young. But the attitude shows little sign of shifting. Karl Lagerfeld, a designer, made headlines this week by describing Adele, a pop singer, as “fat”.

Power in the fashion business depends on fame. “Super-brands” such as Gucci and Burberry don’t hesitate to throw their weight around. Gucci flustered London’s fashion week last autumn by ordering a clutch of the “mega-girls” to leave London early and fly to Milan for a more commercially important show.

Marc Jacobs, a prominent New York designer, caused a further shortage of models for British shows by detaining some prospective bookings in New York. Agents complained, but Mr Jacobs is bigger than any of them. “Where’s the camaraderie?” asked Carole White of Premier Model Management, a London agency. On the catwalk, you walk alone.

Source: http://www.economist.com/node/21547257