Companies in the news ... and how they were assessed
European banks: powder keg?
Political stability has been “perhaps the greatest export of the City of London”, said Harry Wilson in The Times. Now it has “vanished in the space of a few long days”. But here’s “a cheery thought”, said Alistair Osborne in the same paper: “some things are even worse in Germany”. The country’s financial flagship, Deutsche Bank, is in such trouble that the IMF has just dubbed it “the most important net contributor to [global] systemic risks”. The markets seem to agree that Chancellor Angela Merkel is sitting “on a powder keg of a bank, whatever the efforts of its British boss, John Cryan, to fix it”. Deutsche shares are at a 30-year low, and the cost of insuring against default on its subordinate debt is at a level that “typically triggers alarm”. It seems we are in the midst of an “evolving EU banking crisis”: Italian banks are wobbling, and those in Spain, Portugal and France aren’t “in the rudest health either”. Last week, the American subsidiaries of two European banks – Deutsche and Santander – failed US Federal Reserve stress tests, said the FT. Both were found to have “broad and substantial weaknesses” in their capital planning. According to the European Banking Authority, the continent’s lenders “are sitting on g1trn of soured loans”, said Aimee Donnellan in The Sunday Times. No wonder the post-brexit sell-off has been so “brutal”.
Southern Railway: drastic “efficiencies”
After months of delays and cancellations, “commuters will be anguished to learn” that Southern Railway is bringing in an emergency timetable that will allow it to cancel “another 350 trains a day”, said Annabel Fenwick Elliott on Mailonline. The new schedule, approved by the Government, is due to come into effect on Monday. The South Coast-to-london franchise, operated by Govia Thameslink, blames high levels of staff sickness and industrial action for the ongoing disruption to services. The RMT union counters that it is down to Govia’s “gross mismanagement” of the franchise, combined with “a failure to employ enough guards and drivers”. Either way, incensed commuters may soon have something else to fume about, said Katie Morley in The Daily Telegraph. According to property experts, house prices in Brighton and other towns on the route are looking shaky because buyers are so reluctant to rely on the line. Govia insists these latest cancellations will improve “efficiency”, said Jonathan Guthrie in the Financial Times. “Think how efficient it could be if it ran no trains at all.”
Apple/spotify: calling the tune
Little more than a year after Apple launched its music-streaming service, Apple Music, “things are getting ugly”, said James Dean in The Times. The company’s main rival, Spotify, has taken “several potshots” of late: it claims that Apple is trying to “crush” it. “Now the sniping has escalated into full-blown warfare, with the exchange of testy legal letters each accusing the other of duplicitous practice.” Specifically, Spotify accuses Apple of using its tight control over how third-party apps are sold on the iphone and ipad as a “weapon to harm competitors”, said Tim Bradshaw in the FT. Apple denies the claim, but one can see why Spotify is so agitated. Although it remains the market leader in music streaming, with 30 million subscribers, Apple Music has already “closed the gap” substantially: it has attracted 15 million customers in the year since it launched.