UNITED STATES/UNITED KINGDOM
“Access to Bloomberg’s 170,000 desk-top machines will dramatically increase our reach.” —Bill Moran, EBS
Seemingly strange bedfellows, the two organizations could complement each other very well.They entered into a collaboration and distribution agreement in May that could bring new competition and innovation to the FX market.
“Access to Bloomberg’s 170,000 desktop machines will dramatically increase our reach,” says Bill Moran, New York-based chief operating officer of EBS.
EBS Trader, a conversational directdealing system, will be offered on the Bloomberg Professional service beginning late in the third quarter of 2003.
“We have the source data that Bloomberg can put into its analytical systems,” Moran says.“This will create a combination of news, market data, alerts and analysis on a single platform that is easy to use for FX professionals at banks, institutions and corporations.”
EBS is trying to make a living in a market where the margin is shrinking, analysts say. By teaming with Bloomberg it could pick up some new low-cost revenue by expanding its customer base.
For Bloomberg to crack into an FX market still dominated by archrival Reuters, meanwhile, it needs a good source of currency quotes, just as it did for corporate bond prices when it started up in 1981. Nearing a mature market in fixed income, Bloomberg needs a new strategy for growth, analysts say. It just might have found one.
OPENING UP DEUTSCHLAND AG
Although the difference between shop floor and management pay is less than in the US and elsewhere in Europe, German companies have traditionally been coy about releasing figures. In the last reporting year just six companies from the Dax 30 released comprehensive information about executive pay in their statements, with a smaller number giving some outline information.
When the code is amended—the original code was enacted only last year—companies that do not give full salary information will have to justify not doing this in a special section of their annual reports. German shareholders are becoming less and less accommodating to ‘fat-cat’ corporate culture and some chief executives in Germany will remember uneasily the shareholder-led ouster last year of Ron Summer, CEO of poorly performing Deutsche Telekom.
Germany has twice the number of individual shareholders it did five years ago, despite the intervening stock market crash. With cozy share crossholdings with banks increasingly unwound, management must tread carefully. Heavens, one day shareholders in Germany may even get to have a say on executive pay.
BANKER UNDER FIRE
Saunders’ misstep has opened up simmering fault lines within WestLB itself, where her high profile has always attracted as much carping as admiration. Saunders, a driven but likeable 40-year old American citizen, joined WestLB four years ago in a marriage of convenience. She brought intimate knowledge of gearing up fuddy-duddy companies by borrowing against their cashflows, a technique made famous in the UK by financier Guy Hands (see below). In return,WestLB put up pots of cheap money generated by its controversial state guarantee.
Critics argued Saunders was as famous for the deals she failed to do as the ones she closed.The PR may have occasionally run ahead of the reality but a trophy list that included financings for Bernie Ecclestone’s Formula One racing operations, a buyout of the Main Street retailer BHS by entrepreneur Philip Green, and the rebuild of national soccer stadium Wembley brought friends in high places—as well as gushing profits for the bank. Saunder’s close links with a high-living, sometimes boorish group of entrepreneurs won’t play well back in recession-hit Germany. Nor does the perception—however misguided—of conflict of interest caused by equity investments in some of the deals financed by WestLB IOUs.
The news caps a miserable few months for Hands. He’s reportedly written off a £50 million private investment he made building a motor racing circuit in the English Midlands, and a private hotel chain run by his wife has struggled. A landmark deal for his new firm Terra Firma—buying up thousands of apartments in the North German city of Cologne—was vetoed by the city council in February. Taken together with Saunders’ woes at WestLB (see above) critics argue this proves that principal finance was just old fashioned leveraged lending in disguise.
Hands is unabashed, still hoping to raise at least £2 billion of the £3 billion he originally slated for Terra Firma, and planning new deals. His latest target is classic Hands territory: a UK waste disposal group.