Paul Murphy

paul.murphy@ft.com

Biography
Latest posts

Paul Murphy is the founding editor of FT Alphaville and an associate editor of the Financial Times. He joined the FT in London in 2006 as development editor of FT.com, concentrating on the expansion of the online business. Prior to that, he served as the Guardian’s financial editor for seven years. He has also held senior positions in business journalism at the Sunday Business newspaper and the Daily Telegraph. Murphy is a graduate of the London School of Economics.

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Putting Draghi in his box, and getting him back out again

A week ago, Mario Draghi set euro policy-watchers all a-flutter, departing from his prepared remarks at Jackson Hole to issue a kind of blunt confession that he and his colleagues had run out of excuses for the ongoing depressed level of inflation across the eurozone, and that maybe some sort of reaction was required. Cue a quall of ECB QE speculation.

Then, on Wednesday this week, a story appeared on Reuters stating that, according to “ECB sources,” there was unlikely to be any new policy action from the ECB at its September meeting next week unless August inflation figures (published on Friday) showed the eurozone sinking significantly towards deflation.

The story remained exclusive to Reuters. But the message was clear: ECB officials are worried that market participants were reading too-much-too-soon into Draghi ad-libbing. Read more

Sharon Bowles, ‘side-shifter’ (updated)

News from the London Stock Exchange, released in deepest August, that it had hired Sharon Bowles, former chairwoman of the European parliament’s economic and monetary affairs committee, as a noddie rather failed to generate much coverage or comment at the time.

But it hasn’t escaped the attention of Sven Giegold, a German green MEP. He’s fired off an angry missive. Read more

A sell-side take on the corporate fat cattery debate…

Here’s a curiosity. The European consumer staples research team at RBC Capital Markets have taken a detailed look at executive remuneration across the key companies in their sector, with James Edwardes Jones and Mirco Badocco examining the links (or lack of them) between pay packets and shareholder returns, suggesting a few ways executive pay might be better structured.

This is unusual. While the press (and especially the British press) has harped on about executive salaries for a good 20 years, specialist sector watchers in the financial sector have generally ignored the issue, despite the exponential increase in top salaries since the days of Cedric the PigRead more

Bob’s back

8am on Wednesday sees a resumption of trading in Atlas Mara Co-Nvest, the cash shell that Bob Diamond floated in London last December, with a view to building a chain of banks across the African continent.

Atlas Mara is no longer a shell, of course. The shares were suspended for five months while Bob & Co raised $300m (against an initial target of $400m) and then completed the acquisition BancABC and African Development Corporation. This gives Atlas Mara a base network across Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. It’s also trying to buy the commercial arm of BRD, the development bank of Rwanda. Read more

Markets Live limps back to life…

Summer’s over, right?  Read more

Barclays, the banking and serial defendant combine

The Group faces legal, competition and regulatory challenges, many of which are beyond the Group’s control. The extent of the impact on the Group of these matters cannot always be predicted but may materially impact the Group’s results of operations, financial results, condition and prospects…

There’s not much that’s actually new in a base prospectus published by Barclays on Thursday, covering a future $60bn debt programme. But what the document does offer is a compendium of all the litigation and regulatory action the bank faces around the world. Read more

Best keep an eye on @courtneymoscow…

Here’s some Tina Fordham while we await developments… Read more

On the concerns facing directors of a major Russian energy company, right now…

The agenda of the Board of Directors meeting includes the following items:

1. Participation of Inter RAO in other organizations.

2. Liquidation (termination of activities) of a representational office of Inter RAO in the Republic of Cuba, and amendment of the Charter of Inter RAO related to the liquidation of a representational office.

3. Approval of the Insurance Program of Inter RAO for the year 2015.

4. Consideration of the report on the Company’s compliance with the legislation of the Russian Federation in the field of insider information and market manipulation for the 2nd quarter of 2014.

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An Abil implosion

Jo’Burg-listed African Bank, known as Abil, seems to be failing faster than BES…

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A rear-guard Kazakh defence?

For a potential $7bn plus takeover battle, the attempt by National Company KazMunaiGas (NC KMG) to acquire full control of the London GDR-listed associate KazMunaiGas Exploration Production (KMG EP) has failed to generate much discussion.

Maybe it should given that NC KMG, which is 100 per cent owned by the Kazakh sovereign wealth fund, has offered just a 15 per cent premium to take out the the 37 per cent of KMG EP it doesn’t already own. Read more

Banco Encephalopathy Spongiform

Relisted in Lisbon, Banco Espirito Santo, down 45 per cent at pixel…

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Banco Espírito Santo: call a policia?

Following the disclosure of the exposures to Espírito Santo Group to the market on July 10th, 2014 the Board of Directors learned about the existence of two letters issued by Banco Espírito Santo in favour of creditors of Espírito Santo International, which had not been approved in accordance with the internal procedures in place at the Bank and was not registered in its accounting records as at June 30th, 2014.

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“Another two weeks and we’ll take out the 1929 instance”

That’s permabear John Hussman, who simply refuses to capitulate. Some extracts from his latest letter…

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000. The median price/revenue ratio of S&P 500 components is already far above the 2000 level, and the average across S&P 500 components is nearly the same as in 2000. The extent of this bubble is also partially obscured by record high profit margins that make P/E ratios on single-year measures seem less extreme (though the forward operating P/E of the S&P 500 is already beyond its 2007 peak even without accounting for margins). Read more

RBS — the bank that outperformed

From Lex Live at noon on Friday…

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STAN: “We do not accept these media rumours”

We should just note the livid statement from Standard Chartered on Thursday morning…

The Board of Standard Chartered PLC “The Board” notes rumours in some media outlets on succession planning for the Group Chief Executive, and Chairman. Read more

On Russian sanctions and Belgian beer…

Given that Russian subjects are reportedly being force fed a diet of Putin-esque mis-information over the downing of Malaysia Airlines Flight 17, it seems worth noting what strategists employed by Russian investment banks are saying about the threat of deeper sanctions against Russia.

Here’s Charlie Robertson, global chief economist at Renaissance Capital (emphasis ours)… Read more

Camp on camera – I

Here’s a two-part round up of the videos produced at last week’s Camp Alphaville festival in London. We hope it was fun and informative for those attending. Next year we’ll fix the audio, have wifi that works and we might even introduce an evening dinner…

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An introduction from Cardiff…

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Camp on camera – II

Izy talks cryptocurrencies and a future cashless society…

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The 6am London Cut

Markets: The meteoric rise of Cynk Technology, a former penny stock which appears to boast one employee and no reported revenues, stalled abruptly on Thursday when shares of the would-be social media company tumbled by as much as a third. Cynk listed for 5 cents a share in May and then saw its shares multiply by 36,000 per cent to give the practically unknown company a market value of $6bn – more than Sina, the Chinese operator of Weibo, a microblog with more than 100m active users. (Financial Times)

Banking: Barclays is ditching the role of the traditional bank cashier as part of its efforts to overhaul high-street banking as customers increasingly use digital services. The bank said its 6,500 cashiers would take on new positions focused on giving customers advice on managing their finances rather than processing simple transactions. (Financial TimesRead more

The 6am London Cut

Markets: The influential head of the US House Financial Services Committee has called on US Treasury secretary Jack Lew to investigate whether sweeping financial reform has impaired the $10tn market for US corporate debt and risks amplifying an interest rate shock for large companies.In a letter sent this week to Mr Lew, Congressman Jeb Hensarling argued that it was the responsibility of regulators to ensure that the Volcker rule, a core element of the Dodd-Frank financial reforms that bans banks from proprietary trading, does not harm US capital markets. (Financial Times)

UK ministers, led by business secretary Vince Cable, have ordered a review into the sell-off of state assets, just days before MPs publish a report that is expected to criticise last year’s privatisation of Royal Mail. Lord Myners, former City minister, will lead a panel of experts to examine alternatives to initial public offerings for privatising state assets, as well as whether the process of gauging what investors are willing to pay for shares can be improved. (Financial TimesRead more

Disrupting the rating agencies

Is this an S&P/Moody’s/Fitch killer? Maybe, in time.

Credit Benchmark, a London-based start-up, on Wednesday completed a $7m venture capital financing round, led by Index Ventures, to fund its initial expansion into the $6bn credit risk information market. Read more

A price spike story

The FCA is in danger of attracting regular readers to its Market Watch newsletter. Here’s an extract from Edition No. 46, about this momentary spike in the price of HSBC back in January…

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Welcoming Matomy, with eager anticipation… (updated)

Sorry, at pixel the doc was still not available for the leading digital performance-based marketing company, Matomy Media, which is joining the London market. We’ll update this post if and when we can. The Matomy Media prospectus has arrived (Wednesday, belatedly), so we can replace the placeholder image with the real doc…

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A Shire bump

Click to read:

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Probe Gotham? Er, no. Gowex is bust

On Tuesday, US short selling specialist Gotham City Research declared Spain’s Let’s Go Gowex to be a fraud. When the shares collapsed, triggering a suspension, the immediate response of regulators at Spain’s alternative stock market regulator, the Mercado Alternativo Bursatil, was to fire off angry missives to America’s SEC and the UK’s FCA. It wanted to “determine if there have been illegal operations” on the part of Gotham and its managers.

Lo and behold it looks like any illegality may just have been a little closer to home. Click to read (spanish)…

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The 6am London Cut

The Last Camp Alphaville Promo of 2014. The fun starts at 11am today. Pack cash.

The Cut is taking a short break for the rest of this week while we clear litter and (some of us) eat hotdogs. Read more

A warm welcome to Fundsmith Emerging Equities Trust

Wait! This post has been mis-tagged.

Terry Smith has achieved the rare feat of publishing a flotation prospectus before dealings actually commenced. Read more

A belated welcome to Allied Minds

This IP specialist, sitting on the end of an $XXbn R&D pipeline from American universities and the US military, quietly floated in London last week. As a private entity, Allied Minds has been funded to date by Neil Woodford, the star manager who is now setting up his own firm. But the conditional public market price has so far stuck at the initial float price — 190p.

Maybe giving more information to a wider pool of investors will help… Read more

A belated hello to Zibao Metals Recycling

This wannabe penny dreadful — ‘reselling’ copper and aluminium into the Peoples’ Republic of China — escaped our notice last week.

That’s fixed now. Read more

A belated welcome to Zoopla

We were all experts on this one before the prospectus even went to the printers. But here, for the record, is the Zoopla doc…

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