Letter from Lex – election fever

Abigael Evans, the four-year old girl who cried because she was tired of “Bronco Bama and Mitt Romney”, will be relieved. Barack Obama’s re-election as US president, however, may not bring similar comfort to Wall Street, which is sorely in need of a truce with the White House. There were signs of peace breaking out with US regulators allowing JPMorgan to proceed with a $3bn share buyback. But HSBC had to set aside more money for its forthcoming settlement with US authorities over money laundering. In Europe, BNP Paribas’ prospects look brighter now that it has freed itself from Greece’s sovereign debt crisis. Other banks have been looking for cheer in China, where the market has doubled in six years yet foreign banks’ profits and market share remain disappointingly low.

Back in the Old World, European companies are still adapting to the financial and eurozone crises. The world’s biggest temporary employment agency, Adecco, is doing fairly well considering high unemployment numbers in the US and Europe. Industrial group Siemens is holding its own in tough markets, promising €6bn in cost savings by 2014. But while EADS is operationally sound, it is in a strategic straitjacket of sorts. Danone certainly has scope to perform better – and that is precisely what activist investor Nelson Peltz will be looking for now he has a 1 per cent stake in the French dairy group.

In the energy sector, meanwhile, Norwegian billionaire John Fredriksen repositioned his oil services group in a $3bn deal to sell SeaDrill’s tender rig business to Malaysia’s SapuraKencana. In renewables there is no sign of a let-up for the world’s largest wind turbine maker, Vestas. At least the cost per watt of installing solar facilities is falling to more economically viable levels.

Next week China selects new members of the Politburo Standing Committee. Wonder who will win that election race.

John Casey, Lex Publisher