After two days of contacts with the new CEO of France Telecom, Stephane Richard, and Chief Financial Officer Gervais Pellissier, the Oddo Securities analysts draw conclusions rather reassuring: the new management team "has the qualities needed to improve the social climate within the group, without deteriorating financial goals.
Stephane Richard, who replaced Didier Lombard on 1 March, has confirmed giving priority to the alleviation of social relations within the group.Oddo Securities said in a note published today have felt the new management as "very attentive, controlling well the great social, financial, and fellows of the group and sector, and wishing to show more transparency and sense that commercial shine.
Social criteria are taken into account for the premiums
Among the concrete steps, variable pay (bonuses) for a little over a thousand leaders in France will now be indexed to 50% on financial criteria (against 80% previously), to 20% on quality criteria Services (unchanged), and 30% on social criteria (non-existent before), if possible, quantifiable as absenteeism.
Furthermore, agreement with unions was recently signed to the senior part-time and mobility.And an action plan is provided, internally, to "motivate all the teams around unifying themes, they add, such as quality of service, accountability teams decentralizing some decision-making, improved working conditions, etc..
Management believes these new devices n'impacteront hardly the finances of France Telecom, which has already made "significant restructuring since 2002," says Oddo, who adds that the cost of social concessions is already integrated in the accounting 8 billion euros of cash flow in 2010.
The operational track
Besides the social side, management has raised a dynamic business "still very strong in the mobile in France and Great Britain. The target of 35% ADSL market share in 2010 is maintained.
Investments should be under control, "the group had no problem of saturation of its mobile networks. France Telecom does not accelerate but rather the deployment of 4G from mid-2011 if necessary, "says Oddo.
Considering all this information, the team of analysts expressed confidence in the ability of France Telecom to maintain its dividends "beyond 2011".
Acquisition strategy shy
No big acquisitions in sight. While St?phane Richard wants to promote growth in the long-term actions to respond to the stock market rising, it remains on the defensive. A shift could occur if a major consolidation movement was born.
France Telecom remains focused on some inexpensive targets outside Europe or purchases "in market" in the Old Continent.Oddo suspected a connection between Telenet and Mobistar, or rallying with a fixed player in Spain. In Britain, the broker anticipates that the joint venture Orange / T-Mobile UK will seek a buyer for its fixed network. Ultimately, it is also possible that the joint venture includes a British MNVO (MVNOs) like Virgin Mobile.
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The commodities market is particularly volatile in this weekend. The request by Dubai World, the principal holding company of the emirate, delaying the maturity of its debt worth 59 billion dollars fueling fears of a collapse of the emirate.
Oil prices fall on Friday in the opening exchanges in New York, the price dropping 4.81 dollars to 73.15 dollars, traders worried about the consequences of financial difficulties of the emirate of Dubai on economic recovery .
The announcement by Dubai has cast a pall over the entire finance, equity markets falling heavily Thursday (-3.36% on the European index EuroStoxx50) on all seats worldwide (-3.22 for the Nikkei Friday).Meanwhile, the dollar went back over 1% against the euro to 1.4867 as investors signaling a sudden aversion to risk.
The weaker dollar boosted oil prices and vice versa
It turns out that the dollar and oil, which is priced in U.S. currency, maintain an inverse correlation. A rising dollar is falling and oil prices and other commodities, which is currently the case.
The soaring price of black gold in recent weeks was also based on a general positive sentiment shared by investors in financial markets.Fears emerged with the financial problems of Dubai logically entail a sudden loss of attractiveness of oil.
"Crude oil is still grappling with fundamental bearish, despite the weekly statistics on stocks issued in the United States," said Darin Newsom, an analyst at DTN Telvent on Market Watch. Data released Wednesday showed an expected increase in oil inventories higher than expected.
The ounce of gold was also affected by the downturn in the commodities market, falling 3% to 1157.40 dollars to 10.30.
"We certainly have participated in things that were not correct and we are sorry. We apologize. " This was said boss of Goldman Sachs (GS) Lloyd Blankfein, who tried to extinguish the controversy after his recent interview with London's Sunday Times newspaper in which he said that banks had "an important social "and that his, in particular, worked" in the service of God. " Remarks that he "would not have had to" speak, "he later confessed.
Apologies for the investment bank came at a time when it is subjected to a barrage of criticism. Goldman Sachs has been in effect during the first 9 months of the year the bank's most profitable and the NYSE has already provisioned 16.7 billion dollars to reward traders and executives. Approximately more than $ 500,000 in premium per employee.Astronomical sums deemed by the Americans, but that Blankfein stands by the fact of not wanting to lose his "talent due to a change in methods of remuneration."
So, trying to get closer to its humanitarian principles and the "social role" he defends, Blankfein said the bank would release $ 500 million to help 10,000 small U.S. companies. A collaborative initiative with billionaire Warren Buffett, who will co-direct the panel to oversee the entire operation.In practice, Goldman Sachs will provide annually $ 100 million, or about what he earns in a day of good trading! The Financial Times reports that during the third quarter, the investment bank has recorded 36 days during which its traders have gained daily more than 100 million dollars …
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Banks represent a risk that ultimately the States are obliged to assume, especially when it comes to very large financial institutions. This fact, proved from bank rescues of 2008, coupled with the poor state of public finances in major western economies, has given birth to the idea of additional taxation of the banking sector.
This Friday, the president of the U.S. Federal Reserve has certified the principle. "Any cost incurred by rescue of the government should be covered by a levy on the financial industry, not taxpayers," said Ben Bernanke.
Today, there are already in the United States a fund federal deposit insurance, the FDIC is funded by premiums paid by banks for deposit.The organization monitors the credit risks taken by banks and traditional acts to seize and liquidate those who make the balance sheet (hundreds since the beginning of the year). Not only did the FDIC reached its limits in terms of resources, but it has no counterpart for investment banks, specialized crafts markets, which do not collect public savings. Ben Bernanke would therefore address this deficiency.
The statements by the Fed chief may find an echo in Europe, where governments, or parliaments, are weighing the idea of charging the banks a kind of "insurance premium" in exchange for funding last spring that the State gives them, even implicitly. The Belgian federal budget was the first to explicitly.The United Kingdom is considering the at least one major institution, the Lloyds Banking Group.
In France, the same argument that has been brandished by members (see sidebar). At European Commission Tuesday urged that a dialogue on ways of resolving banking crises, has indicated its preference for funding by the "private sector".
Equity strengthened
In Washington, the debate focuses on the legal means available to the authorities to treat cases of collapse. This Friday, Ben Bernanke highlighted the adoption by Congress of the proposed reform of finance presented by the White House is pressing. The plan for accreditation before the end of the year is not acquired, would allow federal authorities to seize troubled financial institutions, even if they do not have the status of banks.The lack of a framework for such intervention was sorely felt last year when the insurer AIG found itself on the brink of bankruptcy.
Occasionally, this Friday, a conference organized by the Boston Fed, Bernanke also defended the principle of minimum capital requirements more stringent for banks whose health is essential to the stability of the financial system. The Federal Reserve, in consultation with its foreign counterparts, is working to develop rules requiring these banks to raise capital in the form of shares. In all cases, the idea is to shift priority to shareholders and creditors of banks that take risks, to reduce the likelihood of injecting public funds. Bernanke also promised that the Fed would sanction the compensation that would encourage taking undue risks.
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