There has been a range of reactions to our recent big read urging consolidation on the European telecoms carriers.

By far the most well-argued comes from New Street Research. They think Lex has completely lost the plot.

They were kind enough to send us the detailed dissent below: 

The prime minister has called a snap election for next month to help delay a tax increase. The central bank governor thinks inflation may fall below 1 per cent “for the time being”. The stock market is up a fifth in a month.

Japan is a curious place for an investor at the moment. And yet Japanese equities seem to be one of the great trades of 2015 – if Abenomics works. Lex weighs the merits, in this live session… 

Pulling out all the stops refers not to unstopping a dam for the waters to flow forth, but rather to the opening of the valves on a pipe organ. Japanese prime minister Shinzo Abe, in his bid to revitalise his country’s economy, has delivered much fanfare – and even accompanying liquidity. But, on Monday, third quarter GDP figures suggested that all this sound and fury signified nothing. The economy fell dramatically short of predictions of 0.5 per cent GDP growth quarter on quarter, instead shrinking by 0.4 per cent.

The market was quick to react to the disappointing figure, with Tokyo’s Topix index shedding two fifths of the gains it had made since October’s day of shock and awe. But the yen, another measure of market sentiment, strengthened only half a per cent. It remains 3 per cent weaker than October month end.  

A collection of US and European banks have been fined a total of $3.4bn for attempting to manipulate the FX market, but their share prices have barely moved in response. But there is plenty to worry about. Join us at midday UK time for a live discussion.  

“No more. Please.” Banks keep on whining that they are exhausted by excessive regulation. But judging by the growing number of risky leveraged loans they issued in 2014 there is a case for a new dose of heavy-handed rules to curb their aggressive behaviour.

Take a look at chart by the the Federal Reserve, the Federal Deposit and Insurance Corporation and the Office of the Comptroller of the Currency on the growth of leveraged loans (the red bars). 

Yes, that’s what we all need. Another UK regulatory investigation into banking. It must be at least a year since the last one. So the Competition and Markets Authority has decided that the idea it floated in June – a full scale, 18-month investigation into the UK’s current account and small business banking markets – was a good one.

Here is what the CMA does not like about the way the market works: 

As Lex has discussed many times, private equity firms love to talk about why public investors don’t properly value their shares. A slide from a Fortress Investment Group presentation captures the disconnect.

 

Shares in Marks & Spencer are up 8 per cent as its first half numbers beat expectations and there were (at long last) signs of life in womenswear (up a whole 1.3 per cent!) But dig just a tiny bit deeper and earnings per share are down a tenth. So can we believe in the M&S turnround story? Join us at midday UK time for a live discussion and tell us what you think of M&S’s progress under chief executive Marc Bolland.  

It’s all about the quality these days. Europe’s banks have just come through the ECB’s Asset Quality Review, but with that out of the way, there is cause for concern in Asia.

Third quarter numbers from HSBC and Standard Chartered, the two UK based banks most exposed to the region, make for worrying reading. First, here’s a P&L account released by Standard Chartered last week: 

Cheap as cabbage. Not a well-known expression, but one that may gain currency in the Chinese steel industry. In a month when some grades of rebar traded at vegetable prices on concerns over weakening demand, Maanshan Iron and Steel confounded the bears with a strong set of numbers. The stock has rallied by a fifth since reporting Tuesday night.

The beauty of a cyclical industry with high operational gearing is that only one input needs to improve to have a large impact on the bottom line. So a fall in iron ore prices, which have collapsed as China growth slows, allowed Maanshan to move into profit for the third quarter. The company also forecast that the full year would be profitable, implying a huge fourth quarter ahead.