Investment Managers Securities Analysts

Bermuda & Cayman

European Stock Markets

European Stock Markets

Source: Bloomberg
European markets rose but underperformed other Developed Markets amid slowing economic growth.

European Markets

• On January 18 Ryanair DAC, Europe’s largest low-cost carrier, cut its forecast for full-year profit for the second time in three months citing lower-than-expected winter fares and warned that the company may cut forecasts further if Brexit causes disruption. The lower price of fares was partially offset by an increase in the number of passengers flying with Ryanair. Around 142 million people were estimated to have traveled with Ryanair in 2018 – nine percent more than the year before. Ryanair’s shares rose 0.9 percent after the announcement.

• On February 14 Nestlé S.A., the world’s largest food company, reported better than expected annual results and announced plans to review and potentially sell off part of the company’s businesses. In order to position Nestle’s portfolio towards attractive high-growth categories, a “strategic review” of the slow growing cold cuts and meat products business was announced. Activist investors have long been pushing Nestlé to sell off parts of its business and the news was welcomed by shareholders. Nestle’s shares rose 1.6 percent after the announcement.

• On February 21 Danish shipping group A.P. Møller-Mærsk A/S (Maersk) reported Fourth Quarter 2018 earnings in line with expectations but warned a long-running trade conflict between the world’s two largest economies could hamper growth in 2019. Maersk reported a Fourth Quarter loss of $34 million compared to a $32 million profit

in Fourth Quarter 2017. Revenue increased to $10.2 billion from $8.4 billion. Maersk said trade tensions had created uncertainty and could “reduce global container trade growth by 0.3-1.0 percentage points per year in 2019-2020 if US tariffs are increased to 25 percent.” Maersk’s shares fell 10.1 percent on the day.

• On February 25 Swiss pharmaceutical company F. Hoffmann-La Roche AG announced acquiring US biotech firm Spark Therapeutics for $4.3 billion. Spark focuses on gene therapy whereby defective genes are replaced with healthy ones. The technique is relatively new and the treatments for rare, inherited diseases command some of the highest prices in medicine. Spark’s blindness therapy Luxturna is priced at $850,000 per patient and was approved just over a year ago in the US. Roche’s shares declined by 0.3 percent while Spark shares jumped 120.1 percent on the announcement.

• On March 14 Deutsche Lufthansa AG, Germany’s biggest airline, issued cautious guidance for revenue and profitability in 2019 as the airline battles rising fuel costs and strives to erase losses at its budget carrier Eurowings. Lufthansa forecasted revenue to grow by four-to-six percent but sees operating margin slipping from 7.9 percent in 2018 to between 6.5 percent and 8.0 percent for 2019. Lufthansa’s shares fell 6.3 percent on the downbeat outlook.