Investment Managers Securities Analysts

Bermuda & Cayman

European Stock Markets

European Stock Markets

Source: Bloomberg
Political turmoil and weakening business surveys weighed on German equities in the quarter.

European Markets

• On April 6 the US imposed new sanctions on seven Russian oligarchs including Oleg Deripaska, the owner of United Company RUSAL which is the world’s second largest aluminium company by primary production output. Washington’s sanctions on a slew of Russian security officials, politicians, and tycoons believed to have close ties to President Putin were part of an attempt to punish Moscow for what the US Treasury Department called “malign activity around the globe.” RUSAL’s share price plunged 50.4 percent on the news while aluminium prices rose 6.2 percent.

• On April 12 IAG SA, the parent company of British Airways, announced the company had bought a stake in Norwegian Air Shuttle ASA and was considering making a full offer for the discount airline. Buying Norwegian would eliminate a fierce competitor that has shaken up the airline industry with low-cost long-haul flights and imposed on IAG’s turf in both London and Latin America. Norwegian Air jumped 47.2 percent in Oslo trading while IAG SA declined 1.1 percent in London trading on the day.

• On April 20 Telefonaktiebolaget L. M. Ericsson, the Swedish network and telecommunications company, announced that broad restructurings, a clear out of top management, and cost-savings measures had started to kick in as the company’s gross margin rose to 35.9 percent from 18.7 percent a year earlier. Half the margin improvement came from cost savings and a third was tied to the ramp-up of the 5G-ready Ericsson radio system platform which is key to winning network upgrade deals. Ericsson’s shares soared 17.5 percent on the day.

• On April 26 Deutsche Bank AG announced that the company will scale back its Wall Street presence by reducing US fixed income sales and trading, cut back on the corporate finance business, and put the global equities business under review. The bank said the measures, which effectively abandon ambitions to become a top global securities firm, will lead to a “significant reduction” in staff levels. Deutsche’s share price fell 4.2 percent on the day.

• On May 23 Barclays plc, was said to be in talks to launch a mega-merger with rival Standard Chartered plc. While Barclay’s CEO believes a push back into investment banking is best for the ailing bank, not all the company’s shareholders agree. By floating the idea of a merger, Barclays’ management worked to convince investors that it is still possible for the bank to focus on investments while boosting profits another way (i.e. through a merger). Barclays fell 1.1 percent while Standard Chartered rose 0.4 percent on the day.

• On June 7 shares of UK-based CMC Markets and Plus500 , companies that allow investors to borrow money to bet on the price moves of assets (including cryptocurrencies) without actually owning them, rose on better-than-expected profits and positive outlooks. CMC’s stock rose by 4.4 percent after growing annual profits to the tune of 16 percent by focusing on more active, experienced and often wealthier “high value” clients. Meanwhile, Plus500 said their customers had continued trading things like cryptocurrencies, meaning Plus500 will have an even better year than the company thought. Plus500’s shares rose by 6.8 percent on the day.

• On June 13 the British online fashion retailer’s stock fell 7.3 percent despite growing sales by 52 percent more than in the same quarter last year as investors had expected even better sales. The online retailer said the company has invested in infrastructure and continues to hit new “record levels” of sales and eyes more rapid growth.