Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

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Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

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Categorized | Equities

European IPOs test risk appetite


Posted on October 27, 2015

Mailboxes and a mailbag are seen in front of the headquaters of Poste Italiane in downtown Milan, Italy©Reuters

British share registrar Equiniti’s share price fell about 8.5 per cent in the first day of trading on the London stock market after pricing at the bottom of its range in its initial public offering.

The company, which was previously owned by Lloyds TSB and is now backed by the private equity firm Advent, was priced at £1.65 a share but by the close of trading had fallen to £1.51 — the latest example of what has been a difficult few months for initial public offerings.

Volatility in equity markets initially sparked in late summer by concerns about China’s slowing growth rate and expectations that the Federal Reserve would raise interest rates in September, has put a damper on flotations as investors shy away from taking on any additional risk.

Dutch government to float ABN Amro

State to recoup some of the €22bn it ploughed into bailed-out lender

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IPOs have been pulled or repriced across Europe and the US.
First Data, the largest deal in the US this year, priced $2 below its initial range, and fell on the first day of trading, while Digicel, a Caribbean telecoms group, and Albertson, a grocer, pulled their planned flotations in the US.

In Europe, Xella of Germany and Shield Therapeutics, a Newcastle-based pharmaceuticals group, also deferred their IPOs, while Hastings, a motor insurer that floated at the beginning of this month, is trading below its IPO price.

Poste Italiane, the Italian post office and bank that priced last week and began trading on Tuesday, barely moved, with its share price falling 0.5 per cent after the start of trading. The company priced at €8.8bn, which was below the figure of €10bn reported in the Italian press as a potential valuation of the company, although a market participant dismissed that valuation as “aspirational”.

    While initial shareholders got no return on the first day of trading, the fact that Poste Italiane’s share price did not jump avoided the political controversy that surrounded the privatisation of Britain’s Royal Mail. The UK government was widely criticised for undervaluing the company, which rose substantially on the first day of trading.

    “The [Poste Italiane] deal has gone very well, as you can imagine the deal was launched in a volatile environment,” said Claudio Villa, an equity capital markets banker at Citigroup who worked on the offer.

    “There is a degree of IPO fatigue out there but we haven’t seen it with this transaction,” he said.

    Elsewhere, the Dutch government announced on Tuesday that it would sell its stake in ABN Amro before the end of the year in an attempt to recover some of the €22bn that it spent bailing the bank out during the financial crisis.

    In a letter to the Dutch House of Representatives, finance minister Jeroen Dijsselbloem said NL Financial Investments, the body in charge of the bank, had said the three conditions necessary for an IPO had been met.

    “The financial sector is sufficiently stable for a sale, there is sufficient interest from the market and ABN Amro is ready for a sale,” he said.

    This article has been amended to correct an earlier statement that Covestro, the spin-off of Bayer’s material science group, is trading below its IPO price.