Stock markets in Europe and Asia unimpressed after meta-shock

Takeover of Aareal Bank collapsed

A stand of Aareal Bank at the real estate fair Expo Real in Munich, October, 2021.

Alexander Pohl / www.imago-images.de

(dpa) The takeover of Wiesbaden-based Aareal Bank by financial investors Advent and Centerbridge is off the table. The minimum acceptance threshold of 60 percent had not been reached, its special purpose vehicle Atlantic BidCo announced on Friday evening after the stock exchange closed in Frankfurt. The offer has therefore expired and will be reversed.

The CEO of Aareal Bank, Jochen Klösges, regretted the failed deal. “We supported the offer because, from a strategic perspective, it was in the best interest of the company and its stakeholders,” he said, according to the statement. But now the bank wants to drive its own growth.

Under pressure from investors, Advent and Centerbridge had previously increased their offer for Aareal Bank from EUR 29 to EUR 31 per share. In addition, in mid-January they lowered the minimum acceptance threshold for their offer from 70 to 60 percent of the notes. By January 19, they had only been offered a good 19 percent of the Aareal shares at a price of EUR 29 each.

VW wants to stop almost all night shifts at the main plant due to the chip crisis

(dpa) The tough supply crisis for microchips and other important electronic components will probably force Volkswagen to cancel almost all night shifts at its Wolfsburg headquarters from mid-April. This became clear on Friday at a meeting of the working hours commission, as the company was able to hear.

According to this, in the time after the Easter holidays, the world’s largest car factory will initially only work on one assembly line, including at night – everywhere else there will probably be two instead of three shifts. The background to this is the continuing serious shortage of parts for semiconductors. This has been leading to supply bottlenecks throughout the industry for months and is blocking production and deliveries, especially in the vehicle industry.

At VW, there is talk of a “dramatic underutilization of the main plant”, which now has “tangible consequences for the previous shift system”. According to the plans of the management, all night shifts of the employees in the production of the central model Golf will soon be eliminated. The works council expressed reservations. “We have taken note of the company’s intentions,” said Chairwoman Daniela Cavallo.

About the report: How do semiconductors and microchips work and why are they “systemically important”?

Government bonds are emerging from negative territory

tsf. The wind is turning on the financial markets: inflation, interest rate hikes and discussions about further steps by the central banks are causing the general interest rate level to rise. For the first time in years, investors are getting money for certain loans to the state. In Switzerland, the 5-year yield rose into the green on Thursday. In Germany, the yields on five-year German bonds also briefly turned positive on Friday (February 4) for the first time since 2018. They reached a level of 0.02 percent just before 9 a.m. Investors are apparently expecting rate hikes later this year. ECB President Christine Lagarde admitted on Thursday that high inflation was worrying.

German 5-year bonds are also up for the first time

Yield in percent

Bonds with shorter maturities reacted the most on Friday. Bonds with longer maturities had previously anticipated possible rate hikes. For example, on January 19, 2022, the yield on the ten-year German government bond turned positive again for the first time since the beginning of May 2019, with a plus of 0.017 percent.

In Switzerland, capital market yields have also broken through the zero percent mark for the first time in around three years. Last December, the yield on 10-year Swiss rates rose from below -0.30 to above 0.00. The Confederates of 5 years reached the green area on Thursday (February 3). It is noteworthy that even Confederates with a remaining term of three years are once again generating a positive return on Friday. In the US, government bonds have long been well above zero.

US labor market creates more jobs than expected

(Bloomberg)/tsf. In the US, firms added more jobs than expected last month, despite the rise in Covid-19 infections and partial business closures. Non-farm payrolls rose by 467,000 in January, according to a Labor Department report on Friday. The unemployment rate rose to 4% and the average hourly wage jumped.

The data supports Fed Chair Jerome Powell’s statement last week that the job market was strong. The central bank accordingly confirmed its intention to raise interest rates in March to combat the highest inflation in almost 40 years.

The Labor Department’s report also showed that average hourly wages rose 0.7 percent in January, up 5.7 percent year-on-year. This further fueled inflation concerns.

Because the probability of rapid interest rate increases increases with the new labor market data, the stock exchanges reacted with further discounts.

The stock markets are in the red

The Asian stock exchanges were also unimpressed after the meta-shock on Wall Street.

The Asian stock exchanges were also unimpressed after the meta-shock on Wall Street.

Ahn Young-Joon / AP

till After the price slide on Wall Street triggered yesterday by the Facebook group Meta, the stock exchanges in Europe and Asia appeared to be rather robust on Friday morning (February 4th). The main reason for this was the after-hours figures published by Amazon. The announcement of a price increase for the streaming service Amazon Prime triggered fireworks with a plus of 14 percent in the share of the internet giant. In addition, the makers of the photo app Snapchat were able to provide positive news with fresh business figures on Thursday evening. This has also had a positive impact on the technology sector.

By 9:45 a.m., the SMI was up around 0.1 percent on the previous day. The shares of Lonza and Novartis rose the most with 0.9 percent. The weakest performer was Holcim, whose shares lost around 1 percent. The DAX and the Euro-Stoxx 50 also started with a plus compared to the previous day when the stock market opened, but have since lost slightly. The DAX lost around 0.6 percent and the Euro-Stoxx 50 0.2 percent. The stock markets in Asia also started the day positively. The Japanese Nikkei index is up around 0.7 percent on the previous day.

Shortly before Friday noon, all the important indices fell into the red. Investors are cautious, it is not enough for a general change in mood. The Swiss SMI was down 0.5 percent at 1 p.m. The DAX even lost 1.6 percent. The Euro Stoxx 50 was 1.5 percent in the red.

When the US Department of Labor presented surprisingly good data on the labor market at 2:30 p.m., this pushed stock prices further down. Because a well-performing labor market increases the probability of rapid interest rate hikes in the USA. Rising interest rates are considered unfavorable for the stock markets. By 3 p.m., the SMI had fallen to -0.9 percent, the DAX to -2 percent and the Euro-Stoxx to -1.8 percent. In the USA, the Dow Jones index was also in the red at the start of trading (-0.3 percent). The Nasdaq Index caught up a bit with a gain of about 1 percent from the previous day’s sharp diver.

Credit Suisse is withdrawing from nine African countries

tsf. Credit Suisse is withdrawing from nine African countries. The private banking customers in these markets are to be handed over to the British bank Barclays. Credit Suisse announced that it has signed an agreement with Barclays on the onward transfer of private banking clients in sub-Saharan Africa. As the Bloomberg news agency writes, the Ivory Coast, Ghana, Nigeria, Kenya, Mauritius, Tanzania, Zambia, Botswana and the Seychelles are specifically affected. Credit Suisse is not withdrawing from South Africa alone.

The agreement with Barclays is part of Credit Suisse’s plan, announced in November, to divest certain non-core wealth management markets.

Overall, assets worth around 2.5 billion dollars could be transferred to the British competitor, as Bloomberg writes, citing insiders. The ultimate price of the deal will depend on how many clients choose to move their wealth to Barclays. Barclays Private Bank said in a statement that it had signed a referral agreement with Credit Suisse.

Snapchat numbers reassure investors after Facebook crash

The Snapchat company has a good laugh: the number of users is increasing, and so is sales.

The Snapchat company has a good laugh: the number of users is increasing, and so is sales.

Lucy Nicholson/Reuters

(dpa) The makers of the photo app Snapchat have been able to convince skeptical investors with fresh business figures. On Thursday (February 3), investors had the shares of the operating company Snap collapse by more than 23 percent in the wake of the Facebook share price crash. But when Snap presented its own numbers after the US stock market closed, the mood changed. The price jumped more than 47 percent in after-hours trading within minutes.

The number of daily active Snapchat users rose from 306 to 319 million within three months. Snap also increased sales last quarter by 42 percent year-on-year to $1.3 billion. The bottom line was a profit of $22.5 million after being in the red from $113 million in the same quarter last year. For the current quarter, Snap has announced sales of a good one billion dollars.

The Facebook group Meta had lost more than a quarter of its value on Thursday. The price drop was triggered by the first decline in the number of daily active Facebook users and investors’ disappointment with the sales forecast for the current quarter. Shares of Facebook competitors like Snap also fell under the wheels.

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