Markets: Deutsche Bank AG to raise €8bn in advance of European bank stress tests
By Finfacts Team
May 19, 2014 - 2:45 PM

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The Deutsche Bank towers in Frankfurt, seen through artist Max Bill's statue Continuity - - Durch die Statue 'Kontinuität' von Max Bill

Ryanair reports 8% fall in full-year profit; US services to commence in 2019

Deutsche Bank AG, Germany's biggest lender, announced plans on Sunday to sell €8bn of new shares to raise capital in advance of European bank stress tests.

"We are launching a package of measures designed to reinforce Deutsche Bank's aspiration to be the leading client-centric global universal bank," co-chief executives Jürgen Fitschen and Anshu Jain said in a statement Sunday. "We are decisively strengthening our capital, further improving our competitiveness, and investing in targeted growth initiatives across our core businesses."

The bank will issue a total of 360m new shares. The Qatari royal family has agreed to buy 60m valued at €1.75bn via its investment vehicle Paramount Holdings. The remaining €6.25bn will be sold to existing investors via a rights offering.

The planned capital increase is expected to boost the bank's financial strength, its core Tier 1 capital level, to 11.8% of its assets weighted by riskiness, compared with 9.5% now.

IFG Group, the financial services business, said today in a trading statement that performance this year is in line with expectations and its businesses have had a good start to the year.

In an interim management statement for the months from January to the end of April, IFG said that revenue to date in its Irish business is expanding

It expects a return to reported profitability for the full year while funds under management in its IFG Corporate Pensions grew to €979m at the end of April and IFG secured 17 new clients so far this year.

Datalex, the travel software firm, today reported an 18% jump in transaction revenue in the first quarter of 2014.

In an interim management statement issued ahead of its AGM today, the company said it had acquired a number of new customers, including Brussels Airlines, which is a member of the Lufthansa Group, and Air Transat, Canada’s leading holiday travel airline.

Datalex said it was planning to open a new office in Beijing this year to support “both our existing business in the region and our expanding pipeline of opportunities” in China.

Irish Continental Grouptoday reported a 5.8% rise in group revenue to €76.7m for the first four months of 2014. This compares with revenues of €72.5m the same time last year.

In an interim management statement, the Irish Ferries' owner said that earnings before interest, tax, depreciation and amortisation were €2.9m compared with €4.8m the same time in 2013.

ICG said that in the 20 weeks up to May 17, Irish Ferries carried 95,000 cars, a rise of 5% on the previous year.

Aer Lingus Regional today reported that it flew a total of 112,435 passengers last month - - an increase of 35% on the same time last year.

The service, operated by Stobart Air (formerly Aer Arann), saw robust demand for new routes introduced during the year.

The airline said that passengers flying to and from Dublin were up 50% with the Kerry-Dublin route seeing a rise of 38% in April compared to same month last year.

It said that total passenger numbers are up 14% so far this year compared to this time last year.

US housing activity bounces back sharply in April: Conall Mac Coille, chief economist at Davy, commented - - "Stock indices made modest gains on Friday: the Euro Stoxx 50 closed up 0.3% and the S&P500 0.4%. Concerns regarding the economic outlook, particularly in Portugal, weighed on sentiment, offset by M&A activity in the telecoms sector. After an extremely volatile Thursday’s trading, the euro was relatively stable on Friday, trading close to $1.371. US 10-year yields rose by 4 basis points to 2.52% after strong housing market data were released.

Overnight, the UK Rightmove measure of asking prices indicated that house price inflation was 8.9% in May, with prices up 3.6% on the month. Over the weekend, Bank of England Governor Mark Carney indicated that the pick-up in house price inflation is the biggest threat to the UK economy. Having indicated in the May Inflation Report press conference that interest rates are not the right tool to address housing market bubbles, Carney has now firmly placed the onus on the June 17th Financial Policy Committee meeting to take action. Furthermore, deputy Prime Minister Nick Clegg supported the view that the government should pare back the Help-to-Buy scheme if recommended by the Bank of England.

US housing starts rose to 1,072,000 in April, up from 947,000 in March. This is the highest level of activity since November, when housing starts were 1.1m. Furthermore, with building permits at 1,080,000 in April, the pick-up in housebuilding looks set to be sustained into the second quarter of 2014.

April’s data suggest that the slowdown in US housing starts in Q1 2014 primarily reflected exceptionally poor weather conditions through the turn of the year. The alternative explanation was that the pick-up in mortgage rates had hurt demand for housing. US 30-year fixed mortgage interest rates rose sharply to 4.7% in the summer of 2013 as markets anticipated the Fed beginning to taper back its $85bn monthly asset purchases, including mortgaged backed securities.

However, mortgage interest rates have now stabilised, helped by the fall in 30-year Treasury yields towards 3.3%. Similarly, the MBA index of mortgage applications for house purchase has started to pick-up again, rising in May to its highest level since late 2013. So both rising transaction levels and housing starts point to a strong rebound in US construction activity."

US Markets

In New York Monday, the Dow rose 27 points or 0.35% to 16,458.

The S&P 500 added 0.29% and the Nasdaq advanced by 0.20%

US benchmark updates

Asia Markets

The MSCI Asia Pacific Index lost 0.3% in Hong Kong Monday after rising 1.3% last week.

Japan's Nikkei 225 fell 0.64%; China's Shanghai Composite slid 1.05%; South Korea's KOSPI rose 0.08% and Australia's S&P/ASX 200 dipped 1.28%; and in Mumbai, the Bombay Stock Exchange the S&P BSE India Sensex Index rose 1.00% despite a stunning electoral victory by the pro-business BJP.

Europe Markets

In Europe, the Dow Jones Stoxx Europe 600  is up 0.037 in mid afternoon trading Monday.

In Dublin, the ISEQ  is up 2.2%.

Ryanair has jumped 9.94%. Aer Lingus gained 3.08%.

European Benchmarks

Irish Share Prices

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report


The euro is trading at $1.3725 and at £0.8152.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.


The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time high of 11,771 on May 21, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 3.11%, to 1,619 points, Bloomberg report.

On Friday in London the BDI closed up 6 points or 0.59% to 1,027. The index is down 54.90% year to date and up 22.12% in 12 month period.

The index rose by 220% in 2013 to 2,237.

Global rebalancing — the tanker scrapyard index?

Crude oil for June 2014 delivery is trading on the Chicago York Mercantile Exchange (CME/Nymex) at $102.66 up 64 cents from Friday's close. In London, Brent for June 2014 delivery is trading on the International Commodities Exchange at $110.10. The North Sea benchmark accounts for two-thirds of the global market.

Finfacts, July, 15, 2013: US West Texas Intermediate oil benchmark jumps in July - - margin between WTI and Brent falls.

Gold spot price

The spot price of an oz of gold is trading on the CME in Chicago at $1,304 up $10.20 from Friday's closing - - the gold price fell 28% in 2013, the biggest annual plunge since 1981.

Gold had hit a record high of $1,921.15 a troy ounce on Sept 06, 2011.

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