France 24 reports that PSA Peugeot Citroën,
which has been manufacturing cars in France for over 100 years, has agreed to a
deal that will see both the French government and Chinese carmaker Dongfeng buy
large stakes in the struggling company.
Peugeot announced on Wednesday that its board had approved the agreement, in
which the French government and Dongfeng will each invest €800m ($1.1bn) in
exchange for 14% stakes in the company.
The move marks a huge transition for the carmaker, which up until now, has been
controlled by the Peugeot family. Under the agreement, the family’s 25% stake
and 38% of voting rights will now be reduced to equal both the French government
and Dongfeng’s stakes in the company.
The deal is crucial for Peugeot, which has struggled to stay afloat in recent
years. Despite being France’s number one carmaker and the second largest in
Europe, the company has been hit hard by poor sales, losing €5bn in 2012 and
cutting thousands of jobs.
Dongfeng is based in the central Chinese city
of Wuhan and is one of China’s biggest car producers but is largely unknown
PSA announced on Wednesday net losses in 2013
of €2.3bn compared with a €5.0bn loss in 2012.
"Obviously Dongfeng has nothing to contribute but
cash -- it has no technology, no brand, no overseas operating experiences," said
John Zeng, Shanghai-based analyst with consultancy LMC Automotive, as reported
"This deal is definitely crucial for PSA
Peugeot Citroën to sustain its current operation, but for Dongfeng, it could
mean more risks than opportunities," he said.
One reason, he said, is the uncertain nature of
technology transfers, while Dongfeng's stake in PSA is limited to 14 percent.
That contrasts with compatriot Geely, which in 2010 bought Volvo Cars in its
Economic View: Housebuilding growing
once again; Dermot O'Leary of Goodbody comments - -
"It would be a very large understatement to say that the Irish housebuilding
industry has had a tough time in recent years. Output in the sector fell from a
peak of c.90,000 units to just 8,300 units last year. Indeed, there is reason to
believe that this overstates the level of housebuilding in 2013, as completions
are counted when an electricity connection is made and so actual construction
may have occurred some time ago.
It appears though that this torrid time may be at an end, with recent house
price rises incentivising a recommencement of building activity. The latest
house completions data for January show an annual increase for the first time
since 2006. Commencement data are an even better guide of building activity and
have also been showing more positive signs of late. In the 12 months to December
2013, commencements grew by 17% yoy. Unsurprisingly, Dublin is leading the
recovery in housebuilding, with commencements up by 67% in 2013. Cork (+21%) and
Galway (+12%) also saw increases last year. One shouldn’t overstate the
significance at this stage, given the very low base (4,710 commencements in
total in 2013), but the improvement indicates better times for the housebuilding
We have estimated that housing demand will grow to 26,000-36,000 over the
2021-2026 period, so there is clearly scope for significant growth in
residential output over the coming years."
Independent News & Media: APN announces capital raise & FY13 results;
Rachael Cairns of Goodbody comments - - "APN News & Media announced it is
raising A$132m in equity from its shareholders. This is to help fund the
acquisition of the remaining 50% of its radio businesses that it doesn’t own for
A$246.5m. Independent News & Media has released a statement this morning to say
that it will not be taking part in the APN capital raise and so its stake in the
company will be reduced from 28.95% to 18.61%. The statement notes that INM’s
priority objective is having operational flexibility to reposition itself for
the evolving media market in Ireland. It notes that it remains fully supportive
of the APN strategy and is fully committed to retaining its strategic stake in
APN also reported its FY13 results. Group revenue came in at A$817.2m, -1% yoy.
Group EBITDA was +8% yoy to A$162.8m. On current trading, management notes that
it has been a challenging start to the year, with publishing revenue declines
that have been consistent with H213 and radio/outdoor in line with 2013.
Overall, costs are down yoy. As expected the group has not announced a dividend
Overall, while this news is negative from the perspective that INM will see its
stake reduced, we believe it is favourable that the company doesn’t partake in
the raise given its own balance sheet still remains highly leveraged (we
estimate c.2.7x net debt/EBITDA at end 2014)."
Conall Mac Coille, chief economist at
Davy, comments - - "Stock indices fell slightly on
Tuesday. The Euro Stoxx 50 was down 0.1% and the S&P 500 up 0.1%. Both the
Empire State manufacturing survey and the German investor sentiment release
disappointed expectations, hitting sentiment. The euro gained over half a cent
against the dollar, and is now trading at $1.376.
At 1.9%, UK CPI inflation in January came in below the market consensus for a
2.0% rise. As set out in yesterday’s market comment, aggressive discounting by
retailers in January, coupled with a fall in utility prices, suggested that CPI
inflation would fall below 2%. The pound sterling lost over half a penny against
the euro on the news, with the exchange rate rising from 81.6 pence, to 82.4
In the US, the key releases today are housing starts and building permits data
for January. However, the data will surely be affected by the exceptionally poor
weather conditions at the start of the year. Starts are expected to drop back
from 999,000 in December to 950,000 in January. Overall, the sharp recovery in
housing starts through 2012 and 2013, from a trough close to 500,000 in 2011,
appears to have slowed sharply. That said, starts reached a new fresh high of
1.1m in November before falling back in December. So for now, the impact of the
weather means it is very hard to see whether the US housing construction
recovery has stalled."
In New York Tuesday, the Dow fell 24 points or 0.15% to 16,130.
The S&P 500 rose 0.12% and the Nasdaq added
US benchmark updates
Asia Pacific Index was little changed
Japan's Nikkei 225 fell 0.52%; China's Shanghai Composite
added 1.11%; South Korea's KOSPI dropped 0.20%;
Australia's S&P/ASX 200 advanced 0.29% and in Mumbai, the Bombay Stock Exchange
the S&P BSE India Sensex Index climbed 0.43%.
In Europe, the Dow
Jones Stoxx Europe 600 is down
0.35% in mid-morning trade Wednesday.
In Dublin, the
ISEQ is off 0.19%
Irish Share Prices
AIB Daily Report
Bank of Ireland Daily Report
The euro is
trading at $1.3747 and at £0.8246.
For live currency updates, check the
right-hand column of the Finfacts
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
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.
July 15, 2010, the index fell for the 35th straight session, by 9 points, or
3.11%, to 1,619 points, Bloomberg
On Tuesday in
London the BDI closed up 16 points or 1.42% to 1,146.
rose by 220% in 2013 to 2,237.
Global rebalancing — the tanker
Crude oil for March 2014 delivery is trading on the Chicago
York Mercantile Exchange (CME/Nymex) at
$102.58 up 15 cents from Tuesday's close. In London,
Brent for April 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.
The spot price of an oz of gold is trading on the CME
in Chicago at $1,320.00 down $4.7
from Monday'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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