EUROPE

BMW reports declining profits  

2018 was a challenging year for manufacturers in the automobile industry over uncertainty on the US-China trade war and the implementation of new carbon emission standards (Worldwide Harmonised Light Vehicle Test Procedure). As a result, BMW suffered a 7.9% drop in EBIT with profits in the automotive division down by 21.6%. The company however announced plans to restructure and get the best out of newly lucrative markets for the future.  

Source: Financial Times

Exodus of banks from Baltics  

Following the Danske Bank money laundering scandal, Nordea announced it would exit from the Baltic region. This is a concerning news as Swedish banks hold more than 40% market share in each of the three Baltic states. As of now, the regulators are unsure as to who would replace them in the short term.  

Source: Financial Times

Keep an eye on

  • Xi Jinping visiting Europe
  • US-Brazil talks
  • Deutsche-Commerzbank merger talks
  • Hong Kong Dollar’s future

ASIA 

Abu Dhabi halts all new businesses with Goldman Sachs following 1MDB scandal 

Goldman Sachs, the leading investment bank in Abu Dhabi, has been prohibited from conducting any new businesses with Abu Dhabi’s state investment company in the wake of multibillion-dollar embezzlement scandal linked to Malaysian state investment fund 1MDB. The International Petroleum Investment Company (IPIC), a Mubadala unit and former partner of 1MDB, sued GS in November, accusing the US bank of bribing its officials during a “massive global conspiracy” worth $2.7 billion.

Source: Financial Times 

Rising food prices in India maintains wholesale inflation

Wholesale prices increased to a year on year rate of 2.93% on account of rising fuel and food prices, as claimed by government data. The rising food prices will bring relief to farmers who suffered from falling incomes and widespread rural unemployment.

Source: Financial Times

Japanese exports fall for third straight month

AFRICA AND SOUTH AMERICA

Benin’s debut bond issue to test appetite for frontier markets 

Benin will be the 21st nation from the continent to issue sovereign bonds. A trio of banks, led by Société Générale, is managing the bond offering. The bond is expected to mature in 8 years and denominated in Euros and the proceeds will be used to fund infrastructure, digital economy, electricity and improvement in quality of life. They have been awarded a B- rating by Fitch, implying high risks.  

Source: Financial Times

International Energy Agency warns of possible effects of Venezuela chaos on global oil markets

Political problems in Venezuela might affect its exports, thereby causing prices to rise although the IEA did state that the OPEC members have the capacity to step in to meet potential disruptions. However, this comes at a time when OPEC and Russia are cutting production to drive prices up.

Source: Financial Times

Ghanaian Cedi falls by 9.8% this year

NORTH AMERICA

FIS to acquire Worldpay in a $43 billion deal 

Fidelity National Information Services (FIS), a US-based financial services technology company is all set to acquire Worldpay, a UK based firm specialised in online payments, for $43 billion. The deal is to be settled with $35 billion in cash and shares plus Worldpay’s net debt of $7.7 billion. Worldpay shareholders will receive 0.9287 FIS shares and $11 in cash under the terms of the offer. FIS shareholders will own about 53%, while Worldpay holders will own the remainder. 

Source: Financial Times 

10-year Treasury bond yields drop below 2.6%  

The yields went below 2.6% for the first time since January on account of minimum expectations of rate hikes this year. Another factor is US consumer prices growing at their slowest pace in two and a half years in February. 

Source: Financial Times

Written jointly by Sarah Mbiaba, Kaushik PSK, Sahil Bansal, Chaimae Nouina, Sophia Boucher, Leo Bouvier, Deepak Chathoth Narayanan, Kaline Larousse, Nisham Hussain M, Anirudh Parthasarathy and Tejwinder Randhawa.

Disclaimer: This newsletter contains information about Financial markets and college events. This information is not advice and should not be taken as such.