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* STOXX 600 up 0.1%
* FTSE 100 up 0.2%; CAC, DAX ease down
* Euronext considers Madrid bourse deal
* Qiagen surges as it explores sale
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your
thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net
AIM: BEHEMOTHS RULE (1140 GMT)
Sharp falls in the share prices of fashion group Asos and tonic water maker
Fevertree drinks contributed to dent the average value of trading on London's AIM,
according to data compiled by accountancy group UHY Hacker Young.
"Companies listed on the Alternative Investment Market (AIM) have seen the average value of
the daily trading in their shares fall 18% to £271,120 over the last year (Oct 1 2018-Sept 30
2019) from £328,860", according to UHY Hacker Young.
The finding highlights the massive size and influence of a handful of AIM behemoths on the
market place.
"The Top 10 shares on AIM accounted for 43% of trading by value and ASOS for 10% of all
trading in October", UHY Hacker Young added.
As you can see below, Fevertree, Asos and Burford Capital have had a rough ride in the last
12 months:
(Julien Ponthus)
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ARE EUROPEAN BANKS GETTING NAUGHTIER? (1047 GMT)
Well by the way they have been fined lately for misbehaving, one would certainly be tempted
to think so!
"While U.S. banks were particularly hit by misconduct costs in the immediate aftermath of
the global financial crisis, European banks have been more exposed since 2015", a study
published today by the ECB found.
10 years ago, fines were mainly related to the subprime crisis and targeted mainly U.S.
banks. More recently however, European lenders have been hit the most for misbehaviours such as
sanction violations, money laundering and tax evasion.
See below in the chart how UK, EU and Swiss banks have overtaken their U.S. peers in terms
of fines:
"Past misconduct by banks has weighed on global bank profitability and equity positions over
the last decade, with the related costs amounting to over USD 350 billion or 15% of total bank
equity", according to the ECB paper.
In this light, European lenders can blame their own behaviour for a good chunk of their past
and current misfortunes rather than, say, on tighter regulations, capital requirements and
sluggish growth in Europe.
"Euro area banks' net income could have been one-third higher over the same period without
these misconduct costs, potentially helping strengthen capital buffers, if earnings were
retained", the study reckons.
It's not only about fines denting profits, misconducts costs are also about reputational
effects, compliance costs or higher provision.
"As past misconduct cases are uncovered, conduct redress may put further pressure on euro
area bank valuations", the ECB study found.
Here's the link to ECB page: http://bit.ly/2CVfwas
(Julien Ponthus and Marc Jones)
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OPENING SNAPSHOT: A QUIET AND FLATISH OPEN (0820 GMT)
European stocks are flat at the open.
We are still waiting for some trade headlines to set a directional trend as automakers wait
for Trump to decide whether he will impose up to 25% tariffs on U.S. car and auto part imports.
A top news item for equity markets this morning are Euronext (-0.5%) and the Spanish bourse
BME holding talks about a tie-up which could yet speed up consolidation in the sector after the
battle for the Oslo exchange.
The main market mover is genetic testing specialist Qiagen which is up around 13%
as it reviews a possible sale.
In the UK small cap world, Consort Medical jumped over 40 percent after receiving an offer
from Sweden's Reciphram.
BT, which is now are on Labour’s so-called ‘nationalisation hit list’, is down 1% and
continues to be closely watched.
On that front, interesting to note that while the privatisation of BT was an iconic moment
of Thatcherism, France’s Macron could be on the verge of pulling out a success with the IPO
French national lottery drawing subscriptions from retail investors worth 1 billion euros.
If this goes smoothly this week, more big asset sales may come such as airports operator ADP
and a stake in power group Engie.
(Julien Ponthus)
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EUROPEAN STOCKS IN TOUCHING DISTANCE OF RECORD HIGHS (0632 GMT)
The STOXX 600 is just 9 points shy or 2% from its April 2015 record high as European shares
start the week with a tiny bit of wind from Asia in their sails.
A surprise move by China's central bank to cut a key interest rate triggered speculation
more stimulus was on its the way and lifted markets in the region despite unrest continuing in
Hong Kong.
After securing six weeks of gains in a row despite a challenging Q3 earnings season,
European stocks are expected to start the day slightly higher.
Financial spreadbetters see London's FTSE opening 2 points higher, Frankfurt's DAX up 5
points and Paris' CAC 1 point higher.
(Julien Ponthus)
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(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)
