After being arrested by Japanese authorities on Monday for alleged fiscal fraud, Carlos Ghosn, Chairman of Nissan and CEO of Renault has been temporarily suspended at the head of the company and remains chairman “temporarily incapacitated”. The greater integration of the alliance between Nissan, Renault and Mitsubishi is now left in the air. Furthermore, it generates uncertainty in relation to the corporate governance practices of the alliance.
Alexandre Mato | Rome and Brussels are engaged in a permanent dispute over the 2019 budgets, exacerbated by the lies of the populist Italian coalition. The Commission leaders counterattack with the data in hand. Between 2014 and 2020 Italy will receive almos€43 Bn in European structural and investment funds.
A disagreement on Brexit is a possibility. In this environment it is fair to point out that companies in the UK focused on the local market do not seem too worried about the negative aspects of this scenario, such as UK GDP growth. Strategists at Alphavalue have analysed the performance of 22 UK shares with distinctively domestic “flavour”.
The Conversation | A draft agreement on the UK’s withdrawal from the European Union has been reached between representatives of both sides, alongside an Outline Political Declaration on a future relationship. It remains to be seen whether the British government is able to survive, and gain parliamentary support for the deal. Here, though, academic experts consider what adoption of the 585-page draft Withdrawal Agreement would mean. Read about its implications for Northern Ireland, citizens, sovereignty, the transition, the UK economy and the EU.
Alicia García Herrero | 2018 will be recalled as the year in which the US wake up to China’s economic power through a trade war. The question to ask ourselves now is how this may affect Europe. The first issue to realize is that European and US exports into China are very similar, which points to a potential substitution of American products in the Chinese market but also the other way around, namely substituting Chinese exports into the US by European ones.
Despite the initial euphoria after an agreement was reached with Brussels on the UK separation from the EU, this was not easy for PM Theresa May. This morning, four resignations on her cabinet in just a couple of hours, meant the biggest blow to May’s leadership, and therefore sterling.
The economic slowdown in Europe is being felt in the third quarter companies’ results, which are leaving the stock markets in red. Losses are ranging from 4% to 12%, making the European results season show the worst trend in four years. It is interesting to review the main points that analysts at Morgan Stanley make.
The European Union lived an intense day on Tuesday. UK agreed on deal with the EU, but now the question if it will pass the test. Also Italy announced no changes in budget, while the IMF showed a cautious view. Further confrontation ahead between Rome and Brussels is expected. As commented by analysts at Julius Baer, “the EC is trapped in a philosophy of austerity whilst the Italian government is committed to fulfilling the election promises of a fiscal boost.”
The destruction of wealth in Europe continues and it will surely have political consequences in 2019 elections for the European Parliament. For Chris Iggo, CIO Fixed Income at AXA IM, “there has to be a risk that populists will receive more support.” The pressure from the electorate might be to force change in the way Europe is managed and to take steps to boost growth.
The share price of Deutsche Bank has risen + 9% since 26 October. This reaction is explained by the entry of Hudson since the results for Q32018 were unconvincing and the reaction to the stress tests did call attention. The US hedge fund Hudson Executive Capital has invested 550 M€ to take control of 3.1% of the capital – equivalent to 8.6€/share. Hudson thus becomes the fourth largest shareholder behind the Chinese group HNA (7.6%), a Qatari fund (6.1%) and Blackrock (5%).