LIVE MARKETS-Ocado falls in first day on FTSE 100
* European shares edge lower
* Cable maker Nexans (EUREX: NXSG.EX - news) warns on profits
* Bank CYBG clinches takeover of Virgin Money
June 18 (Reuters) - Welcome to the home for real-time coverage of European equity markets
brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on
Messenger to share your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net
OCADO FALLS IN FIRST DAY ON FTSE 100 (1137 GMT)
The online grocer Ocado joined the FTSE 100 today but is down 4.1 percent in its first day
of trading. Meanwhile GVC, which also joined the top share index, is up 1.6 percent.
As index funds rejig their holdings after an index reshuffle, stocks promoted to the index
have tended to do well, according to analysis by AJ Bell looking at reshuffles since 2013, while
relegated firms have fallen.
But there are some exceptions, like today's with Ocado.
"Anyone looking to deploy this as a trading technique needs to be aware that there are some
spectacular exceptions to the rule, which suggest that momentum players looking to follow
promoted stocks need to take care that they do not buy in when a firm's fortunes are at their
zenith," write AJ Bell analysts.
Here's their compilation of the best and worst performers after promotion to the index:
(Helen Reid)
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AT&T (Sao Paolo: ATTB34.SA - news) /TIME WARNER (Frankfurt: A0RGAY - news) : ANOTHER REASON TO BANK ON M&A (0949 GMT)
With M&A volumes through the roof so far this year, event-driven and merger arbitrage
strategies seem like good bets and the latter's prospects even more so with the regulatory green
light for the AT&T/Time Warner deal, Lyxor argued this morning.
"Overall, this milestone reinforces our strong convictions on merger arbitrage," the SocGen (Paris: FR0000130809 - news)
arm said, adding it should "lead to additional M&A activity as the case contributes to clarify
the rules on vertical mergers."
The AT&T ruling is expected to trigger a wave of mergers in the media sector, which has been
upended by companies like Netflix (Xetra: 552484 - news) and Alphabet (Xetra: ABEA.DE - news) 's Google.
"The day after the above-mentioned court ruling, Comcast (Swiss: CMCSA.SW - news) made an offer for Fox assets on top
of Disney’s, setting the stage for a bidding war," Lyxor noted.
The fact that merger arb can deliver irrespective of the general trend also adds to its
appeal "in the current market cycle lies", Lyxor analysts said.
So far however, "the strategy has performed below our expectations in H1 on the back of
exogenous headwinds; trade wars and the DOJ attempt to block the AT&T vs Time Warner deal
impacting the pricing of vertical deals".
Here's our ATT/Time Warner story: AT&T closes $85 billion deal for Time Warner
Here's Lyxor's performance chart:
And lastly, here's Thomson Reuters (Dusseldorf: TOC.DU - news) data on M&A volumes this year:
(Julien Ponthus)
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MORNING SNAPSHOT: EUROPE ON THE BACK FOOT (0914 GMT)
It looks like there isn't much out there to encourage risk exposure.
Simmering trade tensions and worries that a crisis over migration policy in Germany could
destabilise Angela Merkel's three-month-old coalition government is keeping investors on the
edge.
As a result, European bourses have started the week in the red, extending Friday's fall and
set to erase the gains seen on Thursday when a dovish message from ECB helped the STOXX score
its biggest one-day gain in more than 2 months.
Here's your snapshot:
(Danilo Masoni)
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EUROPEAN SHARES SET TO EXTEND FRIDAY'S DROP, EYES ON NEXANS (0648 GMT)
European shares are set to add to Friday's losses as trade tensions, a potentially
destabilising CSU party vote over a migration plan in Germany and Brexit debate in the UK
parliament keep investors on the edge.
Futures on main euro zone benchmarks were trading down 0.2-0.5 percent, putting the
pan-regional STOXX 600 on track to erase the gains seen on Thursday when a dovish ECB pushed
back expectations for an interest rate hike.
In an otherwise thin day for big corporate news, shares in Nexans are likely to be sharply
hit after the French cable maker warned that an "abrupt deterioration" of its high-voltage
activities was likely to translate into lower profits for the full year.
Eyes will be also on UK banks after mid-size challenger lender CYBG (Frankfurt: 42YA.F - news) agreed a 1.7
billion-pounds deal to take over rival Virgin Money after more than a month of talks.
Other stock movers: DS Smith (Frankfurt: 877238 - news) 's full-year adjusted profit rises 21 pct
For more headlines check out the previous post.
(Danilo Masoni)
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EARLY MORNING HEADLINE ROUNDUP (0549 GMT)
Siemens (BSE: SIEMENS.BO - news) wins $2 bln contract to build new London Tube trains
Renault (LSE: 0NQF.L - news) boss Ghosn wins four-year renewal, narrow pay vote
Britain's Tesco (Frankfurt: 852647 - news) pledges to end all-white board
Hannover Re raises prospect of higher payout ratio
Intesa CEO talking to several investors over wealth management deal
Sprint, T-Mobile plan to file deal application to FCC on Monday
Boeing (NYSE: BA - news) creates one-stop shop for jets and services in Airbus battle
Volvo sets goal of 25 percent recycled plastics in cars from 2025
CYBG on track to clinch Virgin Money deal before deadline - source
MEDIA-Deutsche Post (IOB: 0H3Q.IL - news) to keep e-van unit for at least two years - CEO to FAZ
MEDIA-Thyssenkrupp (IOB: 0O1C.IL - news) shareholders are said to be skeptical of Tata deal - Bloomberg
MEDIA-Nestle (Swiss: NESN.VX - news) joins forces with XPO to build 55 mln stg logistics hub- FT
British M&A booms two years on from Brexit vote
Unilever (NYSE: UL - news) takes stand against digital media's fake followers
Orange (LSE: 0OQV.L - news) , former executives to stand trial over staff suicides
Ex-CEO of France's Carrefour (LSE: 0NPH.L - news) to give up part of payout after pressure
(Danilo Masoni)
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MORNING CALL: EUROPEAN SHARES SEEN MIXED (0523 GMT)
European shares are set to open slightly lower today while the FTSE is seen edging up a bit
with sentiment dampened by worries over a possible escalation of a trade spat between the U.S.
and China.
Financial spreadbetters expect London's FTSE to open 10 points higher at 7,644 Frankfurt's
DAX to open 13 points lower at 12,997 and Paris' CAC to open 7 points lower at 5,494.
Over in Asia, shares fell after U.S. President Donald Trump cranked up trade tensions by
going ahead with tariffs on Chinese imports, prompting Beijing to immediately respond in
kind.
* Ex-Japan Asia down 0.4 pct, Nikkei falls 0.9 pct
* E-Minis off 0.5 pct, dollar eases from 3-wk highs
* China, HK markets on holiday
* Oil pressured by oversupply fears, trade war
(Danilo Masoni)
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