StockBeat: Up Day Punctured by Big Falls in ABN, Imperial

By Geoffrey Smith

Investing.com -- The stench of money-laundering is hanging over Europe’s banks again.

ABN Amro fell 8.5% Thursday after it said Dutch prosecutors were investigating it for possible breaches of anti-money-laundering law, an investigation which reports said encompassed years of transactions by ABN clients.

That put it at the bottom of the local AEX index, on a day when most indices in Europe were enjoying an up day as they bob helplessly up and down on the tide of inconsistent news out of the U.S. and China about their trade dispute.

The benchmark Stoxx 600 was up 0.7% by 5 AM ET (0900 GMT), while the U.K. FTSE 100 was up 1.1% and the German Dax was up 0.6%.

Domestic investors are in no mood to trust to the leniency of the authorities, who slapped ABN’s bigger rival ING Groep (AS:INGA) with a $900 million fine for missing years of illegal payments by its clients – a fine that also reflected the breadth of public hostility to pay levels at the top of the bank.

As a result, ABN shares are now back to within 6% of the three-year low that they hit in August.

The news comes only a day after police confirmed the death of Aivar Rehe, who had overseen the suspected laundering of over 200 billion euros through the Estonian branch of Danske Bank between 2006 and 2015. Rehe was a witness, but not a suspect, in Estonian prosecutors’ investigations.

Danske shares have fallen by more than 60% shares since the scandal erupted early last year. So much bad news has now been priced into the share price that news of Rehe’s death failed to move it.

Sub-par behavior isn’t limited to banks, of course. Ericsson (BS:ERICAs), the Swedish maker of telecoms network gear, fell 0.4% after setting aside $1 billion to cover the cost of settling historical corruption allegations. The company had warned about the potential costs some months back but had so far failed to put a price on them. The final price could be more or less than the provision announced late on Wednesday.

Elsewhere, software group TeamViewer got off to a labored start after its IPO in Frankfurt, the biggest tech IPO in Germany since chipmaker Infineon in 2000. The company’s shares were down 1.0% at 25.05 euros, after listing on Wednesday at a price of 26.25.

TeamViewer’s problems paled in comparison to those of tobacco giant Imperial Brands (LON:IMB), which fell 10.3% after it cut its sales forecast for this year due to “challenging” conditions for its non-traditional products. The merger of Altria (NYSE:MO) and Philip Morris (NYSE:PM) fell apart on Wednesday as Juul labs, the maker of vaping products in which Altria has invested heavily, lost its CEO and suspended U.S. advertising in response to a widening health scare around its products.

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