|Bid||4.1470 x 200000|
|Ask||4.1460 x 110000|
|Day's range||3.9900 - 4.1950|
|52-week range||2.8040 - 6.8320|
|Beta (5Y monthly)||1.95|
|PE ratio (TTM)||34.97|
|Earnings date||05 Nov 2020|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||07 May 2020|
|1y target est||11.78|
(Bloomberg) -- Chancellor Angela Merkel is pushing for a partial lockdown in Germany that would include closing bars, restaurants and leisure facilities through the end of November, as coronavirus infections continue to surge across Europe.Merkel is also urging citizens to keep social contacts to an absolute minimum and avoid all non-essential private travel, according to a draft federal government briefing paper obtained by Bloomberg.Germany will help companies affected by the toughest restrictions since the end of the spring lockdown by making up to 10 billion euros ($11.7 billion) in aid available in November, when the measures will be in place, according to a person familiar with the matter.The chancellor, who has struggled to forge a national consensus in recent weeks, will seek an agreement with regional premiers on Wednesday in Berlin. The meeting, which is under way, was expected to be contentious, with some state leaders signaling opposition to the measures.Like many of her European counterparts, Merkel’s hand has been forced by a spike in virus cases that has been gathering pace since the start of August, fueled by travelers and people failing to observe hygiene and distancing rules. French President Emmanuel Macron is also set to announce tighter restrictions when he addresses the nation on Wednesday evening.Merkel has pledged to do all she can to avoid imposing another lockdown as strict as the one that hammered Europe’s biggest economy in the second quarter.The latest steps -- which would take effect on Monday -- are designed to stem the spread of the disease while broadly allowing activity to continue. They’re likely to provoke protests from industry groups and from citizens already weary of what they see as government intrusion into their private lives.Bloomberg Economics estimated that the impact of the measures will likely be much lower than the April lockdown, but still depress German output by about 0.6 percentage points in the fourth quarter.What Our Economists Say“Germany won plaudits for its handling of the first wave of the pandemic. The question now is whether the fresh restrictions will do enough to halt the spread. The risk, of course, is that the number of infections continues to climb and results in further economic damage”\-- Jamie Rush and Maeva Cousin, Bloomberg Economics. Read the full INSIGHT here.Germany’s benchmark DAX Index fell as much as 4.2% and the Stoxx Europe 600 Index sank 3%, with auto and construction shares seeing the steepest declines. Haven assets, such as Treasuries and the yen, rose.While most economists and investors still think the European Central Bank will wait until December to expand its bond-buying program, news of tighter curbs put them increasingly on guard for surprise action as early as Thursday.Some states may refuse to back all of Merkel’s proposals, and they have already prompted a vice president of the lower house of parliament to declare that he won’t follow the new rules.“I urgently warn against alarmism, which can also lead to erroneous decisions,” Wolfgang Kubicki, a Bundestag vice president from the opposition Free Democrats, said on Deutschlandfunk radio.The government briefing document notes that effective contact tracing has become impossible in many parts of Germany. Without further restrictions, exponential growth in the number of infections would overburden the health system within a few weeks and lead to a significant rise in serious cases and deaths, according to the proposal.Merkel’s government is also planning to extend and enhance assistance for sectors especially hard hit by the restrictions, such as hotels, restaurants, travel agencies and event management, Economy Minister Peter Altmaier told lawmakers. Aid for the self-employed and those working in the arts is under discussion, he said.“We’re in a very difficult situation, the infection numbers are exploding,” Altmaier said in an interview with ARD television. “It’s a threat to the health system and therefore to human life and that’s why policy makers must act.”Germany’s new coronavirus cases rose Wednesday by a record 14,964 to a total of 464,239, according to data from Germany’s public health institute.“We are currently in a critical phase of the pandemic,” Health Minister Jens Spahn said after the cabinet approved new measures including expanding laboratory testing capacity and support for working parents. “The situation is serious.”While the situation in Germany is deteriorating rapidly, governments elsewhere in Europe are faced with even more alarming increases in infections and deaths.French officials favor a one-month lockdown starting midnight Thursday, BFMTV reported, without identifying the source of the information. It will be more flexible than the initial shutdown in the spring, the report said.French deaths linked to the virus jumped by 523 to 35,541, health authorities reported Tuesday, the biggest daily increase since April 22.As governments grapple for an effective response, European Commission President Ursula von der Leyen stepped in with a set of proposals ahead of Thursday’s conference call with European Union leaders.The measures include improving the flow of real-time data between member states, implementing rapid testing, expanding the use of mobile tracing apps, nudging countries to speed up vaccination strategies and creating common protocols to restore safe travel.(Updates with company aid, economists comment, latest market reaction)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Gold rose on renewed optimism for a preelection aid package in the U.S., while the dollar fell to a one-week low.House Speaker Nancy Pelosi said a bill for a compromise stimulus package is being written as she awaits a key phone call with Treasury Secretary Steven Mnuchin. Senate Majority Leader Mitch McConnell said his chamber would take up a comprehensive coronavirus package if an accord is struck. The Bloomberg Dollar Spot Index headed for the third straight decline.Pelosi said in a Bloomberg Television interview that while there are areas where more work is required to get a compromise, she was pleased with the Trump administration’s latest position on coronavirus testing and tracing. The two sides are also “in range” on other health care provisions, she said.“The market will no doubt follow the talks in Washington very closely,” Commerzbank analyst Daniel Briesemann said in a note. “Gold could profit in the event of a deal because the U.S. dollar would presumably be in less demand then and would probably depreciate.”Spot gold rose 0.3% to $1,910.56 an ounce at 3:37 p.m. New York time after falling as much as 0.5%. Gold futures for December delivery on the Comex rose 0.2% to settle at $1,915.40.The dollar index dropped as much as 0.4% to the lowest since Oct. 13.Spot silver climbed 1.5%, while platinum and palladium gained.The passing of Tuesday’s deadline may have a short-term impact on gold, but “overall the market looks a bit stale, with the outcome and the impact of the U.S. election being an even bigger headache,” according to Ole Hansen, head of commodity strategy at Saxo Bank A/S.The price of the metal held in a narrow range this month amid the fraught Washington talks with investors waiting on the result of the election to provide direction. A Democrat victory should spur a rally for gold on bets for a larger stimulus for the economy, Phillip Futures Pte. said Tuesday in a note.Talks between Britain and the European Union over a post-Brexit trade deal are mired in a stalemate after a call between the two sides’ chief negotiators concluded without a breakthrough.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Europe desperately needs its banks to function better. Low profitability, decrepit technology and a new wave of loan losses threaten to hobble even the continent’s strongest lenders. Share prices are close to historic lows. In this environment, it’s tempting for those in better shape to snap up their cheaper rivals. But banking bosses should think carefully before empire building.Europe’s political leaders are anxious to prop up their national finance champions, which once ranked among the global banking elite, and to weed out the weaklings. Bank loans finance more than 80% of corporate and household borrowings in the euro zone, compared to slightly more than half in the U.S. During a pandemic-induced recession, Europe cannot afford a lending malaise.With no end in sight to the monetary easing that has crushed profit margins, a fragmented market with too many bank branches should be perfect for consolidation. Bad loans arising from Covid-19’s economic carnage will eat into already miserly returns for years. In the meantime, competition from fintech and big tech companies will intensify.Unfortunately, while some mergers might shore up returns and improve bank resilience, scale hasn’t always helped European lenders. Analysis by Credit Suisse Group AG shows that return on equity — a measure of profitability — in 2019 was higher among smaller banks than larger ones.The other problem with mergers is that most banks still need to get their own houses in order before landing someone else with their problems. Expenses remain stubbornly high throughout the industry and legacy technology needs replacing. It might be easier to tackle this ahead of the politically charged process of combining two companies.Take the rumors of a possible combination between France’s BNP Paribas SA and smaller domestic rival Societe Generale SA. Analysts at Morgan Stanley say a merger would allow “material” cost cutting in the two banks’ domestic retail businesses and some savings in investment banking. The two firms could pay for the deal in part by selling assets such as SocGen’s Russian activities. A French domestic market share of about 20% shouldn’t unduly worry competition authorities.However, the better-run, steadier BNP would have to take on the mammoth task of integrating another bank’s dated technology, while adding little desirable diversification and SocGen’s inferior balance sheet. When measured against its capital, SocGen is sitting on a bigger pile of complex, risky trades than the more conservative BNP.To encourage these types of deal, regulators say lenders can make use of an accounting quirk known as “badwill,” or negative goodwill. This means the acquirer can book a profit gain from the difference between the target bank’s depressed market value and its book value. This inflates the merged bank’s capital and cuts the cost of a deal for shareholders, but it’s no panacea.With valuations at historical lows, boosting capital through this accounting trick leaves the enlarged bank exposed to future impairments. If the books of the target turn out to be worse than assumed at purchase, and the value of the badwill is subsequently reduced, it would cut the merged lender’s capital. That would be one concern if Deutsche Bank AG bought Commerzbank AG, for example, according to Credit Suisse analysts. Commerzbank’s badwill could represent almost half of Deutsche Bank’s core capital, depending on the premium offered in a merger.In fairness, some mergers make sense. The two biggest deals this year — Intesa Sanpaolo SpA’s takeover of UBI in Italy and Caixabank SA’s purchase of Bankia SA in Spain — rely in part on badwill and still have a strong financial rationale. There’s room for a few more smaller deals in Italy and Spain, while Germany’s fragmented market of state-backed and mutual lenders is ripe for an overhaul. Even a mooted combination between Swiss behemoths UBS Group AG and Credit Suisse would be worth considering given their complementary securities businesses and strong private banks.And if Europe ever completes the integration of its banking industries and harmonization of its legal systems, allowing funds and liquidity to flow freely, some large cross-border deals will become compelling. In the meantime, European bank executives may want to prioritize calls from cost-cutting consultants over M&A-pitching bankers.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.