|Bid||138.35 x 3500|
|Ask||138.30 x 14200|
|Day's range||137.85 - 140.05|
|52-week range||102.40 - 140.10|
|Beta (3Y monthly)||0.08|
|PE ratio (TTM)||28.02|
|Earnings date||28 Oct 2019|
|Forward dividend & yield||2.70 (1.93%)|
|1y target est||119.75|
Britain should avoid regulations which allow arbitrage opportunities in the trading of euro denominated swaps after Brexit, France's top market regulator warned on Thursday. The European Union is seeking to build up its own capital markets and reduce its reliance on London. The clash over where euro-denominated securities should be traded and cleared echoes the stand-off between regulators over trading of euro-denominated shares inside the bloc if there is a no-deal Brexit.
A British investment banker at the center of Germany's biggest fraud trial told judges on Thursday he earned millions of euros from deals involving "astronomical" trades that prosecutors say were a means to make bogus tax reclaims. Martin Shields, a former investment banker, said the trading, known as cum ex, thrived between 2005 and 2012, as investors from around the globe made multi-billion-euro trades on German companies. The trial where Shields is giving detailed evidence is the first in a wider investigation aimed at recovering billions from banks which prosecutors believe profited from the trades.
A banker at the center of a trading scheme German prosecutors say resulted in hundreds of millions of euros of illegitimate tax rebates told a court the scheme had taken on an "industrial scale" involving a network of banks and other institutions. Martin Shields, a former investment banker, said that a web of banks, investors and brokers had organized the circular trades, making multiple tax reclaims and sharing the profit. "I am not before you to deny my involvement, but to explain it," Shields told the court in Bonn on Wednesday.
A banker at the centre of a trading scheme German prosecutors say resulted in hundreds of millions of euros of illegitimate tax rebates told a court the scheme had taken on an "industrial scale" involving a network of banks and other institutions. Martin Shields, a former investment banker, said that a web of banks, investors and brokers had organised the circular trades, making multiple tax reclaims and sharing the profit. "I am not before you to deny my involvement, but to explain it," Shields told the court in Bonn on Wednesday.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Germany’s biggest tax scandal has landed the masters of the financial universe with an unflattering label: criminal organizations.It’s an allegation not leveled by finger-wagging populist crusaders, but prosecutors seeking to push their case beyond a probe of lost revenue. Now two dozen financial institutions caught up in the so-called Cum-Ex dragnet are suspected of forming criminal organizations, money laundering, and in some cases investor fraud, a court document shows.Equating bankers with behavior associated with mobsters lets prosecutors pack more punch into a case exploring whether financial institutions and wealthy individuals illegally engaged in controversial transactions that allowed multiple dividend-tax refunds. The Cum-Ex deals, which peaked between 2007 and 2011 before the government shut them down, cost the German treasury more than 10 billion euros ($11 billion) in lost revenue, lawmakers estimate.While tax crimes remain the central issue, prosecutors have also found evidence that some private investors may have been duped and that the trading strategy may have entailed money laundering by sharing illicit profits, the ruling, an search warrant, seen by Bloomberg News says. The warrant was used by the authorities to raid the offices of Deutsche Boerse AG’s Clearstream unit last month, the central depository for any shares in Germany. The court document mentioned more than 50 probes by Cologne prosecutors.Adding CrimesThe investigations focus on banks, brokers and asset managers over various roles that were necessary for the Cum-Ex transactions, including buyer, short-seller, custody bank and providers of leverage. According to the latest findings, affiliated companies within a group often took on several of these roles, according to the document. Besides brokers and investment companies, the warrant list more than 20 lenders, among them Morgan Stanley, JPMorgan Chase & Co. and Bank of America Merrill Lynch.JPMorgan, Bank of America and Morgan Stanley declined to comment. Deutsche Boerse is fully cooperating with the authorities, a company spokesman said, declining to comment further.A spokesman for Cologne prosecutors said each investigation determines whether probing additional offenses besides tax evasion is warranted, depending on the circumstances. He declined to comment on individual cases.Separately, Peter Biesenbach, the Justice Minister of North-Rhine Westphalia, told reporters on Tuesday that Cologne prosecutors are now conducting 56 probes with a total of about 400 suspects related to Cum-Ex. The staff devoted to these cases is being doubled from five prosecutors to 10, according to a transcript of his speech. North-Rhine Westphalia is Cologne’s home state.“The Cologne investigations have now reached a point that prosecutors say that Cum-Ex wasn’t a legal tax-driven trading strategy, but organized white-collar crime of unimaginable magnitude,” the minister said.Prosecutors like to add crimes like money laundering in complex investigations because they hand them an investigative toolbox that’s out of reach when only tax crimes are involved, said Marco Mansdoerfer, a criminal law professor at Saarbruecken University. It also makes it easier to add more suspects, he said.Complex Structure“There’s a clear tendency to use it in white-collar crime probes, though originally it was intended only for mafia-type of action,” Mansdoerfer said. “It’s a tactical move, because you want to investigate more broadly and use these intelligence methods.”Targeting high finance in a similar vein to drug cartels or the mafia would have few tangible material effects should prosecutors decide to charge banks, since possible fines are mostly based on overall profits made, regardless of the number of offenses involved. For employees and managers who are probed individually, on the other hand, a conviction for additional crimes would typically increase prison terms.Before prosecutors file charges, they often drop the additional crimes again to reduce complexity during trial, said Mansdoerfer. As useful as prosecutors may find it at the investigative stage, it’s easier to try a case under tax crimes alone, according to the professor.The first trial looking into Cum-Ex started on Sept. 4 in Bonn, where the court is hearing a case against two former traders, who are cooperating. Their indictment only cites aggravated tax evasion as the alleged crime.Tomorrow, one of the main defendants, Martin Shields, is scheduled to testify. His appearance, slated for two consecutive days, marks a hotly anticipated moment in the Cum-Ex saga, which relied on a complex web of interactions by different financial institutions, many of which have now been caught up in the investigation.(Updates with doubling of Cologne prosecutors’ staff in eigth paragraph.)To contact the reporter on this story: Karin Matussek in Berlin at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Aarons at email@example.com, Benedikt KammelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- It was the kind of transaction that would have been mundane just a few weeks ago in Argentina: a company owed a bond payment to foreign and local creditors. It was a large payment, over $130 million in principal alone, but the company, a real-estate firm called IRSA, had plenty of cash to cover it.When it turned over the money to the firm processing the payment, though, things got complicated. Under the new currency rules imposed by the government to try to staunch dollar outflows and stabilize the peso, the cash couldn’t be sent to creditors’ overseas accounts. As the payment was coming due Sept. 9, the firm, Clearstream, began releasing a series of statements confirming the money was, at least temporarily, frozen.All of which has added another layer of confusion and worry to markets in a country already paralyzed by a financial crisis that has the government on the cusp of default for the third time in the past 20 years. Among the most pressing questions traders and investors were grappling with Friday was whether this blocked payment was a technical glitch that the government would resolve soon or a more permanent feature of the controls that would imperil payments by other companies and the government itself in coming weeks.For the time being, most observers seemed willing to wait the situation out, expecting that Argentine officials will quickly tweak the rules so as to avoid corporate bond defaults.“Argentina doesn’t want an accidental default” and will fix the problem, said Siobhan Morden, the head of Latin America fixed income strategy at Amherst Pierpont Securities in New York.An IRSA spokesman declined to comment.Read More on Argentina’s History of DefaultsAt this stage, it appears this snag in the payment chain will affect dollar bonds governed by local laws rather than foreign-law bonds where payments are made directly abroad. Companies, provinces and the federal government often sell both types of notes -- those that are subject to New York law and those under domestic regulations.A central bank official, who asked not to be identified, said the capital controls announced this month do indeed limit these sorts of local transactions. Non-resident holders of local-law bonds need to be paid locally, and rules limiting overseas dollar transfers to $1,000 a month apply to them, the person said.Amos Poncini, who holds the IRSA bond as a fund manager at CBH Compagnie Bancaire Helvetique SA in Geneva, said he feels burned by the delayed payout and said it reflects poorly on Argentina as a whole.“Investors will fly away from there,” he wrote in an email.The money held up in Argentina owed to overseas IRSA creditors totals about $80 million, according to a person with direct knowledge of the matter. The remainder of IRSA’s payment was distributed to local bondholders.IRSA depositary receipts dropped 5.4% to $5.56 in New York trading Friday, while its $71 million of notes due in July 2020 were little changed at about 86.8 cents on the dollar. Securities from oil producer YPF due in 2021 fell 2.1 cents to 82.7 cents on the dollar, while the government’s century bonds due in 2117 fell 1.8 cents to 41.7 cents on the dollar.Of course the bond payment hiccup is only the latest in the list of recent disasters for Argentine investors. Assets have tumbled since an Aug. 11 primary vote showed the opposition was likely to unseat the business-friendly President Mauricio Macri in October elections. The peso has weakened almost 20% since the ballot, prices for the century bond fell by almost half and the Merval stock index lost 46% in dollar terms.Capital controls are blunt instruments and frequently need to be revised as authorities discover surprise implications and loopholes, according to Dirk Willer, an analyst at Citigroup Inc. Officials want to preserve the country’s foreign reserves, but likely want companies to be able to repay debts, he said.“This is likely an unintended consequence of the controls and will likely be revised,” Willer wrote in a note to clients.(Adds details of amount held up in Argentina in 11th paragraph. A previous version of this story was corrected to fix the size of the bond payment.)\--With assistance from Ignacio Olivera Doll, Patrick Gillespie and Aline Oyamada.To contact the reporters on this story: Carolina Millan in Buenos Aires at firstname.lastname@example.org;Pablo Gonzalez in in São Paulo at email@example.com;Ben Bartenstein in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Papadopoulos at email@example.com, ;Jeremy Herron at firstname.lastname@example.org, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Deutsche Boerse AG’s Clearstream unit may have had a bigger role than previously known in Germany’s most controversial tax scandal, and may have misled authorities about it, according to a warrant in the case.Employees and managers at Clearstream were informed “in detail” about how so-called Cum-Ex deals were organized and “actively supported” transactions, according to the court document seen by Bloomberg. They also met with clients to talk about how trades were handled, booked and reviewed.The document authorized raids of the company’s offices conducted by prosecutors two weeks ago. Authorities are looking into possible involvement of employees and high-ranking managers, and the document indicates that Cum-Ex transactions and Clearstream’s role in them didn’t end in 2012 after a legal change to stop it, but that the strategy continued in a modified way at least until 2016.A Deutsche Boerse spokesman referred a request for comment to Clearstream, whose spokeswoman said the raids were part of investigations into customers and employees. Deutsche Boerse is cooperating with the authorities, she added.The Cum-Ex scandal has caught up several financial institutions, including Deutsche Bank AG, Bank of New York Mellon Corp. and Barclays Plc. The controversial transactions took advantage of a now abandoned German practice of taxing dividends that made it possible to get multiple refunds on a tax paid only once, according to investigators. The practice cost the German government more than 10 billion euros ($11 billion) in lost revenue, lawmakers say.The warrant summarized the current findings of the probes by Cologne’s prosecutors. The document cites more than 50 investigations pending there and the names of dozens of banks, brokers, funds and trading companies involved. The Clearstream raids started on Aug. 27.Clearstream played a central role as it’s the exclusive depository for shares of companies listed on German exchanges. Virtually all Cum-Ex deals were settled via its channels, according to the warrant.The document cites a meeting with Barclays in London in February 2007 where executives discussed Cum-Ex strategy in detail. The warrant also refers to 2010 email exchanges with Scotia Capital and Banco Santander’s Cater Allen about short-selling activity for Cum-Ex.Barclays, Santander and Scotia Capital, a unit of Bank of Nova Scotia, declined to comment, as did Cologne prosecutors.The probe found indications that suspicious transactions were also flagged internally and could be detected without relying on tips from clients.Clearstream staff advised the German Finance ministry and thus influenced legislation regarding the trades without disclosing the real volumes and the trading strategies behind them, according to the document. Clearstream staff “deliberately” misinformed the authorities about its internal procedures and about the ability to detect short selling, according to the document.The way how Clearstream described its technical processes “for years” to the tax authorities and also to a parliamentary select committee investigating Cum-Ex was deviating from how the Deutsche Boerse unit internally viewed it, the warrant said. To the outside world, Clearstream maintained it had no way to detect short selling while it was well able to do so, according to the probe’s findings.Deutsche Boerse profited from the fees Clearstream charged for the vast volumes of share sales required by Cum-Ex deals, according to the warrant.(Updates with Clearstream communication to authorities in second last paragraph.)\--With assistance from Donal Griffin.To contact the reporter on this story: Karin Matussek in Berlin at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, Christopher Elser, Marion DakersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The audacious bid by Hong Kong’s stock exchange for its London rival is likely to fail – and that’s no bad thing.Hong Kong Exchanges & Clearing Ltd.’s unexpected $36.6 billion offer for London Stock Exchange Group Plc would create one of the world’s largest trading hubs. The cash-rich, equities-focused HKEX would gain an edge in fixed-income trading, but in a world where algos and bots handle much of the action, the bidder would do better to take a page from LSE’s playbook and look for bigger data sources. Hong Kong Exchanges calls its plan to create an Asian-European giant that’s open 18 hours a day a "vote of confidence in London and the United Kingdom’s future role as a global financial center” at a time that Brexit paralysis is clouding the outlook. The move also shows belief that, despite the recent protests, Hong Kong can still produce world-stage firms.The more than 300-year-old London exchange has a lot going for it, including fixed-income heft and the FTSE Russell portfolio of index benchmarks used by institutional investors. The offer values LSE shares at 8,361 pence (about $103), around 42 times 2019 earnings, according to Citigroup Inc. analysts, much higher than the London bourse’s historical average price-earnings multiple of 22 times. But Hong Kong Exchanges’ offer would scupper LSE’s own bid for data provider Refinitiv, a deal that LSE shareholders like as shown by its soaring share price. They, and politics, may stand in HKEX’s way. U.K. regulators will have a tough time accepting the takeover of a British institution by a Hong Kong company. Given the impact to global financial markets and the popularity among exchange-traded funds of the FTSE Russell indexes, U.S. regulators may also weigh in. HKEX Chief Executive Charles Li can argue that his firm is already a global company, having acquired the London Metal Exchange in 2012, but it remains a foundation stone of Hong Kong. The city’s government owns just 5.9% but appoints the majority of the directors. Exchange mergers are sensitive propositions anywhere. The LSE has been a frequent target and was in the sights of Germany’s Deutsche Boerse AG three years ago until Brussels blocked the deal. In the Asia-Pacific region, Singapore Exchange Ltd.’s 2011 bid for ASX Ltd. was rejected by Australian regulators on national-interest concerns.There are also questions over HKEX’s deal-making prowess. HKEX acquired the LME, the world’s biggest venue for trading base metals like aluminum, at the top of the commodities cycle. It promised LME members that it would have a warehouse in China from which to access the country’s massive metals market. Seven years later and it doesn’t, as Chinese authorities seek to protect homegrown commodities entities, including the Shanghai Futures Exchange and the Dalian Commodities Exchange.There is no doubt that HKEX needs to diversify. Volumes on the exchange have slumped and it has fallen off its perch as the world’s top IPO venue last year.Stock exchange businesses reliant on volatile volumes are increasingly passe in a world of computerized trading. With little overlap with LSE, Hong Kong Exchanges can’t count on simply cutting costs. The key to growth for exchanges is in the data that fixed-income, currency, and equities traders need and the analytical tools that deliver it to them. That’s why LSE has pursued Refinitiv. HKEX has depended on a strategy of being the gateway to China through its stock and bond trading links. The value of that role is diminishing as the country opens direct access to markets, removing quotas Tuesday on purchases by global funds. Wanting to go beyond Hong Kong to create a global powerhouse is understandable. Doing so with another market grappling with its own political crisis and uncertain future post-Brexit is less so. Li likened the Hong Kong exchange’s unsolicited takeover of LSE to a “corporate Romeo and Juliet.”He missed the point on how that story ended.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Deutsche Boerse's Eurex Clearing arm said on Monday it was scrapping booking fees for customers that want to switch clearing in over-the-counter derivatives to the Frankfurt operator before Britain leaves the European Union. Most euro-denominated derivatives traded off-exchange, such as interest rate swaps, are cleared by the London Stock Exchange's LCH unit. "The incentive program of Eurex Clearing provides for a 100% discount on booking fees for portfolio switches in over-the-counter interest rate derivatives to Eurex Clearing until end of 2019," Eurex said in a statement.
The Bank of England has less firepower at its disposal than it did before past recessions, but new ideas for firing up the economy in a downturn need to be handled carefully, BoE policymaker Gertjan Vlieghe said on Monday. Speaking about a think-tank report which said Brexit and the global slowdown meant Britain faced the biggest recession risk since the 2008-09 global financial, Vlieghe said it was prudent to think about what to do to see off an economic shock.
Thyssenkrupp AG will drop out of Germany's benchmark stock index this month, the stock market operator said, the latest setback for the ailing conglomerate's turnaround efforts. Thyssenkrupp will leave the DAX on Sept. 23 and will be replaced by aircraft engine maker MTU Aero Engines AG , making it the second founding member to exit the 30-member index in the past 12 months. Hit by four profit warnings and two botched restructuring attempts, shares in Thyssenkrupp have fallen 42% in the past year, while the DAX has kept steady.
European stocks closed higher in thin trading on Monday, with investors favouring defensive sectors as the United States and China imposed more tariffs, while a slide in the pound helped Britain's FTSE 100 outperform. After a tumultuous month, equity investors largely shrugged off the latest escalation in the trade spat as Washington began imposing 15% tariffs on a variety of Chinese goods on Sunday and Beijing reciprocated with new duties on U.S. crude oil. London shares jumped 1%, outpacing their European peers, as the internationally focused stocks got a boost from a a slump in sterling on fresh Brexit worries.
The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). To keep it practical, we'll...
(Bloomberg) -- Deutsche Boerse AG, the operator of the Frankfurt stock exchange, said that searches at the company’s offices are continuing for a second day in a tax probe related to controversial Cum-Ex trades.Cologne prosecutors started the searches at Deutsche Boerse’s Clearstream unit on Tuesday. The company has said that the probe targets staff and customers. The raids took place at the company’s offices in Eschborn, Germany, and Luxembourg, according to people familiar with the investigation.The Cum-Ex scandal has caught up multiple financial institutions, including Deutsche Bank AG, Bank of New York Mellon Corp. and Societe Generale SA. The controversial transactions took advantage of a now abandoned German practice of taxing dividends, which made it possible to get multiple refunds on a tax paid only once, according to investigators.The company said it is cooperating with the authorities. Cologne prosecutors confirmed that the raids in a Cum-Ex case continue without providing any names or further details.Deutsche Boerse shares fell as much 1.43% and traded at 127.15 euros at 12:08 p.m. in Frankfurt.Clearstream learned in 2017 that Cologne prosecutors had started to probe one of its employees for his alleged involvement in the Cum-Ex matter. The company said in a filing last year that prosecutors initiated proceedings to make it a party in the case, which could allow them to seize profits from the disputed deals.(Updates with shares in third paragraph.)To contact the reporter on this story: Karin Matussek in Berlin at email@example.comTo contact the editor responsible for this story: Anthony Aarons at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Public prosecutors on Tuesday raided offices of German exchange operator Deutsche Boerse as part of a broader investigation into a fraudulent share-trading scheme, Cologne public prosecutor's office said. A Deutsche Boerse spokesman confirmed that offices of its Clearsteam subsidiary were searched, adding that the investigation was focussed on both clients and staff. "As in the past, Deutsche Boerse is fully cooperating with the authorities," the spokesman said.