|Bid||3,114.00 x 15000|
|Ask||3,116.00 x 26400|
|Day's range||3,050.00 - 3,118.00|
|52-week range||2,289.00 - 3,285.00|
|Beta (3Y monthly)||0.95|
|PE ratio (TTM)||17.33|
|Earnings date||1 Aug 2019|
|Forward dividend & yield||1.14 (3.91%)|
|1y target est||3,276.00|
(Bloomberg Opinion) -- Who knew there was investor appetite for subordinated Greek bank debt?Because of the relentless hunt for returns in yield-starved Europe, Piraeus Bank SA, one of Greece’s big four lenders, has been able to brave the European capital markets for the first time since the financial crisis.Piraeus isn’t opting for senior bonds, and is instead plumping for Tier 2 subordinated debt (which sits midway in the capital structure between top-rated debt and equity-like capital). This means the notes would be fully subject to investor bail-in rules, where bondholders take a financial hit should the bank fail.While the bank has been bolstering capital by offloading bad loans and selling assets, this issue will help it meet its commitments to the European Central Bank. Last year, the ECB asked the company to raise much as 500 million euros ($560 million) as part of its strategic recovery plan. It’s notable, nonetheless, that the lender has found plenty of takers despite all the well-known risks around the Greek banking system.Piraeus has raised 400 million euros from the 10-year subordinated security, with an issuer call option after five years. The very high 9.75% coupon was clearly attractive to buyers, but it carries danger signs too. Paying that much interest to bondholders will be a heavy burden for the bank’s business to support.Indeed, this might be a deal too far for wiser investment heads (regardless of all the hedge funds piling in here). Just because government yields are plunging doesn’t mean credit risk is improving; it usually means the opposite. In fairness, this issue is for bank capital specialists only but there’s always a deal that corrects the market’s over-enthusiasm for the diciest assets.The offer would have been unthinkable a year ago, and comes courtesy of a sustained decline in Greek sovereign yields, with five-year yields falling below their Italian equivalents, and a sixfold rally in Piraeus Bank's share price since February. It helps that imminent national elections are expected to deliver victory to the pro-business New Democracy Party. For Piraeus, it makes sense to strike now and the books were more than twice covered.Still, a big leap of faith is required to believe that that this ultra-high risk, CCC-rated junk bond will be repaid at that call date in five years time. Investors won’t want a repeat of what happened when Italy’s Banca Monte dei Paschi di Siena SpA issued a similar bond in January 2018. That now trades at close to half its initial value. Piraeus’s non-performing loans make up more than half of its total lending, despite its offloading of 500 million euros of them to private equity buyers this month. Even after the share price rally, the stock only trades at a price-to-book ratio of less than 0.2. The path to easing the bad debt burden will be arduous.As part of Piraeus’s strategic plan, the bank sees non-performing loans dropping to about 9% of the total by 2023, which requires the elimination of 21 billion euros of exposure. It has signed an agreement with Intrum AB, a Swedish debt collection specialist, to help manage its bad debt pile. However, the speed at which Greece’s lenders will be able to clean up their loan books is uncertain. The government and the Greek central bank have two separate, not entirely complementary, initiatives to help banks do this but they’re still obtaining European Union approvals.Piraeus’s plan to improve its fee income by 33% by 2023 looks ambitious too. As the biggest private lender to SMEs in Greece, its growth is tied ultimately to the country’s nascent economic recovery. A shareholder group that includes the EU-backed Hellenic Financial Stability Fund – as well as John Paulson, Vanguard, Blackrock Inc. and Schroders Plc – offers some reassurance. While success would be another important milestone in Greece’s long road to recovery, you’ll have needed nerves of steel to jump on this one.To contact the authors of this story: Marcus Ashworth at firstname.lastname@example.orgElisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.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/opinion©2019 Bloomberg L.P.
I think these two FTSE 100 (INDEXFTSE:UKX) shares could offer superior income returns compared to a Cash ISA.
TORONTO/LONDON, June 17 (Reuters) - Ahead of Tuesday's deadline for Barrick Gold Corp to make a firm buyout bid for its Acacia Mining unit, a gold rally has eroded, but not eliminated, a discount and big Acacia shareholders say they still oppose the offer. Barrick must either firm up its proposal to acquire the 36.1% of Acacia it does not own by June 18, or walk away for at least six months under British takeover law. In the event opposition melts away and a friendly offer materialises, 75% of the minority shareholders would have to back it.
Mirabaud Securities recently put together a list of European value stocks that could offer 50% upside. Here are three FTSE 100 (INDEXFTSE: UKX) stocks that made the list.
* European shares up 0.3% * EU expected to start infringement procedure against Italy * Italy's FTSE MIB lags, down 0.3%, as banks fall * Asian shares rise on signs of Fed interest rate cut * Norsk Hydro beats, NSF backs out of Provident bid June 5 - Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. "The key question is whether that is a short-term blip or a more sustained switch from 'momentum' investing back to a more fundamental approach of 'intrinsic value'," write Mirabaud Securities strategists.
Lender Provident Financial said shareholder Janus Henderson Investors does not plan to accept the hostile takeover bid for Provident by Non-Standard Finance , adding that more than one-fifth of its shareholders hold the same position. "We have not been convinced of a compelling logic for the combination of NSF with PFG," said Antony Marsden, head of governance and responsible investment, Janus Henderson Investors. In a statement after markets closed on Tuesday, Provident revealed the letter sent to the company by Marsden, noting that Janus Henderson stood by the doorstep lender's strategy and added that recent results suggested good progress towards recovery of the home credit unit.
LONDON (Reuters) - Jupiter Fund Management has appointed Wayne Mepham as its new chief financial officer, poaching the executive from rival money manager Schroders in the latest major change to its leadership ...
Provident said that 96% of the shares held by its independent shareholders have yet to be signed up to NSF's offer for the larger company, just days before a final deadline the latter has given for the deal to be accepted. Three funds - Woodford, Invesco and Marathon - holding more than 50% of Provident and a majority stake in NSF have all backed the bid, led by current NSF Chief Executive Officer and former Provident boss John van Kuffeler. "While this (96%) statistic is interesting and clearly implies low support for the transaction, the offer process only requires a majority if NSF chooses to proceed," KBW analyst Martin Williams said in a note on the deal.
NSF's 1.3 billion pound hostile bid for Provident has turned into a bitter war of words between the two subprime lenders, with NSF accusing Provident Financial executives of mismanaging the company. Provident, established in 1880 and based in the northern English city of Bradford, has been rebuilding after a botched restructuring of its home credit business led to profit warnings and the departure of its chief executive officer in 2017.
British asset manager Schroders on Thursday posted a 4.2 percent rise in first-quarter assets to 424.4 billion pounds, caused by increases to its funds managed on behalf of institutional clients. Total institutional funds rose to 252.3 billion pounds from 242.3 billion pounds in the three months to end-March, it said in a statement. The percentage of increase in assets derived from market movements and that from net inflows of new client cash was not disclosed.
Advisers Glass Lewis say Schroders shareholders should vote against the investment firm’s pay report. Photograph: Toby Melville/Reuters The fund manager Schroders is at risk of a shareholder backlash after an influential advisory firm issued a warning about “excessive” bonuses and the appointment of a Schroder family member to its board. Glass Lewis has recommended that at next month’s annual meeting investors vote against the company’s pay report, as well as the election of Leonie Schroder, claiming she lacks the experience needed to challenge the firm’s executive team. It has also urged investors to block the re-election as chairman of Michael Dobson, who Glass Lewis says is responsible for the board’s make-up and “should be held accountable for this failure”. The advisory group said it had “severe reservations” about supporting the pay report due to the size of the bonuses granted to chief executive Peter Harrison. Harrison, who has been at the helm since 2016, was given a £6m bonus last year on a £500,000 salary. “We remain concerned that the annual bonus plan has consistently led to unnecessarily high payouts,” Glass Lewis said. “We cannot recommend that shareholders support this proposal.” A spokeswoman for Schroders said the company has a “clear and thorough process” for determining pay “which we have followed rigorously and which has served the firm and all its stakeholders well over many years”. The Glass Lewis report also takes aim at Leonie Schroder, whose family holds a 35% controlling stake in the business. She was appointed in March following the death of her father, Bruno. Glass Lewis said controlling shareholders should be “entitled” to representation, but stressed that directors need to have the experience to guide and challenge the executive team. “We do not believe a sufficiently robust rationale has been presented for the election of nominee [Leonie] Schroder, and question whether, in representing her family interests, she has sufficient core industry or sector experience to effectively challenge management,” the advisory firm explained. Schroders said the decision to appoint Leonie Schroder followed consultations with key members of the family trust and main shareholder group following Bruno’s death in February. “After careful consideration, the nominations committee decided to recommend to the board her appointment as a director,” a spokeswoman said. “As part of the nominations process, the company also engaged with a number of institutional shareholders – all indicated support for the proposal to appoint Leonie Schroder, given the overall mix of skills on the board and the majority of independent non-executive directors,” she added. The Schroders AGM will be held in London on 2 May.
"Schroders agrees with the conclusion of the Findel Board that the offer significantly undervalues the future prospects of Findel," the company said in a statement and reiterated its intention to not accept the offer which values Findel at 139.2 million pounds. Schroders Investment Management holds an 18.85 percent stake in Findel.
The FTSE 100, which earns more than two-thirds of its earnings in U.S. dollars, added 0.6 percent on its best day in a week - and the FTSE 250 was up 0.1 percent. Sterling lost more than a percent as May failed to sway hardline opponents of her European Union divorce deal with an offer to quit, while none of eight indicative options to break the Brexit deadlock won majority support in parliament. Tobacco giant Imperial Brands advanced 2.3 percent and British American Tobacco climbed 2 percent as brokerage Citi hiked rating on both stocks to "Buy" saying regulatory threat will probably move away from cigarettes.
Schroders Personal Wealth, a planned joint venture between asset manager Schroders and Lloyds Banking Group, announced its management team on Tuesday. Schroders and Lloyds said they were teaming up on the project in October last year, and at the time said it would be led by Schroders' co-head of intermediary, James Rainbow.
About a year ago, Lloyds announced it was pulling 109 billion pounds ($145 billion) of assets that SLA managed on behalf of Lloyds’s Scottish Widows unit, saying the 2017 merger of Standard Life and Aberdeen created a “material” competitor to the lender’s own insurance business. The balance of the funds is pledged to BlackRock Inc.
Like its peers, Schroders suffered in the fourth quarter as market volatility prompted clients to withdraw funds, as the firm detailed in its full-year results on Thursday. At a time when fees for managing other people’s money are on a downward spiral everywhere you look, that’s a pretty good performance.
Schroders posted a 15 percent fall in full-year pretax profit after restructuring costs and a fall in assets under management and fee income, sending shares in the British asset manager lower on Thursday. Pretax profit for the year ended December 31 fell to 649.9 million pounds from 760.2 million, said Schroders, which traces its roots back more than 200 years and is still majority owned by the Schroder family. Assets under management fell 6 percent to 421.4 billion pounds hit by weaker markets and net outflows of 9.5 billion pounds.