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Market Update

European Markets Fall on Weak Oil, DONG Energy IPO Jumps 10%


Author: Sarla Buch
ticker.com
Last Update: 4:36 PM ET June 09 2016

4:00 PM Frankfurt – Weak commodities drag European markets down more than 1%. DONG Energy public offering jumps 10%. Flybe net swung to profit. Glencore agreed to sell a 9.99% stake in its agricultural business for $625 million. Vodafone NZ Sky Network agreed to merge their New Zealand businesses in $2.4 billion transaction.

European market indexes fell more than 1% after oil and base metal prices eased and the U.S. dollar traded at a five-week low.

The euro gained after the recent run up in dollar lost steam on the weak jobs data and the fading hopes of another rate hike. In addition, the weakness in oil prices also knocked down resource stocks in London trading.

Dong Energy, controlled by the Danish government, priced its public offering at DKK 235 a share, near the higher end of its price range between DKK 200 and DKK 255.

The Danish government and a consortium led by Goldman Sachs sold 17.6% holding in the energy company that has interests in gas, oil and wind farms.

The Danish company is primarily looking at to expand its offshore wind farms around the U.K. The renewable energy company is looking to develop the largest offshore wind farm off the coast of Northeast of England.

The listing on the Nasdaq Copenhagen system was primarily subscribed by the 90% of institutional investors and 10% by retail investors in Denmark.

In London trading, FTSE 100 index slipped 69.63 or 1.1% to 6,231.89 and in Frankfurt the DAX index declined 128.16 or 1.3% to 10,088.87.

In Paris, CAC 40 index dropped 43.12 or 0.9% to 4,405.61.

British Polythene Industries Plc surged 35.7% to 962.25 pence after the U.K.-based polythene films producer agreed to be acquired by RPC Group Plc for 940 pence or about £261 million or $379 million in a cash-and-stock.

RPC said its plans to raise approx £90 million through a placement of new ordinary shares.

RPC Group Plc stock in London Stock Exchange jumped 3.4% to 843 pence.

Flybe Group Plc declined 4.5% to 56.12 pence after the U.K.-based regional airline company said revenues in the year ending in March soared 8.7% from a year ago to £623.8 million.

Net in the year swung to profit from a year ago to £6.8 million compared to a loss of £35.7 million and diluted earnings per share swung to 3.1 pence from diluted loss per share of 16.5 pence.

Flybe chief executive Saad Hammad said “We achieved profitability for the first time as a public company, following losses in every year since stock listing in 2010.”

The budget airliner had narrowed its operating cost per seat by 4.7% while maintaining the total revenue achieved per seat sold.

Glencore Plc plunged 5.5% to 137.80 pence after the Switzerland-based miner and commodity trader agreed to sell a 9.99% stake in its agricultural business Glencore Agricultural Products to British Columbia Investment Management Corp for $624.9 million.

Glencore plans to continue to divest its non-performing assets worth up to $5 billion in this fiscal year.

Vodafone Group plc fell 1% to 221.05 pence after the U.K.-based mobile company merged its New Zealand-based subsidiary with the country''s largest pay-TV services provider Sky Network Television for $2.4 billion in shares and cash.

SKY will acquire all of the shares in Vodafone NZ for a total purchase price of NZ$3,437 million and Vodafone will become a 51% shareholder in the combined group.

Vodafone NZ is New Zealand''s leading mobile and number two broadband Internet services provider with over 2.35 million mobile connections and over 500,000 fixed-line connections.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc