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Market Update

PIMCO CEO Resigns as Fund Outflow Accelerates

Author: Nigel Thomas
Last Update: 10:27 AM ET January 22 2014

3:40 PM Frankfurt – Allianz said PIMCO CEO Mohamed El-Erian resigned. Credit Agricole agrees to sell its Bulgaria division to reduce €160 million debt. Raiffeisen Bank offered 97.47 million new shares. SSAB agreed to buy Finland-based Rautaruukki for $1.5 billion.

In London trading, FTSE 100 index slid 0.01% or 1.02 to 6,853.24 and in Frankfurt the DAX index rose 0.2% or 18.46 to 9,749.23.

In Paris, CAC 40 index added 0.3% or 14.40 to 4,338.27.

Allianz SE slipped 1.6% to €130.45 after the Germany-based insurer said that Mohamed El-Erian has resigned as chief executive officer and co-chief investment officer of its U.S.-based asset management subsidiary PIMCO from March.

Munich based Allanz said parent company’s operating chief will become CEO and Andrew Balls and Daniel Ivascyn will be assume role of deputy chief investment chiefs.

Two managers along with CIO Bill Gross will oversee $1.97 trillion in assets at the firm.

Last year clients pulled $41 billion from the $237 billion Pimco Total Return fund as bond market struggled and interest rate rose.

El-Erian, a fixture on financial news TV channels and always ready to comment on world market has struggled with his equity funds and may have spread too thin with listed as fund manager in 11 PIMCO funds.

PIMCO Global Multi Asset Fund launched in 2008 following the principles Erian proposed in his book “When Markets Collide: Investment Strategies for the Age of Global Economy” has generated annual return of 6.2% in the last five years, and ranked in the bottom 10% of all peer funds tracked by TickerFunds.com.

Credit Agricole SA fell 0.2% to €10.15 after the France-based banking and insurance service provider agreed to sell its Bulgaria division to Bulgaria based Corporate Commercial Bank AD to reduce debt by €160 million or $217 million.

Raiffeisen Bank International AG slid 0.4% to €29.76 after the Austria-based lender offered up to 97.47 million new shares to €2.9 billion or $3.9 billion to increase the capital and to repay the state aid.

SSAB AB surged 12.5% to 54.55 kronor after the Sweden-based steel producer agree to acquire Finland-based Rautaruukki Oyj for 10.1 billion kronor or $1.56 billion. SSAB is offering 0.4752 newly issued SSAB class A shares and 1.2131 newly issued class B shares for each Rautaruukki share.

The major stock holder AB Industrivärden and Solidium Oy had communicated their full support on proposed combination.

Shares of Rautaruukki climbed 32.7% to €9.14 in Helsinki.

WH Smith Plc jumped 3% to 1,046.35 pence after the U.K.-based newspapers, magazines, books retailer said total sales and comparable sales declined 4%. Total sale in travel segment grew 2% but comparable sales fell 1%.

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