Markets Ponder Russia Aid to Eastern Ukraine, Rival Bid Made for Chiquita
August 12, 2014 7:49 am
European stock markets have fallen on Tuesday as traders demonstrate caution in the absence of major economic data, with eyes firmly on geopolitical actions. According to reports, Russia sent 280 trucks to South-east Ukraine this morning to deliver humanitarian aid including food, medicine and drinking water to south-east Ukraine. However, there are worries that the Kremlin is using aid as a pretext to directly intervene militarily as pro-Russian separatists face defeat. Though the FTSE is currently trading flat, the DAX and CAC are both down by around 0.4%.
In the Middle East, the US agreed to give direct military aid to Iraq’s Kurdish peshmerga forces, extending Washington’s involvement in a conflict with Islamist insurgents but building on weekend evidence that US air strikes have succeeded in halting the ISIS militant advance in northern Iraq. US President Barack Obama threw his support on Monday behind Haider al-Abadi to be the next prime minister of Iraq. But the current Iraqi prime minister, Nouri al-Maliki, remains defiant and his supporters say that they will oppose al-Abadi’s nomination, raising the prospect of a military confrontation between the two factions in Baghdad. Political instability is likely to persist in Iraq, leaving the void open for militant group ISIS to make further gains. Meanwhile, little or no progress has been made in the Cairo talks that resumed yesterday between Israel and Hamas.
Overnight in Asia, stocks continued to recover from last week’s sharp sell-off – the MSCI Asia Pacific Index added 0.3% while Japan’s Nikkei 225 average also rose around 0.2%, with mixed industrial figures released for June; Industrial Production was down by 3.4% month-on-month, but is up 3.1% Year-on-Year. In other macroeconomic news, figures released by the British Retail Consortium last night showed retailers’ like-for-like sales fell by 0.3% in July, well below market expectations of a 0.55% gain.
Banana company Chiquita has been approached with a joint bid from the US-based Cutrale Group and the Brazilian Investment firm Safra. Five months ago Chiquita announced that it intended to merge with Fyffes, an Irish banana business. The new company would be based in Ireland for tax reasons, an example of the practice known as ‘inversion.’
The joint rival bidders are offering $611 million, around 13$ per share. Though this number is significantly smaller than the 1$ billion merger initially announced by Fyffes and Chiquita, the newcomers claim that they will be able to circumvent some of the difficulties associated with the potential Chiquita-Fyffes merger.
Fyffes stock dropped by 20% at its lowest point yesterday; the firm’s stock is currently trading at around 73.50. Meanwhile, Chiquita stock soared by a staggering 30% , closing at 13.10 yesterday, slightly above the share valuation placed by the newly interested parties.
European stock markets have fallen on Tuesday as traders demonstrate caution in the absence of major economic data, with eyes firmly on geopolitical actions. According to reports, Russia sent 280 trucks to South-east Ukraine this morning to deliver humanitarian aid including food, medicine and drinking water to south-east Ukraine. However, there are worries that the Kremlin is using aid as a pretext to directly intervene militarily as pro-Russian separatists face defeat. Though the FTSE is currently trading flat, the DAX and CAC are both down by around 0.4%.
In the Middle East, the US agreed to give direct military aid to Iraq’s Kurdish peshmerga forces, extending Washington’s involvement in a conflict with Islamist insurgents but building on weekend evidence that US air strikes have succeeded in halting the ISIS militant advance in northern Iraq. US President Barack Obama threw his support on Monday behind Haider al-Abadi to be the next prime minister of Iraq. But the current Iraqi prime minister, Nouri al-Maliki, remains defiant and his supporters say that they will oppose al-Abadi’s nomination, raising the prospect of a military confrontation between the two factions in Baghdad. Political instability is likely to persist in Iraq, leaving the void open for militant group ISIS to make further gains. Meanwhile, little or no progress has been made in the Cairo talks that resumed yesterday between Israel and Hamas.
Overnight in Asia, stocks continued to recover from last week’s sharp sell-off – the MSCI Asia Pacific Index added 0.3% while Japan’s Nikkei 225 average also rose around 0.2%, with mixed industrial figures released for June; Industrial Production was down by 3.4% month-on-month, but is up 3.1% Year-on-Year. In other macroeconomic news, figures released by the British Retail Consortium last night showed retailers’ like-for-like sales fell by 0.3% in July, well below market expectations of a 0.55% gain.
Banana company Chiquita has been approached with a joint bid from the US-based Cutrale Group and the Brazilian Investment firm Safra. Five months ago Chiquita announced that it intended to merge with Fyffes, an Irish banana business. The new company would be based in Ireland for tax reasons, an example of the practice known as ‘inversion.’
The joint rival bidders are offering $611 million, around 13$ per share. Though this number is significantly smaller than the 1$ billion merger initially announced by Fyffes and Chiquita, the newcomers claim that they will be able to circumvent some of the difficulties associated with the potential Chiquita-Fyffes merger.
Fyffes stock dropped by 20% at its lowest point yesterday; the firm’s stock is currently trading at around 73.50. Meanwhile, Chiquita stock soared by a staggering 30% , closing at 13.10 yesterday, slightly above the share valuation placed by the newly interested parties.
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