Greek rebound
Greek bond yields – which move in the opposite direction to prices – fell to their lowest level in almost 14 years as the country’s economic growth prospects have improved. The yield on 10-year debt hit 3.274 per cent, according to Refinitiv – the lowest since 2005 – and is in stark contrast to 2011, when yields surpassed 40 per cent as the eurozone debt crisis mounted. The International Monetary Fund has forecast 2.4 per cent real gross domestic product growth for 2019, claiming the country “has entered a period of economic growth that puts it among the top performers in the eurozone”.
Rio's warning
Cyclone disruption
Shares in Rio Tinto (RIO) may be on a tear so far in 2019, but operationally, the mining giant is falling far short of expectations. In a first-quarter trading update, released on Tuesday, Rio said shipments of iron ore were 14 per cent lower year on year, and “significantly impacted by the weather disruptions in March and the fire at Cape Lambert A in January”. In fact, these events are likely to knock second-quarter production, and have led to a downgrade in full-year iron ore shipment guidance to between 333m and 343m tonnes (from 338m to 350m tonnes previously). Copper, titanium dioxide, bauxite and iron ore pellet production were all up year on year.
Kier overhaul
Shares languish
Concerns over its debt, an undersubscribed rights issue and falling profits have bludgeoned investor confidence in Kier (KIE) during the past 12 months, with the shares having lost around two-thirds of their value in that time. However, the construction group was thrown some relief after it confirmed that Andrew Davies had been appointed as chief executive and that he would launch a strategic review and consider ways of further simplifying operations to create a more focused group, the allocation of capital resources and additional steps to improve cash generation and reduce leverage. The conclusion of the review will be announced in July.
Mastercard under spotlight
Lawsuit progress
Mastercard may yet have to answer a £14bn lawsuit for imposing charges on UK consumers, after the UK Court of Appeal reversed a 2017 decision by the Competition Appeals Tribunal to block it. The class action – led by former financial ombudsman Walter Merricks – is seeking damages from the payments specialist on behalf of 46m customers for losses relating to alleged illegal credit card fees. However, no liability has been established against Mastercard and the suit still requires certification before it can proceed to trial.
EM delight
Investors bullish
Ashmore (ASHM) got off to a bullish start to the year as a more dovish tone from the US Federal Reserve has tempted investors into emerging market assets. The asset manager reported an 11 per cent rise in assets under management during the first three months of the year to $85.3bn (£65.4bn), after gaining net inflows of $5bn and benefiting from market movements of $3.6bn. Corporate debt and multi-asset strategies reported the largest increases in assets under management at 30 per cent and 25 per cent, respectively, during the quarter.
Slowing steel
Chinese demand falters
Slowing economic growth, weakening Chinese manufacturing and ongoing trade wars are likely to reduce the rate of growth in global steel demand over the next two years, according to the World Steel Association (WSA). Demand will rise 1.3 per cent in 2019 and 1 per cent in 2020, behind an increase of 2.1 per cent in 2018. Mild fiscal stimulus from the Chinese government mitigated those challenges in 2018, which will partially continue into 2019, the WSA said, as the region has traditionally accounted for half of global steel demand.
Nexi next
IPO disappointment
Shares in payments specialist Nexi dipped on their inaugural day of trading on the Italian stock exchange. The group announced last week that its IPO offer price had been set at €9 (£7.8) per share, engendering a total market capitalisation on admission of €5.7bn and a total enterprise value of €7.3bn. It said that the offer received strong interest from national and international investors. Nexi describes itself as the “leading PayTech company in Italy”. It works with around 150 partner banks, spanning 80 per cent of the system in Italy. Its flotation closely follows news that payments and foreign exchange company Finablr plans to float in London.
