HSBC weighs on banks as European stocks advance

HSBC was expected to release the bank's annual results later in the day on February 20. (AFP)
Updated 20 February 2018
0

HSBC weighs on banks as European stocks advance

LONDON: European shares rose on Tuesday thanks to a slew of well-received results, though banks were a weak spot after HSBC reported weaker than expected earnings and said it needed as much as $7 billion of fresh capital.
The pan-regional STOXX 600 benchmark ended the session with a gain of 0.6 percent, while the banking index declined 0.1 percent.
A weaker euro also helped euro zone stocks make headway after a lacklustre start to the week.
HSBC dropped 3 percent after its trading update, the last under outgoing CEO Stuart Gulliver, who has pushed through a painful restructuring of Europe’s biggest bank by market value.
Credit Suisse analysts said HSBC’s pledge to undertake share buybacks “as and when appropriate” could mark a change in capital-return strategy by the new management.
Elsewhere, some positive earnings buoyed sentiment.
Edenred was among top performers, rising 6.5 percent after the French provider of prepaid meal vouchers and cards reported record 2017 earnings, increased its dividend and expressed confidence for 2018.
Danish software developer Simcorp led the STOXX index with a 12.2 percent rise after its full-year results.
Energy stocks supported indices, with BP, Total , Royal Dutch Shell and ENI up between 0.2 percent and 1.6 percent.
Among regional indexes, London’s FTSE 100 was flat, with the world’s biggest miner, BHP, joining HSBC among fallers as it dropped by 4.6 percent after missing results forecasts.
InterContinental Hotels fell 2.7 percent after putting shareholder payouts on ice as it pursues a new strategy to accelerate growth.
Swiss financial software company Temenos was 6 percent lower after news that it was in talks to buy British rival Fidessa Group for about 1.4 billion pounds.
Germany’s HeidelbergCement gained 0.3 percent after raising its target for savings resulting from the takeover of Italcementi for the third time in less than a year.


Shareholders of India’s Jet Airways approve debt-for-equity swap

Updated 23 February 2019
0

Shareholders of India’s Jet Airways approve debt-for-equity swap

  • The plan will mean the lenders will have a bigger holding than any other shareholder
  • Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent

MUMBAI: India’s Jet Airways said late on Friday that its shareholders approved a plan to convert existing debt to equity, paving the way for the troubled company’s lenders to infuse funds and nominate directors to its board.
Jet’s board last week approved a plan by lenders, led by State Bank of India, for an equity infusion, debt restructuring and the sale or sale-and-lease-back of aircraft.
The plan will mean the lenders will have a bigger holding than any other shareholder.
Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent.
Jet, which had net debt of 72.99 billion rupees ($1.03 billion) as of end-December, has debt payments looming next month, according to rating agency ICRA. It has been unable to pay pilots’ salaries and has outstanding bills to aircraft lessors.
The company, India’s biggest full-service carrier, is struggling with competition from budget rivals, high oil prices and a weaker rupee. The share price took a beating in 2018, losing nearly 70 percent of its value.
In a regulatory filing, Jet said on Friday that 98 percent of its shareholders voted to increase the share capital to 22 billion rupees ($309.8 million) from 2 billion rupees at a special meeting.
Jet, whose financial woes are set against the backdrop of wider aviation industry problems, has been in the red for four straight quarters.