Markets waiting for Brexit talks and Trump taking the throne | Calamatta Cuschieri

On Monday, European markets closed in the red area, waiting for United Kingdom Prime Minister Theresa May’s speech on Brexit tomorrow and looking ahead to Donald Trump’s inauguration as the 45th President of the United States later in the week. The DAX declined 0.64%. The banking sector led the losses as Deutsche Bank slid 3.03% and Commerzbank dropped 2.17%. The CAC 40 fell 0.82% when trade ended. On Wall Street, US Markets did not open due to the Martin Luther King Holiday.

Today, the British pound had another awful day when compared to other major currencies, with hunches that Theresa May is set to push for a sharp breakup with the European Union. In fact, at the beginning of the session, the Sterling’s weakness gave a boost to the shares in the United Kingdom, with mining shares leading the way putting the FTSE 100 index on an all-time record. However, the index retreated closing in the red with the worst performer Royal Bank of Scotland as its shares tumbled by 2.78%

Oil area

Oil edged lower with markets prepared to digest the data from the Organisation of the Petroleum Countries (OPEC) this week and this will give further clues on both supply and demand. The rise of the US Dollar, together with the indication from Saudi Arabia on whether the global agreement on production capping is extended or not, when it expires at the end of June, contributed to the downturn. OPEC releases its monthly production this Wednesday and this will offer early clues on the deal signed late in 2016. At one point, the West Texas Intermediate for February Settlement shed 0.25% changing hands at $52.24 per barrel and Brent for delivery in March lost 0.23% at $55.32 for one barrel.

Luxurious merger

Italy’s Luxottica Group Spa and France’s Essilor International have agreed on a 46 billion Euros merger deal, to create one massive powerhouse in the eyewear industry. The deal will amalgamate Luxottica, a spectacles maker with brands such as Oakley and Ray-Ban and Essilor the world’s leading manufacturer of ophthalmic lenses. When comparing the market values, this is regarded as the “merger of equals” with both companies holding equal powers (Luxottica 24billion Euros and Essilor 22billion Euros).

Luxottica's majority owner Delfin Sarl intends to exchange its 62% stake for between 31% and 38% in Essilor. Leonardo Del Vecchio, Luxottica's executive chairman, will also become chief executive and chairman of the new entity with net revenue estimated to top €15 billion, whereas Hubert Sagnieres, head of the French lenses giant, will have the title of deputy CEO and executive vice-chairman. The two companies' combined revenues totalled nearly 16 billion euros in 2015 and together they employed some 140,000 people.

This article was issued by Rodrick Duca, Investment Manager at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.