Markets play seesaw | Calamatta Cuschieri

More volatility in the markets, a formal merger between Renault-Nissan & a takeover of NEX by CME

Renault SA and Nissan Motor Co. are in talks to merge and create a new automaker
Renault SA and Nissan Motor Co. are in talks to merge and create a new automaker

U.S. equity benchmarks switched between gains and losses on Wednesday as the market struggled to find purchase higher following Tuesday’s technology-driven rout. Dow Jones Industrial Average lost 30 points, or 0.1%, to end at 23,831 after trading up 235 points during the session, while the S&P 500 index slipped by 7 points, or 0.3%, to 2,606, with energy, tech and consumer-discretionary names weighing down on the index.

European equities swung higher Wednesday, as gains for health-care shares led by biopharma company Shire PLC helped offset losses in the battered tech sector. The U.K.’s FTSE 100 index turned higher, finishing up by 0.6% at 7,044.74 while Germany’s DAX 30 fell 0.3% to 11,940.71, but recovered from a deeper loss.

Renault – Nissan merger

Renault SA and Nissan Motor Co. are in talks to merge and create a new automaker that trades as a single stock in a deal would end the current alliance between the companies and marry them as one corporation. Renault currently owns 43 percent of Nissan while the Japanese carmaker has a 15 percent stake in its French counterpart. Carlos Ghosn, the chairman of both companies, is driving the negotiations and would run the combined entity, people with knowledge of the matter said.

Getting a deal done may prove difficult as both the French and Japanese governments would also have to approve the merger and may have strong opinions on where the combined company is domiciled. Renault shares jumped as much as 8.3 percent in early trading Thursday, hitting the highest intraday level in more than a decade.

CME – NEX takeover

U.S. exchange operator CME Group said on Thursday it had reached an agreement to buy Michael Spencer’s NEX Group, valuing the British firm at about 3.9 billion pounds and creating a cross-border trading powerhouse. The offer by CEM, one of the world’s biggest exchange groups and owner of the Chicago Board of Trade and Chicago Mercantile Exchange, represents a 2.9 percent premium to Wednesday’s share close of 972 pence.

Shareholders in NEX, a financial technology firm that matches buyers and sellers of bonds, swaps and currencies, will receive 500 pence in cash for each NEX share and 0.0444 new CME shares. Each NEX share will be valued at 1,000 pence, CME said. Attempts at major exchange mergers, such as the one between the London Stock Exchange (LSE) and Deutsche Boerse, have hit antitrust buffers in recent years, but CME’s expansion by buying NEX could be easier for regulators and politicians to accept. CME said the deal would create significant efficiencies across futures, cash and over-the-counter (OTC) products.

Disclaimer:

This article was issued by Peter Petrov, Junior Trader 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.

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