Europe

China’s surprisingly weak trade data brought a four-day rally in European shares to a halt on Monday, with luxury goods and technology stocks leading the drop as investors fretted about slowing global growth and weaker-than-expected earnings, The Irish Times reported. Trading volumes fell below average on the Irish market on Monday with the Iseq overall index dipping 0.54 per cent. The smaller Iseq 20 index was led lower by Swiss-Irish baking group Aryzta which dropped 8.4 per cent to €1.05. Traders noted the stock has been quite volatile of late, moving between 95c and €1.15.

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This week’s collapse of Greece’s coalition government comes at a delicate time for the country’s suffering financial sector, the Financial Times reported. Over the weekend Alexis Tsipras, prime minister, called a confidence vote in his government after Panos Kammenos, defence minister, resigned in protest over a deal with Macedonia to end a dispute over its name. If the Syriza government loses, there will be early elections. This would, temporarily at least, disrupt plans for government involvement in much-needed bank reform.

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Eurozone manufacturers’ limp performance in November has crushed hopes of a resurgence in regional growth in the final quarter of last year, the Financial Times reported. Eurostat, the European Commission’s statistics bureau, said on Monday that industrial production fell by 1.7 per cent between October and November. The fall, which followed a gain of just 0.1 per cent in October, was the sharpest since February 2016 and highlighted the pressures on the single currency’s manufacturers as global trade faltered.

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UBS Asset Management has turned bullish on beaten down Asia junk dollar bonds and expects investors to buy more on borrowed money due to the appeal of higher yields, Bloomberg News reported. The firm is positive on such securities from Chinese property companies in particular, its key overweight globally within high yield. The money manager expects China’s stimulus measures to help borrowers gain access to funding onshore, reducing offshore bond sales. Despite a recent rally in Asia junk securities, yields are still near the highest since 2012, according to a Bloomberg Barclays Index.

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New Look Retail Group Ltd. joined a long list of U.K. retailers seeking debt relief as it announced a deal to reduce its 1.35 billion pounds ($1.74 billion) of bonds and loans, Bloomberg News reported. Many more are looking for advice on restructuring their balance sheets. The 50-year-old fashion chain agreed with a group of creditors to forfeit their claims in return for new bonds and majority control of the restructured business, according to a statement on Monday.

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Banca Monte dei Paschi di Siena SpA just can’t seem to put its troubles behind it. After more than a year of digging itself out from a collapse that ended in a state takeover, the Tuscan lender faces renewed concerns about its capital and profitability, Bloomberg News reported. Along with Banca Carige SpA’s struggles, that’s adding to the perception that Italian banking at large is still far from fixed. Shares of the world’s oldest bank dropped in Milan trading after the European Central Bank highlighted weaknesses in the Italian lender’s capital and profitability.

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Shares in Debenhams, the British department store chain that is fighting for survival, plunged as much as 22 percent on Friday as its new interim chairman began the task of trying to find a consensus among investors on the way forward, Reuters reported. On Thursday, two major Debenhams shareholders - Mike Ashley’s Sports Direct and Middle Eastern investor Landmark Group - forced Chief Executive Sergio Bucher off the board and Chairman Ian Cheshire out of the company following a drop in Christmas sales.

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Eurozone labour productivity has stopped growing for the first time in a decade, adding to fears about its economic climate, the Financial Times reported. Four of the five largest eurozone economies had negative annual labour productivity growth in the third quarter of 2018 — the first time since 2009 there has been such an across-the-board fall. The data were confirmed by updated figures on Friday from Eurostat, the EU’s statistics agency. The disappointing productivity growth figures follow a flow of poor economic data from the eurozone in the second half of 2018.

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A venture led by Richard Branson’s Virgin Atlantic Airways Ltd. scooped up Flybe Group Plc for a penny a share, all but wiping out the value of the British regional carrier hit by dwindling passenger numbers, higher oil prices and uncertainty surrounding Brexit, Bloomberg News reported. Virgin, Cyrus Capital and airport operator Stobart Group Ltd. agreed to purchase Flybe for 2.2 million pounds ($2.8 million), according to a statement Friday.

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Banca Monte dei Paschi di Siena SpA is preparing to sell covered bonds and will contact possible investors as soon as next week, a person with knowledge of the matter said. Monte Paschi is attempting to issue the debt after it was unable to complete the second tranche of a bond sale last year amid market turmoil, Bloomberg News reported. The lender said in a statement late Friday that the European Central Bank warned in a letter that its capital position was weaker after abandoning last year’s sale.

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