Views on the state of the German economy darkened again in July, according to a key survey, as analysts weighed factors including rising tensions in the Gulf, the US-China trade dispute and uncertainty around the UK’s exit from the EU, the Financial Times reported. The Zew survey of financial market experts indicated deteriorating views on both the current state of and outlook for Europe’s powerhouse industrial economy.
Barely three weeks ago, Daimler AG dialed back profit expectations for the year. The move was seen as a housekeeping exercise to allow Chief Executive Officer Ola Kallenius to start with a clean slate. But on Friday, the Mercedes-Benz maker cut its earnings outlook again -- the fourth warning in just over a year -- suggesting an alarming degree of disarray at the world’s biggest producer of luxury cars at a time when slowing sales and huge investments in new technology are testing the industry, Bloomberg News reported.
Job cuts and restructuring announced by Deutsche Bank AG this week risk making it harder for the German lender to claw back market share at its surviving Asian units, Bloomberg News reported. Over the past five years, Deutsche Bank has fallen down the rankings for Asian debt capital markets and wealth management, while it has lost the top spot to rivals in fixed-income, currencies and commodities trading. Despite these slips, the businesses contributed to a record profit for the firm in the first quarter of 2019.
The number of German corporations going insolvent is expected to rise for the first time since the 2009 economic crisis, Bloomberg News reported. In the latest sign that Europe’s biggest economy could be on the verge of recession, German credit rating agency Creditreform says the trend for company closures is hitting a turning point. The rate of corporate insolvencies sank by just 0.4% in the first half of the year -- 9,900 corporations have already become insolvent -- and a total of 20,000 are expected by the end of 2019.
Investors are becoming increasingly skeptical that Christian Sewing can pull off the biggest overhaul in Deutsche Bank AG’s recent history. What many are certain about: it’s still not the time to own its shares. The stock, which already had the lowest price-to-book ratio of any big European bank, has plunged almost 10% this week and 15% from its Monday peak. sInitial optimism surrounding Chief Executive Officer Christian Sewing’s sweeping revamp has quickly given way to doubts over whether the German lender can reach its profit goals in a competitive home market.
A German company that is developing a lunar lander has filed for insolvency, citing a shortfall in funding, but vows to continue development of its spacecraft. Berlin-based PTScientists announced July 8 that it had filed for “preliminary insolvency” under the German Insolvency Code in a local court July 5, Spacenews reported. That court has appointed an insolvency manager, Sascha Feies, to oversee the company.
Deutsche Bank AG credit investors showed their approval of the German lender’s plans to overhaul its business on Monday with risk gauges falling to fresh lows and its euro subordinated bonds initially rising, Bloomberg News reported. The cost of credit protection on the bank’s riskiest debt fell 15 basis points to its lowest level since March, according to ICE Data Services. Deutsche Bank’s riskiest bonds, that stand first in line for losses if the lender runs into trouble, rose as much as 0.5 cents on the euro in early trading to the highest level since April. The bonds later pared gains.
Deutsche Bank's capital-boosting Additional Tier I (AT1) debt issues fell on Monday on worries over future challenges Germany's biggest lender may face in a planned overhaul, the International New York Times reported on a Reuters story. Concerns centered on Deutsche Bank's decision to lower minimum capital buffers, a pool of assets designed to absorb losses, after it launched one of the biggest overhauls of its investment bank since the 2008 financial crisis on Sunday. The debt had earlier risen after Deutsche Bank said it will pay coupons on its bank capital debt.
German engine block and cylinder head maker Weber Automotive has filed for insolvency, following a spat between its family owners and French private equity group Ardian about the right restructuring strategy, Reuters reported. Finances have deteriorated despite solid orders, Weber Automotive said in a statement on Monday as it announced the filing, adding that the owners lacked unity about future financing of the maker of drivetrain components.
A key gauge of the health of Germany’s manufacturing industry sank by far more than expected in May, adding to concerns about the health of the global economy ahead of the release of key US economic data. A steep drop-off in foreign demand is hitting factories across the eurozone and raising expectations that the European Central Bank will revive its crisis-era stimulus, the Financial Times reported. Manufacturing orders in Germany dropped 2.2 per cent month-on-month in May, and were down 8.6 per cent from the same month in 2018.