© Reuters. FILE PHOTO: General view of the Ryanair logo at their headquarters in Dublin, Ireland, September 16, 2021. REUTERS/Clodagh Kilcoyne
By Conor Humphries and Danilo Masoni
DUBLIN (Reuters) -Ryanair is planning to delist from the London Stock Exchange in coming months due to a fall in trading volumes there, executives said on Monday, dealing another blow to London’s status as a global financial center after Brexit.
The Irish airline’s move comes after its British shareholders’ voting rights were restricted post-Brexit and follows miner BHP saying in August it would do away with its dual-listed structure and make Sydney its main listing.
“I think we will probably delist sometime in the next six months,” Ryanair CEO Michael O’Leary told a conference call.
The LSE had no immediate comment.
Brexit had pushed EU stock ownership of the company below 50% – given the UK is no longer part of the bloc – and the “European Commission wants us to be seen to be taking action,” O’Leary said.
Ryanair had said in 2020 that UK nationals, like other non-EU nationals, would from January 2021 no longer be permitted to acquire its ordinary shares – a decision taken to ensure the airline remains majority EU-owned and retains full licensing and flight rights in the bloc after Brexit.
Ryanair has a primary listing on Euronext Dublin and its American Depository Receipts (ADRs) are listed on the U.S. Nasdaq. In 2012 it downgraded its listing on the LSE from premium to standard – hitting daily turnover on the LSE with most volume already migrating to European exchanges.
Monthly trading volume in Ryanair’s London-listed shares averaged 20.5 million in the 10 months to end-October, down almost 68% from the average turnover in 2020, according to Reuters calculations based on Refinitiv data.
Ryanair trading volumes in Dublin have also fallen this year but to a lesser extent. In the 10 months to end-October monthly volume there averaged 35.5 million, down 44% on 2020.
Another high-profile delisting would come as listings on the LSE have fizzled and its main market has underperformed. European stocks have outperformed the British blue chip index by nearly 9 percentage points this year, according to Refinitiv data.
“Many firms may be looking at the and the sheer underperformance and the high costs involved in listing here,” said a sales trader at a local brokerage.
Having two share trading venues, one each in the UK and EU, is considered expensive and particularly onerous for airlines, whose operating licences to fly between destinations within the bloc are reserved for operators that are majority owned and effectively controlled by EU, EEA or Swiss nationals.
“The migration away from the LSE is consistent with a general trend for trading in shares of EU corporates post Brexit,” the airline said in a statement alongside its six-monthly results.
Britain is pushing to keep the City of London as a global financial centre in the aftermath of Brexit, which has largely cut off the UK financial sector from clients in the bloc.
The bulk of trading in euro-denominated shares shifted overnight from London to Amsterdam after Britain fully left the EU on Dec. 31, 2020.
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Morgan Stanley: bear market rally to continue
One of Wall Street’s best-known bears, Michael Wilson, thinks the S&P 500 will rise another 7% before turning down, so the bear market rally will continue for now, writes Market Watch.
After the Dow Jones, S&P 500 and Nasdaq Composite joined their strongest weekly gains since at least May last Friday, Wilson, who is chief strategist and head of U.S. equity markets at Morgan Stanley (NYSE:MS), told clients that there could be another 5% to 7% before the downward trajectory of U.S. stocks resumes during the latest bear market recovery.
Wilson has held a bearish view of the stock market for about 2 years and correctly predicted a sell-off this year.
Wilson explained in a research note sent out to clients on Monday that a pullback in the 38-50% drop in the stock market this year “would not seem like something unnatural, not consistent with the previous bear market rally.”
While growth concerns have triggered a sell-off in commodities and lowered inflation expectations, the fact that the U.S. economy is already slowing and heading toward recession means that any market rally is likely to be short-lived, and U.S. stocks are likely to eventually fall.
Wilson mentioned in the note that the bear market is not over yet, although it may appear otherwise in the next few weeks as the market takes the rate cut as a sign that the Fed can still manage a “soft landing” and prevent a meaningful revision to earnings forecasts.
U.S. stocks rose last week as investors now hope the slowing economy and falling commodity prices may inspire the Fed to raise interest rates less sharply. Federal funds futures, a derivative used by investors to bet on the pace of the Fed’s monetary policy changes, estimate with a high probability that the Fed will be forced to start cutting interest rates again as soon as next summer.
They also consider the lower peak in the federal funds rate: it will peak around 3.5% at the end of 2022 instead of 3.75% just a couple of weeks ago. Wilson also pointed out the drop in Treasury yields: the 10-year Treasury bond yield went from 3.230% to a low of 3.07% on Friday before rebonding again on Monday.
Wilson expects the S&P 500 index to fall to around 3,400 points if the U.S. Federal Reserve manages to get a “soft landing” for the economy — which Fed Chairman Jerome Powell said last week would be “a very difficult thing to do.”
Wilson expects that if the U.S. economy plunges into recession, the S&P 500 index will fall to around 3,000 points. In any case, Wilson believes that U.S. stocks are still highly valued because the risk premium — that is, the measure of compensation that investors receive for the extra risk of owning stocks instead of bonds — remains about 300 basis points higher than the 10-year Treasury bond yield, which is considered a “risk-free rate.”
Easing chip shortages to help Volkswagen in H2 – CEO
© Reuters. FILE PHOTO: Volkswagen logo is pictured at the 2022 New York International Auto Show, in Manhattan, New York City, U.S., April 13, 2022. REUTERS/Brendan McDermid/File Photo
BERLIN (Reuters) – Volkswagen (ETR:VOWG_p) sees a strong second half of 2022 and expects progress in catching up with rival Tesla (NASDAQ:TSLA) as easing chip shortages start to offset supply chain bottlenecks and rising costs, the carmaker’s CEO said on Tuesday.
“We are earning more than ever,” Chief Executive Herbert Diess said at a works meeting, adding Volkswagen is ramping up electric vehicle volumes in its biggest markets in Germany and China thanks to easing semiconductor shortages.
This should allow the carmaker to narrow the Volkswagen-Tesla gap this year and meet its goal of becoming market leader by 2025 if it seizes the moment while the U.S. electric car maker burns cash on large investments, the CEO said.
“Elon (Musk) has to ramp up two highly complex factories in Austin and Gruenheide at the same time – as well as expand production in Shanghai. That’s going to take strength out of him,” Diess said.
Reliance Chairman Mukesh Ambani steps down as director of telecom arm
© Reuters. FILE PHOTO: Mukesh Ambani, Chairman and Managing Director of Reliance Industries, arrives to address the company’s annual general meeting in Mumbai, India July 5, 2018. REUTERS/Francis Mascarenhas
BENGALURU (Reuters) – Reliance Industries Chairman Mukesh Ambani has stepped down as director of Reliance Jio Infocomm Ltd, the conglomerate’s telecom arm said on Tuesday.
Reliance Jio said https://refini.tv/3Nrs773 it has appointed Mukesh’s son and non-executive director Akash Ambani as the chairman of its board. Akash has been involved with the telecom unit since its launch in late 2016, where he started as a director.
India’s telecoms sector had been upended after the entry of Jio, which triggered a price war that forced some rivals out of the market and turned profits into losses.
Jio, which started out offering mobile teleservices, has been aggressively investing in services like internet broadband and forging ties with handset makers to launch low-cost smartphones and providing 5G services.
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