May 19, 2014 / 5:25 AM / 4 years ago

European Factors to Watch- Shares seen flat, DB to lag after cap hike

LONDON, May 19 (Reuters) - European stocks were seen opening flat on Monday,
with lender Deutsche Bank set to lag after it launched an 8 billion euro capital
hike, while broader sentiment was capped by an uncertain economic picture.
    At 0628 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were between flat and
0.2 percent lower.
    News that China is tightening its grip on interbank lending to defuse risks
in shadow banks capped investor sentiment in Asia overnight.
    After disappointing economic data from some key euro zone countries last
week, investors were reluctant to push main regional indexes to multi-year highs
hit last week in the absence of fresh positive catalysts.
    Shares in Deutsche Bank were set to open 1.1 percent lower,
according to early indications, as the lender unveiled plans to raise 8 billion
euros ($11 billion) in new capital, in its third capital increase since 2010.
    "Plenty for both the bulls and bears in this announcement," a sales trader
wrote in a comment to clients. "I think it's worth noting that on a day trade,
buyers will look to buy on severe weakness as opposed to sell into strength, but
the weight of stock coming to market and dilution worries me that these can
trade (lower)."
    Deutsche's cap hike triggered a price target cut at Citi, which, however,
kept its "buy" recommendation on the stock arguing the move will allow Deutsche
to close its capital gap versus peers.
    A few ECB policy makers will speak publicly later in the day, including
Governing Council member Jens Weidmann, Executive Board member Yves Mersch.     
    Europe bourses in 2014: (
    Asset performance in 2014: (
                                               LAST     PCT CHG       NET CHG
 S&P 500                                   1,877.86      0.37 %          7.01
 NIKKEI                                    14006.44     -0.64 %        -90.15
 MSCI ASIA EX-JP                             484.86     -0.23 %         -1.12
 EUR/USD                                     1.3712      0.15 %        0.0020
 USD/JPY                                     101.31     -0.18 %       -0.1800
 10-YR US TSY YLD                             2.511          --         -0.01
 10-YR BUND YLD                               1.324          --         -0.01
 SPOT GOLD                                $1,295.80      0.21 %         $2.71
 US CRUDE                                   $102.31      0.28 %          0.29
  > GLOBAL MARKETS-Asian shares soft, China slowdown fears resurface 
  > US STOCKS-Wall St rebounds with small-caps                        
  > Nikkei flat as stronger yen caps risk appetite                    
  > TREASURIES-Yields rise on strong housing data                     
  > Euro off to subdued start, PMIs in focus this week                
  > Gold steadies below $1,300; platinum gains as strikes drag on     
  > Copper hits 11-wk high on tight supply                            
  > Brent rises to $110 on Libya violence, fall in output             
    Germany's Siemens is working on a formal asset-swap offer for
Alstom's power business that could come as early as this week and see France
take a stake in a resulting rail-focused French group, sources close to the
talks told Reuters. 
    China Southern Airlines Co Ltd  said on Friday it has
ordered 80 aircraft from the European planemaker worth at least $7.3 billion.
    Meanwhile, the EU is considering raising the pressure on the United States
in the world's largest trade dispute by challenging tax breaks that encouraged
planemaker Boeing to keep production of its latest jet in Washington
state, people familiar with the matter told Reuters. 
    Gaillon Invest, the investment vehicle behind a takeover bid for the French
holiday firm, has taken an emergency legal action against shareholder Benetton
after the family stopped backing the deal, a source familiar with the matter
    Total shareholders agreed to raise the age limit for the oil group's
chairman and chief executive, a move that paves the way for Christophe de
Margerie to extend his term at the helm of France's largest listed company.
    The world's largest zinc smelter said it had agreed a funding package with
the Australian government to upgrade and expand its 125-year-old lead smelter in
Port Pirie, Australia. 
    Convicted rogue trader Jerome Kerviel was arrested in southern France late
on Sunday to serve a three-year jail sentence in a high-profile case he has
depicted as one individual's struggle against high finance. 
    The UK-listed drugmaker rejected a final offer from Pfizer, after
the U.S. pharmaceutical said on Sunday it had raised its offer for AstraZeneca
to 69.3 billion pounds ($116.6 billion), or 55 pounds a share, and would walk
away if AstraZeneca did not accept it.  
    Chinese corruption charges against executives of British drugmaker
GlaxoSmithKline Plc could be just the start of the pharmaceutical industry's
problems in its biggest emerging drugs market, according to industry sources in
    Royal Bank of Scotland said on Sunday it is winding down its interest-rate
trading business as capital and operating costs increase. 
    Global miner Rio Tinto is not actively seeking to divest assets this year
but would consider any attractive offers, Chief Executive Sam Walsh said late on
    Revenue at the world's 10 largest investment banks fell nine percent to
$42.8 billion in the first quarter, new data showed on Monday, as tough new
rules forcing banks to hold more capital led to a retreat from riskier types of
    The lender launched plans to raise 8 billion euros ($10.96 billion) in new
capital on Sunday with the Qatari royal family a major new investor, in a bid by
Germany's largest bank to end questions about its capital strength.
    Related news 
    The sportswear giant's long-serving chief executive said preparing the
company for a change at the top when his contract expires in 2017 will be among
the CEO's biggest priorities, Sueddeutsche Zeitung reported on Saturday, citing
an interview. 
    Related news 
    The luxury carmaker plans to announce in July that it will build its first
assembly plant in Mexico and has earmarked two regions where the site could be
built, Automobilwoche reported on Sunday, without citing the source of the
    Related news 
    Germany's cartel office has "clear evidence" that the mail company's dumping
prices made it difficult for rivals to compete, Frankfurter Allgemeine Zeitung
reported on Sunday, citing the head of the cartel office.
    Related news    
    The industrial gases maker is open to smaller acquisitions, Boersen-Zeitung
reported on Saturday, citing an interview with finance chief Georg Denoke.
    Related news 
    The software company will continue its cloud-oriented strategy and is open
to acquisitions, Euro am Sonntag reported, citing SAP's designated finance
    The company may focus on closing smaller facilities as it plans to cut
between 1,500 and 2,500 jobs, Wirtschaftswoche reported on Saturday without
providing detail, citing people familiar with the situation.
    Related news 

 (Reporting By Francesco Canepa; Editing by Alistair Smout)
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