Spain unlikely to prolong Europe bank aid programme
yet, so its too early to start cheering, said Peter Dixon, strategist at Commerzbank in London. There is no real reason to expect markets to rally strongly from here. If we do get some gains it could turn out to be a temporary relief rally, which could be pulled back when earnings start to bite, he added. On the longer term, however, there should be more room for upside. By the year-end or early 2014 there should be more scope for a modest uptrend triggered by expectations for a better outlook for 2014, especially in the U.S. And of course, we would expect to see tapering come back onto the agenda. Investors will start to rotate out of fixed income and into equities, Dixon said. Among notable movers in the index, shares of Rio Tinto PLC /quotes/zigman/155899 UK:RIO +4.25% /quotes/zigman/182541/quotes/nls/rio RIO +2.69% /quotes/zigman/176317 AU:RIO +2.51% gained 4.3% after the heavyweight miner said its iron-ore output rose to a new quarterly record . /quotes/zigman/68270/quotes/nls/aapl AAPL +0.64% named the luxury-goods firms Chief Executive Angela Ahrendts as senior vice president of retail and online stores. U.S. deal optimism More broadly, investors in Europe welcomed developments in the fiscal negotiations in U.S., with the debt ceiling looming and the government shutdown moving into Day 15. On the Senate floor on Monday, Senate Majority Leader Harry Reid said he was very optimistic about concluding deals this week to raise the debt limit as well as end the government shutdown. Sen. Mitch McConnell, the minority leader, said he shared Reids feeling that well get a result thats acceptable to both sides. On Tuesday, media reports said House Republicans will push for a separate bill containing the same extensions to the debt ceiling and budget, but delays the medical-device tax for two years and turns off the Treasurys capability to use so-called extraordinary measures.
“In Dubai, tourism is not just an extra, it’s not just a nice thing to have. It is fundamental to how the whole state will develop,” said James Philipps, vice-president for Europe, Middle East and Africa at Fit Hotel Sourcing, which is part of the GTA Travel group. Chinese tourists in Paris on March 27, 2013 (AFP Photo/Eric Feferberg) When it comes to increasing its competitive advantage, the Gulf emirate has no space constraints for the construction of breathtaking hotels and other infrastructure that will pull in tourists, Phillips added. In contrast, travel agents in Europe often have to battle to find places for their customers to stay in major tourist draws such as Venice and Rome in Italy, and Paris in France. The problem affects travellers from both emerging markets and more traditional tourist source countries. “We have some concerns over inventories in some of the major cities. Paris is really tough. It’s really hard to find a good fit in places like Paris,” said Jennifer Tombaugh, head of US company Tauck, told congress participants. Given the clogged market in many classic tourist hubs, family firm Tauck has opted to develop off the beaten track, and focusses on the niche market of river cruises. It offers US tourists a different take on France, as their vessel winds down the River Rhone, stopping at what it pitches as hidden treasures such as the small medieval town of Viviers in the Ardeche region. There, they can take a class in petanque, the typically-French bowling game.
Europe shares rise on renewed hopes for U.S. debt deal
Credit: Reuters/Francois Lenoir LUXEMBOURG | Tue Oct 15, 2013 9:46am EDT LUXEMBOURG (Reuters) – Spain will probably bring an end to the programme of international aid for its banks on schedule this year, Economy Minister Luis de Guindos told a news conference in Luxembourg on Tuesday. Madrid turned to Europe last year for 41 billion euros ($56 billion) to help the weakest of its banks, which have been crippled by the collapse of its real estate market and resulting mass of failed loans to developers and houseowners. With the economic fortunes of Europe’s debt-ridden southern half showing signs of improving, a senior official in Brussels told Reuters last week that Spain was unlikely to seek more financial aid for the banks when the current programme runs out. “The central scenario, and the most probable one, is that on November 15 (it will be decided that) Spain’s banking programme will come to a close,” de Guindos told reporters at a meeting of European Union finance ministers. The European Central Bank and the European Commission, which backed the rescue, last month said in a review of Spanish banking reforms that the sector remained comfortably solvent, and praised its turnaround. They stressed, however, that Spain’s weak economy – set to emerge from a two-year recession by the end of the year – and a fall-off in lending still posed a risk. Like their European peers, Spanish banks also face a European review of their balance sheets early next year before the ECB takes over as supervisor. Some believe their restructured or refinanced loans could come under particular scrutiny, and that they could be told to put more cash aside to counter potential losses on these, banking sources in Madrid have said. Any capital gap that that process leaves is likely to be manageable, though smaller banks that are owned by the state are unlikely to be able to turn to the market like some of their peers. The Spanish government currently estimates that lenders will have to put aside an extra 5 billion euros in provisions to counter such losses, a source at the Economy Ministry said. “The general perception is that in Europe the banking system has not been as thoroughly cleaned up as in the United States … which is among the elements holding back economic growth in Europe,” de Guindos told the news conference, in reference to the European review of banks’ books. (Reporting by Robin Emmott and Martin Santa in Luxembourg, Sonya Dowsett, Jose Elias Rodriguez and Jesus Aguado in Madrid; Writing by Sarah White; editing by Patrick Graham) Tweet this
Innovate off the beaten track, says Europe’s tourism sector
debt deal Tue Oct 15, 2013 3:58am EDT * FTSEurofirst 300 up 0.5 pct, Euro STOXX 50 up 0.4 pct * DAX hits record high, CAC 40 reaches 5-year high * Burberry drops 5 pct after CEO leaves * Nexans sinks 13 pct on profit warning, capital increase By Blaise Robinson PARIS, Oct 15 (Reuters) – European shares rose early on Tuesday, gaining ground for the fourth session in a row, boosted by signs that a deal could soon be reached in Washington to avert a damaging debt default. At 0726 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,259.15 points, while the euro zone’s blue-chip Euro STOXX 50 index added 0.4 percent to 2,988.35 points, hitting a fresh 2-1/2 year high. Positive signals from talks on Monday between Democrat and Republican Senate leaders fuelled hopes of an imminent deal to reopen shuttered U.S. federal agencies and prevent a default on federal debt, sending world stocks higher. “Relief that politicians have taken the U.S. to the edge and back again is clear,” said Keith Bowman, equity analyst at Hargreaves Lansdown. The plan under discussion would end a partial government shutdown and raise the debt ceiling by enough to cover the nation’s borrowing needs at least until mid-February 2014. Around Europe, the UK’s FTSE 100 index was up 0.6 percent, France’s CAC 40 was up 0.3 percent, reaching a five-year high, and Germany’s DAX index was up 0.5 percent, hitting a record high. “The consensus is bullish, everyone believes that a deal will be reached, so it could already be priced in,” said Guillaume Dumans, co-head of research firm 2Bremans. “Deal or no deal, the size of the U.S. Casino rose 3.6 percent after the French supermarket chain said sales growth accelerated in the third quarter thanks to robust demand in Brazil. French cable maker Nexans plummeted 13 percent after slashing its profit outlook and unveiling a capital increase. Investors will keep a close eye on U.S. corporate results on Tuesday, with several major U.S. companies including Citigroup , Intel, Johnson & Johnson and Yahoo scheduled to report earnings.