Ipos In Europe Leapfrog U.s. Amid Cheap Valuations
government shutdown weighs on sentiment. IBEX 35 — The U.S. is facing its first government shutdown in 17 years as the Republican-run House at the weekend voted to delay President Barack Obama’s health care law by one year to keep the government running. Democrats within the U.S. Senate are planning to table the Republican measures when they convene on Monday, leaving the House just hours to pass a stand-alone spending bill free of any measures that undermine the health care law. Budget spending must be agreed by Congress before October 1, to prevent a government shutdown which could involve federal employees facing unpaid temporary leave. The arguments between Democrats and Republicans over the spending bill come ahead of a more crucial challenge to raise the Federal borrowing limit by October 17 in order to avoid a debt default. Meanwhile in Europe, Italy’s FTSE MiB index is expected to open down 85 points at 16,658 on Monday as the government faces another political crisis. Silvio Berlusconi, the leader of the center-right party, which makes up a large part of Italy’s coalition government, ordered a number of his ministers to resign from the cabinet on Saturday , throwing the government into chaos. Italian Prime Minister Enrico Letta said he would go before parliament on Wednesday for a confidence vote. There are no major corporate earnings releases scheduled on Monday. Follow us on Twitter: @CNBCWorld
Line, WeChat: Asian social networks move to conquer Europe
Why is this happening? In part, because Europe is emerging from darker times. While the U.S. came out of the Great Recession in 2009, much of Europe suffered through a double-dip recession. Economic crises in Greece, Ireland and other countries threatened to be contagious. That sent confidence reeling in the Old World. Talk about role reversal. For some time, it seemed, U.S. hopes for a robust recovery were being held back by the risk created by the economic failures of Europe. Now it looks like the public perception here is that our problems are homegrown. The political firmament in Europe looks more solid, buoyed by this month’s election success of German Chancellor Angela Merkel. The consumer confidence measures are important because they tend to signal if shoppers will buy and businesses will hire.
investors bought more than $65 billion of European equities between January and May, the most since before the financial crisis, Goldman Sachs Group Inc. analysts including Sharon Bell and Matthieu Walterspiler said in a research report this month. U.S. funds that invest in European equities attracted $13.1 billion in the six weeks through Sept. 18, Societe Generale SA and EPFR Global data show, even as investors withdrew $16.9 billion from funds buying U.S. stocks. Expensive U.S. equities this year following the S&P 500 Indexs 20 percent surge are making Europe a natural place to look for growth, said Hans Olsen, chief investment officer for the Americas at Barclays Wealth , a unit of Barclays Plc. It is very risky to be overweight at these prices so you start to look somewhere else. The standout was Europe, Olsen said. Member companies in the Euro Stoxx 50 Index are trading at about 13 times this years estimated earnings, compared with more than 19 for companies on the Nasdaq Stock Market and the Nikkei 225 Stock Average, data compiled by Bloomberg show. Moncler, Numbericable Italian clothing maker Moncler plans to list shares as early as November in a sale that could raise about 1 billion euros ($1.35 billion), people familiar with the matter have said. French cable-TV operator Numericable SAS also plans an IPO in the third quarter and could be valued at as much as 5.5 billion euros in the sale. Gross domestic product in the 17-nation euro area rose in the second quarter, bringing to a close six straight quarters of contraction, the longest slump since the euros debut in 1999. The euro meanwhile has gained 5.5 percent against a basket of nine major peers in 2013, the biggest jump in the group and poised for its first annual gain in five years, Bloomberg Correlation-Weighted Currency Indexes show.
Editorial: Europe’s consumer confidence up, U.S. consumers down
A French version of the mobile app, meanwhile, is to be launched before the end of the year. One of the main selling points for Line, which was launched at the beginning of 2011, is its “stickers” — funny, cartoon-like figures that express emotions in a way deemed far more original and fun than traditional emoticons. On WeChat, users can post figures that move about dancing, blowing kisses or punching the air. Both social networks also supply a selection of “stickers” that users have to pay for. “We’re betting a lot on this new form of communication with stickers,” Sunny Kim, assistant director general of Line Europe and America, told AFP on a trip to Paris. This part of the business represents 30 percent of Line’s overall turnover and in July alone, users bought eight million euros ($10.8 million) worth of stickers. The company makes the rest of its money on the sale of games integrated in the mobile app (50 percent) and from partnerships and products on the side. Line’s logo is green with a conversation bubble inside, and looks remarkably similar to the icon of WeChat, which began in January 2011. Already translated into 19 languages, the social network has 500 million users, including 100 million outside of China, and plans to launch in France towards the end of the year. While Line has Real Madrid, WeChat has enrolled the help of Argentinian football star Lionel Messi, who has become ambassador of the brand and has filmed a commercial for the social network. But WeChat — which belongs to China’s web giant Tencent — is also banking on the huge Chinese diaspora to expand. “The French of Chinese origin or the Canadians of Chinese origin, for instance, are the bridge between China and the rest of the world,” said Renaud Edouard-Baraud, who heads up an Asia consulting branch of the BNP-Paribas bank and advises WeChat. Many brands keen to tap into the giant China market also have a presence on WeChat.