Investor Question Market Gains as Europe Faces Demonstrations

Arthi Gupta
17 Sep, 2012
New York City

World markets rested after a week of advance and growing demonstrations in Europe against the austerity measures. On merger Monday, Waste Connections agreed to acquire businesses from R360 Environmental Solutions for $1.3 billion. The Carlyle Group agreed to buy Landmark Aviation.

[R]9:45 AM New York – World markets rested after a week of advance and growing demonstrations in Europe against the austerity measures. On merger Monday, Waste Connections agreed to acquire businesses from R360 Environmental Solutions for $1.3 billion. The Carlyle Group agreed to buy Landmark Aviation.[/R]

U.S. indexes declined after a week of solid advance and stretched market valuation and New York manufacturing contracted in August.

In the week of light economic data investors await housing starts data and weekly jobless claims.

The New York Fed said its general business conditions index fell to a negative 10.41 in September from a negative 5.85 in August.

European indexes pared gains after market indexes soared more than 2% in the region last week for the second week in a row.

The euro zone finance ministers meeting in Cyprus ended with no clear conclusion on Spain and Greek situations and Spanish leader announced another round of austerity to kick-in from September 27.

The leaders also failed to approve a single supervisory banking authority under the European Central Bank overseeing 6,000 banks in the euro zone.

Cities of Madrid and Lisbon saw large demonstrations against the current job cut plans and people marched on the streets. Only four days ago, nearly 1.5 million people demonstrated in Barcelona, Spain demanding alternative ways to restore economic growth and trim government finances.

In Asian news, stocks ended mixed on concerns of inflationary pressures due to the quantitative easing program embarked by the U.S. Federal Reserve.

India''s central bank retained its key interest rate but lowered the cash reserve ratio for banks.

The Reserve Bank of India left the repo rate unchanged at 8% and the reverse repo at 7%. However, the bank reduced the cash reserve ratio by 25 basis points to 4.50% from 4.75%.

The bank said headline wholesale inflation remained sticky at around 7.5% throughout the current financial year so far. While the recent upward revision in diesel prices and rationalization of subsidy for LPG is a significant achievement, in the short-term, there will be pressures on headline inflation.

U.S. Treasury Reduces Stake in AIG

The U.S. Treasury completed a $20.7 billion stock offering of 636.9 million shares of AIG common stock, par value $2.50 per share thereby reducing its investment in AIG to approximately 234.2 million shares of common stock or approximately 15.9% of outstanding shares from approximately 53.4%.

Since May 2011, the Treasury has sold approximately 1.4 billion shares of AIG common stock for total proceeds of approximately $44 billion, including stocks worth $13 billion purchased by AIG.

Carlyle Group to Acquire Landmark Aviation

The Carlyle Group, the global alternative asset manager agreed to acquire Landmark Aviation from GTCR and Platform Partners.

Terms of the transaction were not disclosed but the transaction is expected to close in the fourth quarter.

ICE Agrees to Acquire Stake in APX-ENDEX Business

IntercontinentalExchange, a global regulated futures exchanges operator and gas infrastructure company Gasunie announced an agreement to form a new company based on the derivatives and spot gas exchange of APX-ENDEX.

ICE agreed to acquire a majority stake in the derivatives and spot gas business of APX-ENDEX and Gasunie will retain a shareholding at a similar level to its current APX-ENDEX shareholding.

Under the terms of the agreement, ICE will acquire 79.12% of the derivatives and spot gas business of APX-ENDEX. Gasunie will retain the remaining 20.88% stake.

EPL to Buy Shallow Water Gulf of Mexico Properties

EPL Oil & Gas, Inc. agreed to acquire certain shallow water Gulf of Mexico shelf oil and natural gas interests from Hilcorp Energy GOM Holdings, LLC for $550 million.

The assets are currently producing approximately 10,000 barrels of oil equivalent per day, about 50% of which are oil.

Waste Connections to Acquire R360 Environmental Solutions

Waste Connections, Inc. agreed to acquire the business and operating subsidiaries of R360 Environmental Solutions, Inc. for approximately $1.3 billion in cash. The transaction is expected to occur in the fourth quarter.

Danaher to Acquire IRIS International

Danaher Corporation will acquire all of the outstanding shares of common stock of IRIS International, Inc. at a purchase price of $19.50 per share for a net transaction value of approximately $338 million, including debt assumed and net of cash acquired.

Lowe''s Withdraws Bid for Rona

Lowe''s Companies Inc. formally withdrew its proposal of July 8 to acquire RONA for C$14.50 in cash per share. The transaction worth around C$1.8 billion was rejected by the Canadian home improvement retailer and said it is not in the best interests of the company and its stakeholders.