Ministers to Discuss European Banking Union, Rosneft to Buy TNK-BP Stake

Arthi Gupta
12 Dec, 2012
New York City

European ministers are expected advance banking union negotiations today. Greece plans to buyback

[R]1:50 PM Frankfurt – European ministers are expected advance banking union negotiations today. Greece plans to buyback €31.9 billion worth of bonds from private investors. Euro zone industrial production fell in October. The UK claimant count declined in November.[/R]

The European indexes extended a 3-week rally as investors turned optimistic of a banking union deal in the region ahead of the finance ministers’ meeting in Brussels today.

In addition, investors are looking at the U.S. Fed announcement to continue its program of bond buying to support the government spending and housing market.

Greece said it received it interest in its buyback program for €31.9 billion or $41.15 billion of its bonds from private investors at an average price of around 33.8 cents on the euro.

Rosneft Acquires AAR Stake

Rosneft’ NK OAO, the Russia-based oil and gas explorer signed an agreement to purchase from the AAR Consortium (Alfa Group, Access Industries and Renova) its 50% stake in TNK-BP. The purchase price in the transaction is determined based on the base value of AAR’s stake in TNK-BP of $28 billion.

The deal is expected to complete in the first half of 2013.

In Paris trading, the CAC-40 Index rose 0.27 or 0.01% to 3,646.32 and in Frankfurt the DAX Index edged higher 22.32 or 0.3% to 7,611.81.

The yields on Spain’s benchmark fell five basis points to 5.41%. Italian 10-year yields fell three basis points to 4.69%.

Euro Zone Output Falls

Industrial production in the euro zone declined in October, data released by Eurostat showed.

Production dropped 1.4% from a month ago in October after a 2.3% fall in September.

Production of durable consumer goods fell 3.8% on a monthly basis while output of capital goods decreased 3% in October.

Annually, total industrial production declined 3.6% in October from the 2.8% decline in September.

UK Jobless Claims Drop

The jobless claims in the UK dropped 3,000 on a monthly basis to 1.58 million in November, the Office for National Statistics said today.

The claimant count rate held steady at 4.8% for November.

During three months to October, there were 2.51 million unemployed people, down 82,000 on May to July and down 128,000 on a year earlier. The jobless rate was 7.8% from a year ago.

French Inflation Eases, Deficit Narrows

France''s consumer price index eased to 1.4% in November from 1.9% in October, the statistics office Insee said. The index dropped 0.2% from a month ago in November, offsetting an increase of 0.2% in October.

The largest downward pressures on the change in the CPI of November resulted from a decrease in energy prices.

Separately, France''s current account deficit narrowed to €2.8 billion in October from €3.4 billion in September, data from Bank of France showed.

The deficit on goods account rose slightly to €5.1 billion in October from €5 billion a month earlier.

German Inflation Rises

Consumer prices in Germany rose 1.9% annually in November, final data published by the Federal Statistics Office showed.

From a month ago, the consumer price index fell 0.1% in November.