With US markets closed for Presidents Day European markets have started the week positively despite concerns about ongoing political uncertainty across Europe.
On the downside Unilever (LON:ULVR) shares have slipped back after the surprisingly quick capitulation by Kraft Heinz on its takeover bid for the Anglo Dutch consumer group. There had been widespread speculation that this bid may well have turned out to be a rather protracted affair given some of the politics involved. Kraft’s quick about turn appears to have drawn a line under that, over concerns that any public battle could have the potential to turn increasingly bitter.
Kraft’s track record on this was also undoubtedly a factor particularly given the Cadbury experience in 2010. While the share price fall is its biggest in thirteen years, the shares are still higher than they were prior to the Kraft bid becoming public. While this bid appears to have fallen at the first fence it undoubtedly keeps the focus on a sector that could see further consolidation.
Royal Bank of Scotland’s share price is enjoying a welcome boost, and is now back above its pre Brexit levels on news that it now won’t have to offload its Williams and Glyns branches which it was informed it would have to sell as part of its bailout package in 2008. It’s just a shame it’s taken nearly £2bn of taxpayers money to realise that this was always going to be an extraordinarily difficult process to achieve. Whether these gains are sustainable will very much depend on how much of a loss the company posts when it releases its full year results on Friday this week.
Beleaguered engineering group Rolls Royce (LON:RR) is also having a good day after a broker upgrade from Goldman Sachs (NYSE:GS), with the broker citing the potential for significant improvement in cash flow over the course of the next few years.
Eurogroup finance ministers are in Brussels today to discuss the latest bailout program for Greece with the IMF and EU no closer to aligning an approach that would result in a lessening of the tensions between the two.
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