Markets overview
European markets finished in the red on Monday as investors digested yesterday's announcement that famous construction firm Carillion will go into liquidation after failing to secure a deal with its creditors and the United Kingdom government to save the company. Trading was relatively slow as the markets in the United States remained closed due to the Martin Luther King, Jr. Day celebration.
German DAX lost 0.34% at the end of the trading session. Lufthansa was the main loser, down 4.17%.In London, the FTSE 100 declined 0.12%. The main focus remained government contractor Carillion amid the liquidation ordeal which also threatened the loss of over 20,000 jobs.France's CAC 40 fell 0.13% at the close.
Carillion into liquidation
Construction firm Carillion plc announced it will go into liquidation after failing to secure a deal with its creditors and the United Kingdom government to save the company.
"Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future," the construction firm's chairman, Philip Green said. "In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision," he added.
However, Green pointed out the UK government agreed to provide funding "to maintain the public services carried on by Carillion staff, subcontractors and suppliers." The National Health Service, schools, prisons, the army are among institutions for which Carillion provides services.
Carillion has 43,000 employees on a global level out of which 20,000 are in the UK. The company hasn't stated how the staff will be affected by the liquidation.
Shares in Carillion, listed on the London Stock Exchange were suspended today at a price of 0.142 pence each.
On the other hand, Shares in Carillion rivals saw a spike as Carillion’s contracts, now in the hands of its rivals, helped lift some of those companies’ shares. Constructions and services companies Interserve PLC, outsourcer Serco Group Plc and builder Costain Group Plc all raised to the occasion.
Airbus: No Emirates No. A380
Aircraft manufacturing giant Airbus SE will have to discontinue its A380 superjumbo model if no deal is reached with Emirates for an order of at least six planes a year over the course of eight to ten years. "If we can't work out a deal with Emirates I think there is no choice but to shut down the program," Leahy stated, adding that "they are probably the only one in the marketplace'' who can secure enough orders in the next 10 years. A380's average price currently stands at $445.6 million.
The plane-maker said the minimum number it is willing to build every year is six, but due to weak demand, the production of the world's largest passenger aircraft might have to be halted. Nevertheless, the production of 12 units of the model is planned for 2018 and another eight in 2019.
Meanwhile, Airbus reported its best year to date in 2017, with a record number of orders. The latest order of 184 units was from China, during French President Emanuel Macron's official visit to Beijing.
Disclaimer:
This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.