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Renault-Nissan merger idea revived

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Today’s article gives an overview of the Maltese, European and U.S. markets on Monday, together with latest news Renault – Nissan merger

The Maltese market closed in the green on Monday, with MSE Equity Total Return Index ending the session 0.015% higher, to 9,485.311 points. Best performer was Fimbank plc by jumping 3.68% to close at 0.705, followed by Mapfre Middlesea plc and MIDI plc with 1.69% gain to close at 2.40 and 0.60 respectively. BMIT Technologies plc also closed on the positive note by adding 0.95% to 0.53. Plaza Centres rose 0.97% to 1.04, while PG plc added 0.65% to close at 1.55. Biggest fall was seen from GO plc with the loss of 2.17% to close at 4.5. Followed by Bank of Valletta plc and HSBC Bank Malta plc which shed 0.75% and 0.58% to close at 1.325 and 1.72 respectively. Malta International Airport plc, Grand Harbour Marina plc and Main Street Complex plc were active but closed unchanged.

European markets finished higher today with shares in France leading the region. The pan-European STOXX 600 was up 0.08% to close at 391.32, while Germany’s DAX added 0.10% to close at 12,328.02. London’s FTSE 100 Index rose 0.17% to 7,440.66 and France’s CAC 40 Index gained 0.21% to close at 5,580.98.

US Market Indexes Close Higher Monday With key Inflation Report, The Dow Jones Industrial Average closed at 26,554.39 with a gain of 0.04%. The S&P 500 closed at 2,943.03 for a gain of 0.11%. The Nasdaq Composite closed at 8,161.85 for a gain of 0.19%.

Nissan Shoots Down Renault Merger Proposal

A merger between long-time alliance partners Renault SA and Nissan Motor Co would codify a global automotive pecking order dominated by three mega players, putting pressure on everyone else to bulk up or risk being left behind. They just need to find a way to agree.

Renault-Nissan’s structure has been in desperate need of reform for years. Nissan now is larger than Renault in terms of sales but doesn’t have a say in its partner. The imbalanced relationship has caused tension between the two in the past. The issue came to a head in 2015 when the French government – which owns 15% of Renault – thwarted Nissan’s push for voting rights.

Ghosn, a domineering figure in France and Japan, held the factions together by force of personality and executive roles at both carmakers. However, the shortcomings were laid bare by the 65-year-old’s arrest in November on allegations of financial wrongdoing – charges he’s repeatedly denied. He’s currently free on bail awaiting a trial that may begin later this year.

They also benefit from each other’s complementary geographic footprint: Renault is stronger in Europe, while Nissan provides links to the United States, where the French carmaker is absent, and greater scale in China. Breaking up that structure would be costly and potentially disastrous, given the disruption gripping the auto industry.

Merger risks even so, full-scale auto mergers are a huge challenge. The road is littered with failed tie-ups such as the ill-fated DaimlerChrysler and BMW’s failed takeover of Rover. General Motors Co unloaded German unit Opel after decades of struggles, while Ford disbanded its collection of luxury brands, including Volvo, Jaguar and Aston Martin.

Still, there is increasing urgency for Renault and Nissan to find a way forward.

This article was issued by Nadiia Grech, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are 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.