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* Henderson/Janus deal lifts shares of fund managers
* German DAX market closed for public holiday
* STOXX 600 still down around 6 pct in 2016
By Sudip Kar-Gupta
LONDON, Oct 3 European stock markets made minor
gains on Monday, as a rise in the shares of fund management
companies in the wake of a large merger in the sector propped up
Nevertheless, lingering concerns over Deutsche Bank
still weighed on the minds of some investors.
The pan-European STOXX 600 index was up 0.2
percent, although the index remained down by around 6 percent
since the start of 2016.
Britain's FTSE 100 rose 1.2 percent, partly helped
by a drop in sterling, as a weaker pound typically benefits the
FTSE's export-driven, internationally focused companies. The
currency fell after Prime Minister Theresa May set a March
deadline to start the formal departure process for Britain's
exit from the European Union.
Shares in fund management companies rose after Britain's
Henderson Global Investors agreed to an all-share $6
billion merger with Janus Capital.
Henderson shares surged 18 percent, while rivals such as
Aberdeen Asset Management, Jupiter and Schroders
rose 5 percent, 4 percent and 2 percent respectively.
"Given the increased scale, this deal may kick off a round
of merger speculation involving other asset managers such as
Jupiter," said Cantor Fitzgerald analyst Keith Baird.
Although Deutsche Bank's main German-listed shares were not
trading due to a public holiday, the company's woes remained at
the forefront for many investors.
Deutsche Bank is throwing its energies into reaching a
settlement before next month's presidential election with U.S.
authorities demanding a fine of up to $14 billion for
mis-selling mortgage-backed securities.
City of London Markets Limited trader Markus Huber said some
traders were encouraged by signs that Deutsche Bank - whose
shares closed up 6.4 percent in Frankfurt on Friday - could
agree on a fine far less than $14 billion.
Analysts at JP Morgan and Morgan Stanley have forecast
Deutsche Bank could reach a settlement in the $5.4-$6 billion
However, other traders said Deutsche Bank's shares would
remain under pressure while there was no deal, with Deutsche
Bank still down around 50 percent since the start of 2016 while
the STOXX Europe 600 bank index is down 20 percent.
"The European banking system is clearly going through tough
times, with high levels of non-performing loans, squeezed
margins due to negative interest rates, tougher regulations,
weak economic growth and competition with the fintech industry
booming," said FXTM chief market strategist Hussein Sayed.
(Editing by Jon Boyle)