Praxair Linde merger takes one step forward and S&P downgrades SA

Chemical company, Linde has received approval from 90% of its shareholders for the planned $80bn merger with US-based Praxair. Praxair added 0.76%, or $1.16, to close at $152.88 per share, while German-based Linde gained 0.46% as it moved to settle at €191.00 per share. However, it must be noted that despite the approval, the deal is still subject to a number of regulatory approvals. If the merger completes, the newly formed group will be the new global leader in industrial gases with revenues of $28.7bn and around 88,000 staff.

In currencies, the rand endured a volatile session on Friday, as investors waited for both S&P Global Ratings and Moody’s credit rating announcements. After a previous close of R13.88/$ on Thursday, the rand started poorly dropping to R14.036/$ at 12:45. However, the local currency clawed back some of its losses making a high of R13.83/$ at 20:00. By 22:45, the rand was still hovering at R13.88/$, before slumping to R14.15/$ as currency markets closed and news broke S&P Global Ratings had downgraded South Africa’s local currency debt to junk. Critically, Moody’s did not downgrade, but did place South Africa on review for a downgrade which means the country stays in the Citi World Government Bond Index. The rand is currently recovering from Friday’s knee-jerk close and is just below R14.08/$ this morning.

In Asia, markets are mostly lower, with the exception of the Australian ASX, as investors kept an eye on developments in Chinese bond markets. The Shanghai Composite led the declines, with the index dropping 0.81% to 3,326.82 index points at the break. The Hang Seng also traded lower, down 0.4%, with the index set to partially erase Friday’s 0.53% increase. The Japanese Nikkei was also in negative territory this morning, down 0.23%, on track to end lower for the first time in four sessions. The Australian ASX bucked the trend as it added 0.02% to 6,064.30 index points.

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