Sainsbury Snag Adds $336 Million to Qatar's European Problems

(Bloomberg) -- The day a major deal hits a snag is never a good one for investors, and Wednesday must have been particularly annoying for the Qatar Investment Authority.

QIA is J Sainsbury Plc’s largest shareholder, controlling more than a fifth of the British grocery chain. The value of that holding fell by about 257 million pounds ($336 million) Wednesday, data compiled by Bloomberg show, on news that the grocer’s planned tie-up with Asda hadn’t passed muster with regulators.

Supermarkets aren’t the only European investments looking dubious for Qatar, which has one of the world’s largest sovereign-wealth funds, with more than $320 billion in assets. In addition to U.K. real estate, which is in the midst of a slump as Brexit scares away buyers and a retail decline hurts shops, QIA’s publicly traded Europe portfolio also includes a number of firms that have been falling.

A representative for QIA didn’t immediately respond to a request for comment. The share moves below don’t necessarily reflect the firm’s overall performance because they don’t take into account the entire portfolio or QIA’s hedging strategies.

  • Deutsche Bank AG, where Qatar’s ruling Al Thani family has invested, is down 47 percent in U.S. trading in the past year. Revenue is contracting and efforts to salvage the business weren’t helped by a raid last year on the bank’s headquarters as law enforcement searched for information tied to the Panama Papers.
  • Glencore Plc, which has been caught up in a U.S. corruption probe and fallout from U.S. sanctions on Russia, is down 25 percent in the last 12 months.
  • While it’s recovered some ground this year, Volkswagen AG has declined about 9 percent in the last 12 months. The German carmaker’s stock has been hit with concerns about U.S. tariffs and a shrinking market in China.
  • Russia’s Rosneft PJSC, which is vulnerable to volatile oil prices as well as U.S. sanctions on Venezuela, is owed $2.3 billion by the South American country’s state oil producer and controls stakes in a number of oil ventures there. Its shares are down 6.2 percent this year.
  • Credit Suisse Group AG is down 32 percent in the last 12 months as the company’s trading business was hit by a volatile stock market and a sweeping three-year restructuring program took its toll on revenues. Still, QIA, which is the bank’s top shareholder, also owned convertible bonds, which paid out annual coupons of 9 percent to 9.5 percent.

Though the news isn’t all bad.

  • EDP-Energias de Portugal SA has gained about 6.6 percent since the start of the year. China Three Gorges Corp. has been in talks to make a bid to take control of the company, and the 9.1 billion euro ($10.3 billion) offer has been criticized by activist Elliott Advisors Ltd. as too low.
  • Iberdrola SA is up 5.4 percent in 2019 after the Spanish utility posted better-than-expected earnings for last year and announced a share buyback of up to 1.15 billion euros.
  • London Stock Exchange Group Plc is up 11 percent this year. The bourse got some good news this month after Bank of England and European Union regulators agreed to cooperate on oversight of clearinghouses, in the latest move by authorities to prevent problems stemming from a no-deal Brexit scenario.

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