EON, RWE Slump as Carbon-Law Fix Proposal Fails: Frankfurt Mover
EON SE and RWE AG (RWE), Germany’s two largest utilities, plunged in Frankfurt trading after the European Parliament rejected a proposed change to emission- trading rules that would allow the supply of carbon permits to be curbed temporarily.
The European Union assembly voted against a plan to delay the issuing of some new allowances in the 2013-2020 phase of the EU’s emissions-trading system. The draft measure opposed by the 27-nation Parliament is meant to help bolster the price of EU emission permits after they fell to a record low in January.
“EON to fall 3 percent to 4 percent on this based on our models, but sentiment could hit it harder as Europe is now turning its back on the environment and focusing on economy,” John Musk, an analyst at RBC Capital Markets in London, wrote in a note.
EON declined as much as 5.5 percent, the most in five months, and was down 4.6 percent at 13.80 euros as of 1:20 p.m. local time. RWE lost as much as 4.9 percent, also the steepest daily drop since November, and was last 2.5 percent lower at 29.39 euros.
Trading volumes were 23 percent more than the three-month average for EON and 62 percent for RWE.
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