ADR Report: Shares Decline As EU Ministers Fail To Reach Agreement

International companies trading in New York closed lower Monday in line with the broader markets following signs that European financial ministers had failed to agree on new ways to bolster the continent's bailout efforts.

The Bank of New York Index of ADRs dropped 1.3% to 114.50, hampered by Europe's financial sector.

Britain's government threw its weight behind sweeping new changes for the banking sector that will involve requiring banks to segregate, or "ring-fence," their retail activities from riskier investment-banking activities to better protect depositors. Chancellor of the Exchequer George Osborne also told lawmakers that the government would push for Royal Bank of Scotland PLC (RBS, RBS.LN), 83% state-owned, to be completely restructured as a retail bank for its corporate and individual clients. RBS shares fell 5.3% to $5.95 and rival Lloyds Banking Group PLC's (LYG, LLOY.LN) slumped 8% to $1.38.

Credit Suisse Group AG's (CS, CSGN.VX) chief executive and chairman told staff in a holiday memo Monday that the coming year will be challenging, but expressed confidence in the Swiss bank's strategy, which they said should allow it to come out ahead of competitors. Shares slipped 1.6% to $22.40, while rival UBS AG (UBS, UBSN.VX) closed 0.6% lower at $11.38.

The European index fell 0.8% to 107.03.

French technology and media-services group Technicolor (TCLRY, TCH.FR) issued a profit warning and said it would reduce its headcount, citing the challenging European environment. Shares tumbled 4.3% to $1.34.

Dutch farm-machinery manufacturer CNH Global NV's (CNH, NHL.FF) shares dropped 0.9% to $35.01 after the company made an offer to buy Norwegian farm-implement maker Kverneland ASA (KVEGF, KVE.OS), topping an earlier bid for the company by Japan's Kubota Corp. (KUB, 6326.TO).

The Asian index closed 2.3% lower at 108.84 as news of North Korean leader Kim Jong Il's death heightened fears of instability on the Korean Peninsula and sent the Seoul share market and won skidding to multi-week lows.

South Korean bank Shinhan Financial Group Inc. (SHG, 055550.SE) slid 6.4% to $62.92 and peer KB Financial Group Inc. (KB, 105560.SE) lost 4.5% to $29.64. Flat-panel maker LG Display Co. (LPL, 034220.SE) fell 7.3% to $9.42.

Japan's Olympus Corp. (OCPNY, 7733.TO) is preparing to issue around Y100 billion ($1.28 billion) in new shares following the sharp downward revision of group net assets to reflect its true financial situation, The Nikkei reported in its Tuesday morning edition. The medical- and optical-equipment manufacturer is believed to be considering the issuance of nonvoting-preferred shares convertible into common stock down the road. Shares tumbled 21% to $10.26.

The emerging-markets index dropped 2.3% to 262.68.

Yanzhou Coal Mining Co. (YZC, K3GD.SG, 600188.SH, 1171.HK) plans to acquire Gloucester Coal Ltd. (GCL.AU) for at least $2 billion, Bloomberg News reported Monday, citing a person with knowledge of the matter. The person declined to give an exact price for the cash-and-stock bid for Gloucester, which has a market value of A$1.43 billion ($1.42 billion). The bid will be made by Yancoal Australia Ltd., Yanzhou Coal's Brisbane-based unit, the person said. Yanzhou's shares closed 3.9% lower at $20.03.

Chinese state-owned oil-and-gas company CNOOC Ltd. (CEO, 0883.HK) said production on two platforms at the Zhuhai Hengqin gas-processing terminal has stopped after a leak was discovered in an underwater connecting pipeline. Shares slid 3.3% to $172.23.

The Latin American index slipped 2% to 317.02.

Argentina's banks tumbled in line with their European counterparts.

Grupo Financiero Galicia SA (GGAL, GGAL.BA) shed 5.1% to $5.93, BBVA Banco Frances SA (BFR, FRAN.BA) fell 3.6% to $4.81, and Banco Macro SA (BMA, BMA.BA) dropped 2.9% to $19.37.

Copper prices and gold futures ended lower, failing to hold on to the $1,600 level thanks to pressure from downbeat comments by the European Central Bank and as buyers remain unwilling to take new positions ahead of the holidays. That hurt shares of Brazilian miner Vale SA (VALE, VALE.BR) and Peru's Compania de Minas Buenaventura SAA (BVN, BUENAVC1.VL). Vale closed down 2.8% at $20.51, while shares of the Peruvian company slipped 1.6% to $39.26.

-By Ian Thomson, Dow Jones Newswires; 212-416-2314; ian.thomson@dowjones.com

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