Bloomberg News

German Stocks Rise to Five-Month High; Henkel, Infineon Gain

January 19, 2012

Jan. 18 (Bloomberg) -- German stocks advanced to a five- month high as the International Monetary Fund proposed to extend its lending resources to safeguard the global economy from any worsening of the euro area’s debt crisis.

Henkel AG, the maker of industrial adhesives and Soft Scrub cleaners, and Infineon Technologies AG, Europe’s second-biggest chipmaker, led rising shares. Commerzbank AG, Germany’s second- largest lender, retreated 1.7 percent after Moody’s Investors Service cut its financial strength rating.

The DAX Index climbed 21.64, or 0.3 percent, to 6,354.57 at the close in Frankfurt, its highest since Aug. 4. The gauge tumbled 15 percent last year as euro-area leaders struggled to contain the region’s sovereign-debt crisis. The broader HDAX Index added 0.4 percent today.

“It’s difficult these days to forecast economic developments in Europe,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “Investors are focused on economic data in the U.S.”

The IMF will push China, Brazil, Russia, India, Japan and oil-exporting nations to contribute the most, according to an official from a Group of 20 nation, who spoke on condition of anonymity because the talks are private. The fund wants to strike the agreement at the Feb. 25-26 meeting of G-20 finance ministers and central bankers in Mexico City, the official said.

A gauge of confidence among U.S. homebuilders rose in January to the highest level in more than four years as sales and buyer traffic improved. U.S. industrial production rebounded in December, reflecting gains in demand for business equipment, automobiles and construction materials.

World Bank Forecast

The World Bank cut its global growth forecast. The world economy will grow 2.5 percent in 2012, down from a June estimate of 3.6 percent, as a recession in the euro area threatens to exacerbate a slowdown in emerging markets, the Washington-based institution said.

The German government also cut its forecast for economic expansion this year, saying Europe’s biggest economy will grow 0.7 percent in 2012. That’s less than the 1 percent that it estimated in October.

Greece will agree a deal with private creditors that would give them cash and securities with a market value of about 32 cents per euro of government debt, according to Bruce Richards, the chief executive officer for Marathon Asset Management LP. Richards sits on the committee of 32 private creditors that formed in November to negotiate with Greece, the International Monetary Fund and the European Union.

Germany got bids for 7.6 billion euros ($9.8 billion) of two-year notes at an auction today, compared with a sales target of 4 billion euros, the Bundesbank said.

Henkel, Commerzbank

Henkel rose 2.4 percent to 46.31 euros as Chief Executive Officer Kasper Rorsted said in an interview with DAF TV that the company’s 2012 targets remain valid, adding that he doesn’t expect a big recession.

Infineon gained 2.9 percent to 6.97 euros as ASML Holding NV, Europe’s biggest semiconductor-equipment maker, said orders from abroad will sustain growth and make up for any slowdown in its home region amid the sovereign-debt crisis.

Commerzbank slid 1.7 percent to 1.41 euros, snapping six days of gains. Moody’s cut Commerzbank’s financial-strength rating to D+ from C-. The rating represents Moody’s opinion of a lender’s intrinsic safety and soundness and doesn’t address the probability of timely repayment of debt, according to the company’s definitions.

Kloeckner & Co SE slid 1.2 percent to 11.76 euros, ending the stock’s longest winning streak in more than six months, as the German steel trader was cut to “neutral” from “buy” at Citigroup Inc.

--Editors: Will Hadfield, Andrew Rummer

To contact the reporters on this story: Adria Cimino in Paris at acimino1@bloomberg.net; Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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