Bloomberg News

European Stocks Fall on China Exports Data; Temenos Slips

March 12, 2012

Banca Monte dei Paschi di Siena SpA sank 5.5 percent after its biggest investor reached an agreement with banks that hold part of its stake as collateral on a loan. Photographer: Alessia Pierdomenico/Bloomberg

Banca Monte dei Paschi di Siena SpA sank 5.5 percent after its biggest investor reached an agreement with banks that hold part of its stake as collateral on a loan. Photographer: Alessia Pierdomenico/Bloomberg

European (SXXP) stocks retreated, halting a three-day rally for the Stoxx Europe 600 Index, as a report showed export in China, the world’s second-largest economy, grew at a slower pace than forecast.

Mining companies fell with metal prices. Temenos Group AG (TEMN) dropped 4.9 percent after the company terminated merger talks with Misys Plc. (MSY) Banca Monte dei Paschi di Siena SpA (BMPS) sank 5 percent after its biggest investor reached an agreement with banks that hold part of its stake as collateral on a loan.

The Stoxx 600 fell 0.2 percent to 264.87 at the close. The benchmark measure has still rallied 8.3 percent so far this year as the European (SXXP) Central Bank disbursed 1 trillion euros ($1.3 trillion) of loans to the euro area’s banks and U.S. economic reports beat estimates. The gauge rallied at the end of last week, trimming its weekly drop to 0.7 percent, as a release showed that the U.S. economy added more jobs than predicted and Greece’s private creditors agreed to a debt swap.

“China really is the only potential negative out there,” said Steve Goldman, managing director at Kapstream Capital in Sydney which manages about $3.2 billion in assets on Bloomberg Television. “We’ve seen a good start to the year and there is a lot less risk to the global economy than there was three, four, five months ago.”

China reported its biggest trade deficit last month since at least 1989, adding to last week’s releases on factory output and retail sales that signaled slowing growth.

Finance Ministers’ Meeting

Finance ministers from the 17 nations that use the euro gathered in Brussels today to approve the 130 billion-euro second bailout package for Greece. Bondholders last week agreed to exchange the country’s privately held debt for new securities.

National benchmark indexes declined in 11 of the 18 western-European markets. Germany’s DAX Index added 0.3 percent. The U.K.’s FTSE 100 Index and France’s CAC 40 Index increased 0.1 percent. Gauges in Italy, Spain, Portugal, Ireland and Greece fell.

Vedanta Resources Plc (VED) dropped 3.7 percent to 1,369 pence as copper snapped a three-day rally on the London Metal Exchange following signals that China’s economy has slowed. France’s Eramet (ERA) SA lost 4.1 percent to 107.30 euros, while Rio Tinto Group fell 1.7 percent to 3,450.5 pence.

Temenos, Misys Fall

Temenos dropped 4.9 percent to 15.40 Swiss francs and Misys lost 3.8 percent to 328 pence after the Geneva-based software maker terminated merger talks after failing to reach an agreement on a deal.

Temenos won more time from the U.K. Takeover Panel last week to respond to competing bids for Misys after ValueAct Capital, Misys’s largest shareholder, joined forces with buyout firm CVC Capital Partners Ltd. to work on an offer. Vista Equity Partners is considering a separate bid.

Monte Paschi sank 5 percent to 38.1 euro cents after Fondazione Monte dei Paschi di Siena reached an agreement with the banks that hold part of its stake.

Il Sole 24 Ore reported that the foundation has held talks to sell about 7 percent of Monte Paschi to families and entrepreneurs close to the bank. The newspaper didn’t say how it obtained the information. The foundation planned to sell a further 8 percent to private-equity firms, Il Sole 24 Ore said.

Davide Campari-Milano SpA (CPR) plunged 5.8 percent to 5.35 euros after the maker of Wild Turkey bourbon reported full-year net income of 159.2 million euros, missing the average analyst estimate of 172.3 million, according to data compiled by Bloomberg. The company said it was “cautiously optimistic” for 2012.

Accor, Banco Sabadell

Accor SA (AC) climbed 2.2 percent to 26.89 euros. Credit Suisse Group AG raised its recommendation for Europe’s biggest hotel company to outperform from neutral.

Banco Sabadell SA surged 7.4 percent to 2.31 euros in Madrid, its biggest advance since November and the largest gain on the Stoxx 600 (SXXP) today. Spanish brokerage, N+1 Equities upgraded the lender to a “strong” buy, saying its acquisition of Banco CAM was a “game-changing move.” Analyst Francisco Riquel said Sabadell was now the “best positioned bank in Spain.”

According to Data Explorers figures on Bloomberg, 7.1 percent of Sabadell’s shares were out on loan on March 7. It would take 21 days of average volume to buy back those shares, Bloomberg estimates show. Short selling is when traders borrow shares and sell them with the intention of repurchasing the securities at a lower price, enabling them to pocket the difference.

Cobham Plc (COB) gained 4.8 percent to 220.6 pence after the world’s largest maker of airborne-refueling equipment ended its pursuit of Thrane & Thrane A/S after the company rebuffed a 273 million-pound ($427 million) proposal.

Pirelli & C. SpA, Europe’s third-largest tiremaker, surged 7.2 percent to 8.39 euros, its highest price since December 2007. The company posted 2011 profit of 451.6 million euros, exceeding the 314.3 million-euro analyst estimate, and increased its dividend to 27 euro cents.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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


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