Markets & Finance

Siemens Rises on Asian Partnership


From Standard & Poor's European MarketScope

Germany

The conglomerate Siemens was up €0.90 to €61.37, after the Financial Times Deutschland reported over the weekend that the company has agreed a partnership with Taiwan's BenQ Corp for its mobile phone business. The newspaper Frankfurter Allgemeine Sonntagszeitung also said the company would present plans Tuesday. The company is convening an emergency general meeting to present details of the joint venture to the board. The private bank Sal. Oppenheim upgraded the company to buy from neutral on the back of this news.

Chipmaker Infineon was down €0.23 to €7.29, as the company might lose the contract to supply Siemens with mobile-phone chips, following news that a partnership with Taiwan's BenQ has been agreed. Siemens currently accounts for 30% of the company's mobile-phone chip sales and the loss would have asignificant impact The company's stocks are also weighed down on news the chip industry is losing steam in April: VLSI Research reported that semiconductor producers' book-to-bill-ratio slowed to 0.82 in April.

The bank Hypovereinsbank was up €0.11 to €19.90, after Focus magazine reported that while the company's ceo Dieter Rampl is enthusiastic about the link-up with Unicredito, Albrecht Schmidt, the head of the supervisory board, is against it. This is contrary to news reported by the German newspaper Die Welt last week, which said that the supervisory board would be backing Rampl. Meanwhile, Italy's Il Sole reported over the weekend that Unicredito's board would likely meet on June 9 or 10 to discuss final details of the bid for HVB. Credit Suisse First Boston thinks a tie-up makes sense, but is rather sceptical on synergies, and reiterated its neutral rating.

Volkswagen was down €0.08 to €36.23, after the bank ING upgraded the company to buy from sell. According to the newspaper Welt am Sonntag, the carmaker is planning additional job cuts, following disappointing showing in China and North America recently. Speaking on the fringes of an event in Hamburg Sunday, CEO Bernd Pischetsrieder said the new cuts will run concurrently with its existing ForMotion cost cutting program.

France

France Telecom was down €0.87 to €22.50, after the French government sold part of its 41% stake in the company, keeping between 33% and 35% of the stake, under the minority blocking, reported the newspaper Les Echos. The stock is expected to be sold at a range between €22.50 to €22.85 per share. The operation is a 6% accelerated bookbuild worth €3.48 billion, with an option to increase it to 8%. The French Finance Minister Thierry Breton, announced the offer this weekend, before the lock-up expires tomorrow.

Aerospace and defense giant EADS, parent of Airbus was €0.22 to €23.73,after the Romanian anti-corruption court PNA launched an investigation into an alleged 'substantial payment' by the company to an intermediate in relation to a €1 billion border security contract last year. Separately, Emirates Airlines is seeking damages following a six-month delay in delivering an order of 45 A380 planes. Qantas Airways is also seeking compensation ondelays. Meanwhile, the British regional carrier Flybe has placed a 14-unit order of more than $950 million with Brazil's Embraer, rather than with Airbus.

STMicroelectronics was down €0.18 to €12.62 after VLSI Research reported that semiconductor producers' book-to-bill-ratio slowed to 0.82 in April, VLSI Research reports. Bookings are down 11% from the previous month and 35% lower year on year, while global billings came in 23% below March's levels and flat year over year. The industry research group says that, following a seasonally-strong March, the equipment industry has lost steam. However, it added that April sales typically fall below those of March and overall, electronics end-demand is strong and chips inventories have fallen to extremely low levels.

Luxury goods maker Hermes was up €1.20 to €164.20 after the company confirmed its fiscal-year 2005 sales target despite moderate growth in the first quarter, focusing on organic development. Management remains undecided over Leica issue.

Britain

Mining group Antofagasta Holding was up £0.24 to £12.26 after copper prices touched two-month highs in London earlier this morning.

Engine maker Rolls-Royce was up £0.05 to £2.86 after ABN Amro raised its price target to £3.50 from £2.75 and reiterated its buy rating, saying the stock has been undervalued by the market. The bank added that the fleet of engines in service could continue to grow for a further 20 or 30 years.

Sugar and sweetener maker Tate & Lyle was up £0.05 to £4.75 after Goldman Sachs raised its earnings per share estimates for fiscal year 2006 to 37.6 pence from 36.2 pence and for 2007 to 39.4 pence from 38.0 pence, although the bank pointed out that these remain under review and are based on British Generally Accepted Accounting Principles.

Drugmaker Glaxosmithkline was up £0.10 to £13.73 after a study in the June edition of the journal Pediatrics reported Harvard University research showing that a one-time shot of the company's Boostrix vaccine during adolescence may prevent a third of potential whooping-cough cases. Boostrix won Food and Drug Assocation clearance last month and became the first vaccine available in the U.S. protecting against whooping cough.


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