Markets & Finance

European Energy Groups Rise


From Standard & Poor's European MarketScope

Britain

Defense contractor BAE Systems was up £0.06 to £2.93 after Deutsche Bank raised its target to £3.20 from £3.00, and retained the buy rating. The broker increased its estimates across the sector and said it is one of the most U.S. dollar sensitive sectors in the European market.

Fund manager Amvescap was up £0.54 to £3.97, after the company confirmed that it has received a bid approach from CI Financial, Canada's third-largest mutual fund manager, regarding a possible purchase of the company's Canadian operations. The company added that CI has also indicated it might have an interest in attempting to acquire the entire group, though the board doubts that CI will be able to market a firm offer at a level that would be in the best interest of shareholders. Sources said that CI wants to buy Amvescap as a way of acquiring AIM Trimark, the Canadian money manager purchased by the group in 2000.

Recruitment company Michael Page was up £0.25 to £2.27, after reporting second-quarter revenues of £68.2 million, up 30% year over year. The company said that, assuming no significant change in market conditions, fiscal-year profits will be materially above current consensus market expectations.

Hedge fund firm Man Group was up £0.59 to £15.35 after Lehman Brothers raised its target to £20.70 from £20.60, and reiterated its overweight rating.

Vodafone was up £0.03 to £1.40 after the company announced that Friedrich Joussen, chief operating officer of Vodafone in Germany, has been apppointed CEO of Vodafone Germany, effective in October. He will succeed Jurgen von Kuczkowski, who will be retiring.

House builder Wimpey was up £0.06 to £4.42, after Credit Suisse First Boston cut its pre-tax profit estimates by 6.7% in 2005 to £403 million and by 6.8% in 2006 to £420 million. The broker said that the British margin decline was greater than anticipated as the market cools, and a strong U.S. performance was not able to offset British decline. The broker rated the stock neutral, with a target of £4.25.

Exploration company Cairn Energy was up £0.25 to £14.24 as Credit Suisse First Boston lifted its target to £13.40 from £13.25 and kept its neutral stance, following changes to macro assumptions.

France

Oil group Total was up €4.30 to €202.30, after Merrill Lynch raised its price target to €210 from €205 in a note about European oils. The broker said that the company offers quality and best value among oil majors. Meanwhile, Credit Suisse First Boston raised its target to €220 from €190 and rated the group outperform. UBS raised its target to €230 from €210 and maintained a buy rating. Separately, the company halted production of 65,000 barrels of oil and natural gas equivalent a day and evacuated workers in the Gulf of Mexico as tropical storm Cindy threatened the U.S. coast. The storm is sending benchmark crude oil futures near $60.00.

Food-services group Sodexho was up €1.47 to €27.62 after the company reported nine-month sales of €8.89 billion, with like-for-like sales growing 4.2%. The group said that this performance is in line with the company's 4% target growth for the year. The figures is also in line with market estimates.

Media group Lagardere was down €2.20 to €59.80 as it trades ex-dividend today. Yesterday Goldman Sachs downgraded the group to in line from outperform.

Aerospace and defense group EADS was up €0.36 to €26.51 after Deutsche Bank increased its target to €30 from €27 and retained a buy recommendation

Germany

Insurance and asset management group Allianz was up €2.49 to €97.74 as all parties refused to comment on rumors that the company may be looking to sell its investment banking division Dresdner Kleinwort Wasserstein. The banks Deutsche Bank and BNP Paribas are named as possible buyers.

Truckmaker Man was up €0.82 to €35.51 after the newspaper Handelsblatt reported that the company ended talks to buy DaimlerChrysler's engine maker unit MTU Friedrichshafen yesterday because parts of the Zeppelin and Maybach founding families were against the deal.

Deutsche Boerse was up €0.42 to €66.62 after the company said that it will sell its information technology services business unit Entory to BMW's Softlab for an undisclosed amount. Entory had become a loss maker over recent years.

Industrial gases group Linde was up €0.59 to €56.04 after Citigroup increased its target to €60 from €52, with a hold rating. The broker said that the outlook for the industrial gas shares is encouraging, as a boom in steel and petrochemical capacity in Asia and clean air legislation have created substantial demand for supply contracts.

Italy

Banca Intesa was up €0.06 to €3.87 as shares rose strongly ahead of the presentation of the company's three-year plan on July 12.

Oil group Eni was up €0.48 to €22.45 after Credit Suisse First Boston upgraded the oil and gas sector to overweight from market weight. The bank lifted its target to €24.5 from €22.5 and kept its outperform rating. The bank ING also upgraded the company to buy from hold and raises target price to €24.60 from € 21.50.

Ducati was down €0.03 to €1.05 after CEO Federico Minoli declined to comment on speculation that private equity group TPG is close to selling its 33% stake in the motorcycle maker to Investindustrial. Minoli declared that talks were taking place with other groups and that negotiation times would not be short, although he was hoping for an agreement by December. Minoli added that the first half was more or less in line with expectations and he predicted a return to profit in 2005.

Netherlands

Chip equipment maker ASML was up €0.15 to €13.33 after the European Parliament threw out a draft law to harmonise patents for software innovations across the European Union. Large technology groups have been pushing for such a law, which would protect them against makers of copycat software for three years, thus enabling them to compete on equal terms with U.S. peers.

Nordics

Oil and aluminium company Norsk Hydro was up 25.50 Norwegian kroner to 638.00 kroner after Credit Suisse First Boston lifted its target to 690 kroner from 600 kroner and kept its outperform recommendation. The broker also raised the U.S. and European sector weightings to overweight from market weight. Separately, Merrill Lynch raised its target to 660 Norwegian kroner from 640 kroner and kept its buy recommendation.

Mobile networks company Ericsson was up 0.30 Swedish kronor to 25.90 kronor after the European Parliament threw out a draft law to harmonise patents for software innovations across the European Union. Large technology groups have been pushing for such a law, which would protect them against makers of copycat software for three years, thus enabling them to compete on equal terms with U.S. peers.

Oil company Statoil was up 3 Norwegian kroner to 143.50 kroner after Credit Suisse First Boston lifted its target to 143 kroner from 117 kroner and reiterated its neutral stance. The broker also raised the U.S. and European sector weightings to overweight from market weight. Separately, Merrill Lynch lifted its target to 165 Norwegian kroner from 140 kroner and kept its buy recommendation.

Mobile-phone giant Nokia was up €0.14 to €14.10 after China Daily reported that China's CDMA market is growing slower than the company expected. The report cited Timo Ihamuotila, senior vice president of Nokia's CDMA business unit, saying that Nokia aims to be one of the top three vendors in China's CDMA mobile phone market in the near future. Currently, Motorola, Samsung and LG are the top three CDMA handset vendors in China.

Spain

Energy company Repsol was up €0.45 to €22.41, as Merrill Lynch said that it is bullish on the oil and gas sector, noting that the sector's 14.4% year-to-date market outperformance has fully rewarded its overweight sector stance. Meanwhile, Credit Suisse First Boston increased its target on the company to €24.50 from €21.0, and kept its neutral stance. The broker also upgraded the oil and gas sector to overweight from market weight. Elsewhere, tropical storm Cindy sent crude prices higher as it threatened the U.S. coast.


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