Markets & Finance

Gaz de France Rises in Debut


From Standard & Poor's European MarketScope

Britain

Shell Transport was up £0.09 to £5.66 after the Financial Times said that the asset swap deal with Russian gas monopoly Gazprom will see them become partners in two big Russian gas projects. Separately, the benchmark oil price is hovering above $61.00 per barrel amid concerns Hurricane Dennis will delay oil shipments from the Gulf of Mexico, where Shell and other producers are evacuating workers.

Builder Balfour Beatty was up £0.06 to £3.56 as the investment bank Dresdner Kleinwort Wasserstein said that Thursday's trading action was a classic example ofhow the sector underperforms in times of uncertainty and then responds by outperforming when this uncertainty is removed. The broker noted that when the news was first announced that the London blast was attributable to a power surge, the company, which is responsible for part of the subway line, fell dramatically.

Drugmaker Astrazeneca was up £0.26 to £23.76 as Morgan Stanley noted that the deterioration in the fundamentals of the pharmaceutical sector has abated and the group has been strong since April, with 12% relative outperformance. The broker thinks that the company, which it has rated overweight, looks attractive going into the quarter. The bank Carnegie reiterated its outperform rating after the company yesterday reported phase II studies of cancer drug Zactima, which will take the drug into phase III.

Engine maker Rolls-Royce was up £0.08 to £3.00, as Deutsche Bank noted that although civil stocks could underperform, one month after the Madrid bombings they had outperformed market by up to 5%. The bank said that civil aerospace exposed stocks that may be impacted are EADS and Rolls Royce.

Consumer staples group Unilever was up £0.10 to £5.45 after the Financial Times reported that the company is shifting some 100 European managers to Switzerland as part of ongoing efforts to simplify its operational structure as it tries to revive sales in the region. The report said that the move, which will create a new subsidiary named Unilever Supply Chain Company. is part of a review of the company's supply network.

Barclays was up £0.06 to £5.55 after a South African court gave the company the green light to complete its £2.75 billion purchase of a majority stake in the bank Absa, the Financial Times reported. The approval of Barclays; bid to take over South Africa's most used retail bank had been delayed for two days by groups seeking reparations from the British bank and other companies for allegedly supporting the former apartheid government.

France

Gaz de France, the natural gas distributor, was up €4.39 to €27.59 on their first day of trading in Paris, after having been suspended limit up at the start of trading. The French state sold shares in the utility to institutional investors at €23.40, at the upper end of the €20.70 to €24.00 range announced on June 23. Retail investors were able to buy the shares at €23.20.

Oil engineering and services firm Technip was up €1.50 to €41.26 after the company won two contracts worth €567 million with oil company Statoil for subsea services in the Norwegian part of the North Sea.

STMicroelectronics was up €0.33 to €13.46 after Goldman Sachs upgraded the company to outperform from in-line, saying that the mild downturn looks to be shifting to a mild upturn. The broker said that the recovery likely will be demand-led and therefore milder than previous supply-driven upcycles.

Champagne maker Taittinger was up €7.00 to €366.00 after the newspaper Les Echos reported that private equity groups Carlyle and Cinven are among seven groups studying possible bids for the company. Note that earlier this month Claude Taittinger said that, despite several approaches, the Taittinger family would not sell at just any price.

Germany

Chipmaker Infineon was up €0.21 to €7.74 after Goldman Sachs argued that the mild downturn in the sector looks to be shifting to a mild upturn.

Deutsche Boerse was up €1.27 to €68.18 after the bank WestLB upgraded the exchange to outperform from neutral, increasing its price target 17% to €76.

Insurance and asset management group Allianz was up €1.46 to €96.66 after the company said that it will buy half of its joint-venture in asset management in South Korea. Separately, the company might face exposure of below €10 million related to the London bombings because of its participation in an anti-terrorist coverage pool in London, according to analysts. Meanwhile, the bank Kepler said that since January, the maximum industry retention in case of a terrorist attack is set at £ 75 million per event or £150 million per year.

Conglomerate Siemens was up €0.78 to €61.06 as the company aims to double its revenues from services to oil and gas firms to €2.4 billion in 2005, according to the head of the company's power generation unit.

Italy

Carmaker Fiat was up €0.07 to €5.89 after the newspaper Il Corriere della Sera reported that the company will meet with unions at the end of the month to

discuss changes to the industrial plan.

Jewellery firm Bulgari was up €0.14 to €9.24 after the bank Kepler said that the overall impact of the shift to international accounting standards on 2004 accounts is negligible. Restated 2004 sales increase 3.9% to €831.6 million, while net profit rose 0.4% to €108.7 million.

Banca Intesa was up €0.04 to €3.84 after the company expressed an interest in a majority stake in Romanian bank, Banca Comerciala Romana, according to head of the government's privatisation agency. The Romanian government intends to auction off 50% plus one share in BCR by the end of the year.

Netherlands

Royal Dutch was up €0.80 to €55.70 after the Financial Times said that the asset swap deal with Russian gas monopoly Gazprom will see them become partners in two big Russian gas projects. Separately, the benchmark oil price is hovering above $61.00 per barrel amid concerns hurricane Dennis will delay oil shipments from the Gulf of Mexico, where Shell and other producers are evacuating workers.

Royal Philips Electronics was up €0.46 to €21.54 after Goldman Sachs said that it continues to prefer semiconductor stocks over the semi equipment and passive component names. The broker would look to buy Philips over the course of the third quarter. Separately, LG.Philips LCD, in which the company holds around a 44.6% stake, announced last night that it has filed for a follow-on offering of around 26,850,000 primary shares of common stock in the form of American Depository Shares. Separately, the company's subsidiary Philips India is teaming up with several organisations to provide affordable healthcare to the less privileged in India.

Nordics

Oil group Statoil was up 6.00 Norwegian kroner to 146.50 kroner, after the company said that it sees 50 billion cubic meters of gas output annually in Barents Sea by 2020. The company's senior vice president Henrik Carlsen said that his assessment of Barents Sea gas output potential included both the Norwegian and the Russian sectors. (Note, Norway's total gas production is expected to be around 80 billion cubic meters this year). Separately, the benchmark oil price was hovering around $61 per barrel amid concerns hurricane Dennis will delay oil shipments from the Gulf of Mexico.

Mobile phone maker Nokia was up €0.32 to €14.16 as the company said that it will increase its share of production in Asia, probably at the expense of European production. Note, the company has around 40% of its production in Europe.

Mobile networks company Ericsson was up 0.30 Swedish kronor to 25.70 kronor, as Credit Suisse First Boston noted that that China Mobile has released its plans for 3G construction. The broker noted that no time frames were provided and it awaits official word on the 3G license distribution by the Chinese government, but argued that newsflow on this front should pick up. The broker expects investors to continue to favor the company, given its strong positioning in China.

Telecom Teliasonera was up 1.30 Swedish kronor to 37.70 kronor, as the daily Svenska Dagbladet reported that the company can earn 800 to 900 million Norwegian kroner annually on an acquisition of mobile phone group Chess and, in doing so, recover what it paid for Chess in 2.5 years, according to Chess CEO Idar Vollvik.

Aluminium and oil group Norsk Hydro was up 26.50 Norwegian kroner to 646.00 kroner, after American aluminium producer Alcoa kicked off the U.S. reporting season with the best quarterly profits in its history. The company's second-quarter profits rose by 13%, beating Wall Street expectations, due partly to strong demand in aerospace, commercial vehicle and construction markets.


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