Markets & Finance

Nokia Falls As New CEO is Named


From Standard & Poor's European MarketScope

Nordic

Nokia was down €0.16 to €13.01 after the company's board of directors announced it appointed executive Olli-Pekka Kallasvuo as president and chief executive officer from June 1, 2006, when he will replace longtime CEO Jorma Ollila. Separately, Lehman Brothers reiterated its equal weight rating and kept its target price at €12.90. The broker cut its earnings per share forecasts by 10% in 2005 and 8% in 2006.

Netherlands

Supermarket group Ahold was up €0.08 to €7.34 after the company reached an agreement with Julius Meinl to acquire up to 67 supermarkets in the Czech Republic. The deal increases the number of the group's Czech stores to about 300 and to about 520 in central Europe. Completion of the transaction is subject to antitrust approval and is expected in the second half of 2005. Separately, Citigroup increased its target price to €8.40 from €7.25, and kept its buy recommendation.

ABN Amro was down €0.23 to €20.39 after the company reported first half net operating profit of €1.646 billion, up 16.5% and net profit of €1.88 billion, up 9.8%. Although these figures are ahead of brokers' forecasts, after one-offs the numbers come in broadly in line with estimates. Furthermore, the company forecasts second half results will be lower than the first half. Separately, Banca Populare Italiana's shares fell by nearly 3% amid doubts about its attempt to take over Banca Antonveneta after the Bank of Italy suspended its bids on Saturday.

Britain

Royal Dutch Shell was up £0.30 to £18.36 after Citigroup raised its target on the company to $28.45 from $28.26 and kept a hold rating. The broker lowered its 2005 and 2006 earnings per share forecasts by 5% and 4% respectively, due in part to higher costs and capital expenditures.

Insurer Royal & Sun Alliance was down £0.03 to £0.88 after the Sunday Telegraph reported that General Motors is seeking well over $1 billion in damages in its legal action over asbestos-related claims against the company. The scale will unnerve investors who have been concerned about the potential drain on the company of its troubled U.S. business. GM alleged that the company has failed to pay it for meeting and defending alleged personal injury claims linked to asbestos

HSBC was up £0.07 to £9.31 after the bank reported total operating income up 9% to $29.9 billion, beating forecasts, with first half attributable profit up 9% to $7.6 billion. First half pre-tax profit rose $10.64 billion, up from $10.12 in the period last year. The company announced a second interim dividend of $0.14 per share, taking the total to $0.28.

France

Defense electronics group Thales was up €1.14 to €34.64 after the Observer newspaper wrote that Britain could be preparing a secret review of its defense industry. The report said contractors including the company, BAE Systems, VT Group and Rolls Royce have all been contacted. The paper noted that Thales won a £700 million contract in British defense on July 20.

Technip was up €1.08 to €45.20 after brokers raises their target prices for the oil services group. Fortis Bank increased its target to €48 from €43 and kept its hold rating, saying that the high order intake was the strong point of the second quarter. It noted that the upgrade was prompted by a statement by CEO D. Valot that fiscal 2006 sales could reach €6 billion. In addition, UBS raised its target to €50 from €45 and kept a buy rating.

Media group Vivendi Universal was up €0.17 to €26.42 after the bank ING increased its target price to €30 from €27 and maintained its buy rating. The broker noted that the company has reported quality second-quarter revenues, up 7% like-for-like, above its 5.7% estimates. The bank also said that some investors could be tempted to take profits on the company, now that many of the catalysts have been crystallised.

Advertising group Publicis was down €0.29 to €27.76 on news that David Jones will head Euro RSCG Worldwide following the resignation of Jim Heeking. Jones was formerly the head of the company's Euro RSCG unit in New York. Last week brokers were generally pleased with fiscal year perspectives outlined by the company. Citigroup raised its target to €30 from €28 and kept a buy rating, after upgrading its fiscal 2005 to 2007 forecasts by 3% to 7%.

Germany

Insurance and asset management group Allianz was up €1.18 to €106.00 after CFO Helmut Perlet said that second-quarter earnings are "well in plan" for all divisions, CFO Helmut Perlet said in the newspaper Sueddeutsche Zeitung. Meanwhile, CEO Michael Diekman told the newspaper Der Spiegel that the company, which owns Dresdner Bank, has ruled out a merger with Deutsche Bank.

Volkswagen was down €0.73 to €44.03 on mixed broker action. Deutsche Bank reportedly upgraded the company to hold from sell, with a target of €45. The bank Dresdner Kleinwort Wasserstein downgraded the group to hold from buy, with a €46 target. ING also downgraded the group to hold from buy, lifting the target to €45 from €42. The brokerage Cheuvreux added the company to its selected list and lifted the target to €55 from €44.

Deutsche Boerse was up €2.22 to €74.66 after the Sunday Telegraph newspaper reported that the continued independence of the London Stock Exchange looks the most likely outcome of the eight-month bid battle, according to executives close to both it and Euronext, its Paris-based rival. The LSE is understood to be demanding that Euronext or Deutsche Boerse, the other potential bidder, make an offer of more than £6.00 a share, or £1.52 billion, before it will be prepared to discuss a takeover. On the broker front, Morgan Stanley lifted Deutsche Boerse's target to €75 from €65 with an overweight rating.

Clothing group Hugo Boss was down €0.81 to €27.02 after Deutsche Bank downgraded the company to hold from buy, lifting the target to €29.40 from€29.10.

DaimlerChrysler was up €0.31 to €40.43 after the Financial Times newspaper reported that the appointment of Dieter Zetsche as president of the company could clear the way for a shift in the group's attitude towards its investment in Mitsubishi Motors, industry professionals and analysts believe. Juergen Schrempp, who will step down as president at the end of the year, was the architect of the company's acquisition of a controlling stake in Mitsubishi in 2000 and strongly defended the deal against doubters such as Zetsche when it turned sour, according to the report. On the broker front, Citigroup downgraded the company to sell from hold, lifting the target to €37 from €32.

Italy

Banca Populare Italiana was down €0.30 to €8.02 as the company this week faces further probes by the Bank of Italy and magistrates into the circumstances surrounding its proposed €7.8 billion bid for rival Banca Antonveneta amid deepening controversy over Italy's response to foreign bank takeover bids, the Financial Times wrote. The paper reported that the Bank of Italy, which on Saturday suspended its approval of the company's bid, ordered executives to clarify accounts and transactions in a meeting scheduled for Wednesday. Separately, the bank ABN Amro confirmed that it is still committed to gain control of Antonveneta, although it said that it will not raise its bid. Banca Antonveneta, meanwhile, was up €0.01 to €25.21.


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