Markets & Finance

Moeller Maersk Rises on Acquisition


From Standard & Poor's European MarketScope

Nordic

Shipping and oil group Moeller Maersk was up 1900 Danish kroner to 65,800 kroner after the company acquired the majority of U.S. oil group Kerr-McGee's British oil and gas interests, including the North Sea activities operated by Kerr-McGee affiliates. The deal is valued at $3 billion, according to the Financial Times on Sunday.

Mobile phone giant Nokia was up €0.14 to €13.06 after the company said that a news report on Sunday about U.S. group Cisco Systems showing interest in a takeover is pure fabrication based on Internet rumors. Separately, Merrill Lynch reinstated coverage of the company with a buy rating and a target at €16.2, indicating an upside of 25% from the current share price.

France

Luxury-goods group Hermes was down €3.20 to €162.80 on disappointing second-quarter sales. The bank Exane BNP-Paribas said second-quarter sales were below expectations, especially in Japan and in leather. The group's like-for-like sales in the period were up 7.4%, below the broker's 9.7% growth estimate and the consensus of 8% to 9%. The broker said that the figures raise questions about the product mix and visibility and reiterated its neutral rating. Meanwhile, the brokerage Cheuvreux downgraded the group to underperform from outperform and cut its target to €177 from €187.

Chemical maker Rhodia was up €0.16 to €1.76 after the company signed a binding agreement for the sale of its European cartridge silicone sealants business to German consumer products group Henkel. The company said that, with 158 employees based in Germany and the UK, the business generated sales of more than €50 million in 2004. No financial details are provided. Separately, note that Rhodia's stock lost 4.2% on Friday after it reported a second-quarter net loss of €197 million, compared to a profit of €55 million, worse than expected. But today, the bank Ixis raised its target to €1.60 from €1.50, saying that the group's results were stained by a lack of hope on fine chemicals. The broker considers the stock to be high risk and kept its reduce recommendation.

Air France-KLM was up €0.48 to €13.68 as it reported its load factor up 3.2 percentage points in July to 85.2%, a record level for the group. July traffic increased by 9.2% on 5.1% higher capacity. However, cargo operations continued to suffer from weakness of European exports.

Oil group Total was up €2.70 to €208.70 after Credit Suisse First Boston noted that the sector is still committed to returning excess cash to shareholders. The broker said that it thinks that the macro outlook remains strong, particularly with oil prices above $60, refining margins still above third-quarter of 2005 forecasts and the sector trading on only 10 times 2005 earnings. It rates the sector overweight.

Germany

Airline Lufthansa was up €0.22 to €10.70 as its July passenger count went up 2.2% to 4.76 million. The group's July traffic rose 6.8%, and its passenger load factor went up 3.4 percentage points to 77.9%. Cargo slipped by 0.2%. In addition, the company's low-cost group Germanwings plans to expand its base in Germany, according to reports. Meanwhile, the company's second-quarter results are due out on Wednesday. Operating profit is seen unchanged from a year earlier.

Broadcaster ProsiebenSat1 was down €0.35 to €14.50 after the Financial Times reported that Germany's competition watchdog has dashed hopes of a speedy approval for Axel Springer's agreed €4.20 billion bid. The report said that the chairman of the Federal Cartel Office said he did not believe the deal would get clearance after an initial four-week review and would warrant an extended three-month investigation.

Chemical group Degussa was down €1.20 to €35.30 after the company saw second-quarter earnings before interest and taxes come in at a lower-than-expected €256 million on sales slightly higher than its forecast of €2.97 billion. It reiterated that it expects annual earnings to rise slightly. The outlook excludes the food ingredient business.

Schwarz Pharma was up €3.50 to €43.40 after the drugmaker said that it may lift drug sales estimates of its lacosamide treatment against diabetic neuropathic pain. Currently the company estimates peak annual sales of €400 million for lacosamide in this use.

Britain

Telecom equipment maker Marconi was up £0.39 to £3.06 after confirming that it has held discussions with third parties about potential business combinations, but talks are at a preliminary stage and there can be no assurance that an offer will ultimately take place. This follows press reports that it had begun talks that could lead to a takeover by its Chinese partner Huawei Technologies. The Sunday Times noted that if the deal comes to fruition, it will be one of the most significant to date of a foreign company by a Chinese group, and could value the company at more than £600 million.

Standard Chartered was up £0.87 to £12.12 after the bank's interim results beat forecasts. The bank reported first-half pre-tax profit of $1.33 billion, total income of $3.23 billion, which was up 19%, and total assets of $203.9 billion, up 54%. Its loan impairment charge of $166 million was up 19%, and normalized earnings per share were $0.75, up 32%. The bank also raised its interim dividend by 11% to $0.1894.

Barclays bank was up £0.06 to £5.82 after Deutsche Bank upgraded the company to buy from hold. The broker raised its target price to £6.40 from £6.0. ABN Amro raised its target to £6.0 from £5.40, and kept its hold rating. Lehman Brothers raised its target to £6.23 from £6.03, and kept its overweight rating . Societe Generale raised its twelve-month fair value target to £5.80 from £5.40 in line with a 6% increase in earnings per share estimates. The brokerage Cheuvreux increased its target to £5.80 from £5.50, and kept its underperform rating.

Consumer staples group Unilever was down £0.07 to £5.67 even after Cheuvreux increased its target to €66 from €63, and kept its outperform rating.

British Sky Broadcasting was down £0.08 to £5.55 even after Standard & Poor's raised its long-term corporate credit rating on the company to BBB from BBB-, following the group's strong results in fiscal-year 2005 and the financial restraint shown on shareholder returns. Standard and Poor's said that the outlook is positive.

Switzerland

The bank UBS was up 1.00 Swiss francs to 105.90 francs, ahead of its second-quarter earnings report tomorrow. According to private-banking unit head Marcel Rohner, as quoted in the newspaper SonntagsZeitung, the bank is not planning any acquisitions at present and plans to continue with the hiring of staff past the end of the year.

Julius Baer was up 1.20 Swiss francs to 83.70 francs, ahead of its first-half earnings report Aug. 12. Bank Sarasin believes the market may concentrate on the company's gross margins and net new money generation, especially in private banking. It confirmed its neutral rating and 88 Swiss franc price target.


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