Markets & Finance

Allianz Rises on Strong Results


From Standard & Poor's European MarketScope

Germany

Insurance and asset management group Allianz was up €3.02 to €109.42 as its second-quarter net profit jumps 65% to €1.39 billion, significantly exceeding market expectations. The result includes lower capital gains, falling impairments on investments and a lower tax rate. The group pointed out that the life insurance business and asset management continue to show double-digit growth rates for revenues, benefiting from the strong demand for products related to retirement provision and wealth accumulation. On the broker front, JP Morgan lifted its target to €116 from €112 and stuck to its overweight rating. The brokerage Cheuvreux lifted its fair value to €125 from €110.

Commerzbank was up €1.37 to €21.40, on speculation that French bank BNP-Paribas is interested in the bank, after Spain's Santander said it is not keen to acquire the group. The French bank is considering offering €30 per share, according to rumors in the German market.

Drug and chemical maker Bayer was down €0.69 to €29.75 as the company lifted its forecasts as its second-quarter earnings before interest and taxes climbed 39% to €852 million, but below expectations. Quarterly sales came in a touch higher than expected at €7.05 billion. The company expects underlying earnings before interest and taxes to rise some 40% this year against a 20% increase predicted earlier.

Airline Lufthansa was up €0.35 to €11.09 after lifting its full-year operating profit guidance to more than €400 million as it reports first half operating profit of €253 million, revenues of €8.50 billion and net profit of €0.20 million.

France

Utility group Suez was up €1.48 to €25.02 a day after the company launched a €11.2 billion offer for the the remaining 49.9% stake of the Belgian electricity provider Electrabel that it does not already own. Credit Suisse First Boston upgraded the group to outperform from neutral and lifted its target price to €26.50 from €22.70. The bank UBS raised its target to €27 from €25 and kept its buy rating, as the broker expects synergies and earnings accretion. The brokerage Cheuvreux lifted its target to €26 from €23.5. ABN Amro raised its target to €27.6 from €26.5 and kept its buy rating. Societe Generale lifted its fair value target to €26 from €25 and kept its buy rating. Dresdner Kleinwort Wasserstein upgraded the group to buy from hold and hiked its target to €26 from €20.

Chipmaker STMicroelectronics was up €0.24 to €14.18 after Morgan Stanley upgraded the group to equal weight from underweight and lifted its target to EUR16 from €12.5.

Italy

Unicredit was up €0.14 to €4.64 on reports that German funds have added the bank to their portfolio ahead of its listing on the Frankfurt bourse. Yesterday, 1.3% of the company's capital changed hands on the market, domestic sources say.

Netherlands

Dutch bank ABN Amro was up €0.21 to €20.08 after the newspaper Il Corriere della Sera wrote that banks supporting Italian bank Banca Populare Italiana's bid for its peer Banca Antonveneta have confirmed their commitment to Populare Italiana,. Separately, Deutsche Bank said that it is comfortable with its purchase of minority stakes in Antonveneta, which is at the center of a probe into possible financial transgressions. ABN Amro had submitted a bid for Banca Antonveneta that expired last month.

Switzerland

Luxury goods maker Richemont was up 1.45 Swiss francs to 48.65 francs after Merrill Lynch upgraded the company to buy from neutral with a 55 franc price target.

Britain

Old Mutual was up £0.06 to £1.37 after the insurer reported a strong first half and positive outlook. The group posted first-half adjusted operating profit of £554 million, up 29% and declared an interim dividend of 1.85 pence. The group noted a record fund inflow in the U.S. of $20 billion, and said that it expects to be able to sustain momentum in South Africa, the U.S. and Britain.

Easyjet airline was up £0.04 to £2.79 FL Group, the parent company of Icelandair has increased its stake in the company to 13.01%

Royal Dutch Shell was up £0.38 to £19.47 after saying that 98.70% of the capital of Royal Dutch had been tendered at the close of the offer acceptance period. The oil group starts its buy back program today, expected to be at the upper end of the $3 billion to $5 billion guidance for 2005, buying A shares in preference over B shares.


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