Markets & Finance

Infineon Rises on Xbox Deal


From Standard & Poor's European MarketScope

Germany

Chipmaker Infineon was up €0.08 to €7.79, on news that the company will provide three components for Microsoft's Xbox 360 video game console. On the broker front, J.P. Morgan cut its target on the company's stock to €7.50 from €8.00, as it reiterated its "underweight" rating.

Insurance and asset-management group Allianz was up €0.77 to €104.14, as $16 billion to $16 billion is the maximum estimate put on the claims relating to Hurricane Katrina, which hit the U.S. Gulf Coast Monday. An earlier estimate put the damage at $30 billion.

Broadcaster Premiere was down €0.56 to €25.09 after the company bought the free TV and pay-TV rights to the soccer games of the UEFA Champions League. The company has the rights for the 2006/07 to the 2008/09 seasons. On the broker front, Deutsche Bank initiated coverage with a "sell" rating and a price target of EUR22.90. Given high multi-channel penetration and increasing competition from cable, the broker believes that the German pay-TV market will prove more challenging to the company than the shares are discounting.

Nordic

Clothing retailer Hennes & Maurtiz was up 5.50 Swedish kronor to 261.50 kronor, after the daily Dagens Industri reported that the company is little affected by the recent Chinese quota crisis, thanks to the early strategy of moving production to other countries. Today, European Union Commissioner Peter Mandelson urged member states to agree to unblock Chinese garments stuck at the EU borders. Separately, Hennes & Mauritz is more solid in Spain, Spanish daily Cinco Dias reported, noting that the group increased its profits in the country more than twofold over just one financial year.

Wind turbine maker Vestas Wind was up 8.25 Danish kroner to 125.75 kroner, after L.M. Glasfiber, the world's largest producer of blades to wind turbines, posted a 20% increase in first-half 2005 sales to 1.1 billion kroner. First-half pre-tax profit came in at 27 million kroner, compared to a negative 10 million last year. Separately, the company is about to close negotiations regarding an US-based wind turbine project, Wild Horse Wind Power Project, invovling 127 wind turbines with an estimated value of 2.2 billion kroner, according to daily Jyllands-Posten.

France

Steelmaker Arcelor was up €0.21 to €17.73 as Morgan Stanley reiterated its "overweight" rating, saying the company is one of its preferred steel stocks, along with Russia's Evraz. The broker said that steel markets appear to be at inflection point again and forecasted a bounce in demand and pricing ahead.

Advertising group Havas was up €0.08 to €4.46 after the Daily Telegraph newspaper reported that the company and U.K. ad agency Aegis could have held talks concerning a possible merger of media-buying operations. News of the talk comes with heightened speculation that financier Vincent Bollore could be looking to merge both groups. Bollore acquired a 22% stake in Havas this year, prompting the departure of CEO Alain de Pouzilhac.

Britain

Hotel and betting group Hilton was up £0.08 to £3.18 after Morgan Stanley increased its target to £3.35 from £3.10, and kept an "equalweight" rating.

Bookmaker William Hill was up £0.11 to £5.82 after Citigroup increased its target to £6.50 from £6.0, keeping its "buy" rating. The bank said that first-half results on Sept. 5 should not surprise given that rival Ladbrokes has just reported on current trading trends, although there is the potential for a positive surprise in relation to capital structure.

HSBC was up £0.09 to £8.97 after financial-services group ING raised its target to £9.91 from £9.62, and kept its "hold" rating on the bank.

Italy

Banca Populare Italiana was up €0.17 to €7.87 after the newspaper Finanza & Mercati reported that the bank's suspended CEO, Gianpiero Fiorani, and his lawyers are concerned that prosecutors could ask the judge to maintain the suspension unless the bank reaches an agreement with ABN Amro or another potential buyer regarding its stake in Italian peer Banca Antonveneta. Banca Populare Italiana is still waiting for a decision by regulators and the Bank of Italy over its bids for Antonveneta.

Netherlands

SBM Offshore was up €2.20 to €64.65 after posting a solid first-half results after the close yesterday. The company reported first-half profit up 46% year over year to $73.5 million. Sales came in at $607.1 million, compared to the first half of 2004's $655.4 million, which included $196.9 million for the former shipbuilding division. The company also raised its fiscal-year 2005 net profit guidance to $140 million from $125 million previously.


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