Markets & Finance

On the Move: Soc Gen, Munich Re, Philips


Plus more European stocks making headlines Monday

UK

AB FOODS was down £0.28 to £8.09... Primark margins lower than expected - Cr. Suisse - Credit Suisse says this morning's trading update highlights that EPS is in line with expectations. However, says Primark margins look a bit lower than expected due to discounting. The company says the strength of sterling will impact its overseas results by some £19 million for the financial year. The company says profit from its sugar business is strongly ahead of last year. Adds that sales and profit at Primark will be substantially ahead of last year, and that grocery profits will will be lower than last year.

HSBC (HBC) was down £0.03 to £8.71... Rebel investor slams US$6 billion Korean bid - The activist investor targeting a structural review at the company has expressed concerns about its plans for a US$6.3 billion takeover of Korea's sixth-largest lender, The Daily Telegraph reports. The paper has learned that Eric Knight, chairman of the New York-based fund manager Knight Vinke, will fly to London tonight to meet some of the company's major institutional shareholders.

SAINSBURY was down £0.02 to £5.45... Delta Two to raise cash component Delta Two is understood to have been given the green light from Qatar to increase the cash component of its £10.6 billion bid for the company as it seeks the board's backing to open the group's books later this week, The Times writes. Notes sources said that Delta Two, which is funded by the Qatari royal family, planned to give in to the board's demands by offering up to £500 million in additional cash.

France

VINCI was down €0.58 to €49.69... Exane reiterates negative sector view - Exane BNP Paribas this morning reiterates the sector view it took on 3 September, when the broker downgraded European Construction to underperform due to 'deteriorating earnings prospects and stretched valuations'. The broker highlights what it sees as a significant risk of earnings downgrades in the sector.

PSA was up €0.35 to €56.00... May cut up to 3,000 jobs p.a until 2010 - press - the company plans to cut up to 3,000 jobs a year in Western Europe until 2010, La Tribune reports, citing CEO Christian Streiff.

SOC GEN was down €1.02 to €112.88... The company reiterates fiscal 2007/08 targets - the company 's CFO Frederic Oudea will reiterate the company's fiscal 2007/08 targets in a presentation to Lehman Bros. in New York later today. Slides prepared for the presentation stress that the company has only 'limited exposure' to US mortgages and LBO financing. In related news, CEO Daniel Bouton was quoted by Le Figaro on Saturday as saying the financial crisis is 'under control' and that the the extent of the company 's exposure to US sub prime woes has not been revised since its release at the beginning of August. In broker news, Natixis cuts target to €137 from €150, keeps accumulate, incorporating subprime and liquidity jitters into its thinking.

Germany

MUNICH RE was down €0.51 to €125.49... Voices of caution from Monte Carlo insurance conference. The company said reinsurers are under pressure to cut premium prices, but added that even a reduced level is high enough to allow it to reach its target of fiscal 2007 net income of up to €3.8 billion. Swiss Re said claims for the reinsurance industry from natural catastrophes are about US$35 billion this year, well above the US$12 billion in claims in 2006. Added that reinsurance price trends are mostly flat or moderately down. It expects insurers and reinsurers to deliver solid 2007 results, but perhaps below 2006 levels. The FT reports that the company will within months begin offering insurance coverage to global companies for their hard-to-insure risks, taking the group away from being a pure reinsurer.

INFINEON was up €0.05 to €12.05... Up on Intel guidance, Qimonda stake sale talk - The company 's shares rise as Intel revises its third quarter sales outlook upwards. Also, according to traders, there is a rumour that AMD is looking to bid for the company 's Qimonda stake. In the press, the FTD reports CEO Wolfgang Ziebart saying the company aims to be an industry consolidator rather than a takeover target. Meanwhile, the company says it will supply up to 1.2 million chips for the patient healthcare card system in New York.

Italy

UNICREDIT was down €0.05 to €5.71... Concentrates on Turkey and not the LSE - The company is concentrating on Turkey and does not have any intention of entering other countries in that region, CEO Alessandro Profumo says to Il Messaggero on Saturday. the company is not interested in acquiring Nasdaq's stake in the London Stock Exchange, Il Giornale wrote on Sunday.

MONTE PASCHI was down €0.06 to €4.43... QIA considers strategy to win LSE stake - The Qatari Investment Authority is considering teaming up with three Italian partners, Fondazione Cariplo, Fondazione MPS and Clessidra fund, to win Nasdaq's 31% stake in Britain's LSE, Il Sole 24 Ore reported. The company reports first half today at market close. Dresdner expects net profit of €487 million for first half07 (+2% year-over-year). But stripping out €24 million of one-offs recorded in the first half06, growth is a slightly better +7% year-over-year. The company says some changes in the consolidation area make comparisons with first half06 complex. Believes that the management of the company has so far delivered on its promises outlined in its recent business plan.

Netherlands

PHILIPS (PHG) was up €0.88 to €29.25... New targets beat consensus - The company expects to more than double EBITA by 2010. SNS Securities says all new targets are far above market expectations. In a strategic update, the company says intends to integrate its current Consumer Electronics (CE) and Domestic Appliances and Personal Care (DAP) businesses into one Consumer Lifestyle sector as of 1 January 2008. Will also combine Consumer Healthcare Solutions, renamed as Home Healthcare Solutions, with Philips Medical Systems, under the new name of Philips Healthcare.

ABN AMRO (ABN) was down €0.74 to €33.09... Bid comes more under pressure amid market turmoil - Shareholders at both Barclays and Royal Bank of Scotland will this week raise concerns with management about the rival bids for the company , according to the Daily Telegraph. A Sunday Telegraph report claimed that Merrill Lynch, the underwriter for RBS, is haggling over the price it will charge for its service due to fundraising issues caused by the global financial market turmoil. Dutch Telegraaf says RBS-consortium is working to find new partner to help finance the deal.

Nordics

WILHELM WILHELMSEN was down NOK5.00 to NOK245.00... New tax proposal puts pressure on shipping sector - Norway's labor-led government proposed on Friday a new scheme for the shipping industry, similar to the tonnage tax elsewhere in Europe and said it planned to impose a tax on undistributed profits retained in shipping companies. The company is quoted on Reuters saying it would have 'a substantial negative effect. Among others, the company falls, as well as BW Gas and Odfjell.

VOLVO (VOLV) was down SEK2.75 to SEK109.50... Heavy truck orders drop - Orderintake for heavy trucks in North America decreased with 28% to 13,800 in August compared with last year.

TELENOR was up NOK0.25 to NOK110.25... Number one mobile operator on DJSI - The company has been named the top performing mobile operator on the Dow Jones Sustainability Indexes (DJSI). The DJSI rank the 14 leading mobile communications companies worldwide, and this is the first year that Telenor occupies the number one spot.

Spain

TELEFONICA (TEF) was up €0.09 to €17.79... ING upgrades to hold from sell and raises target to €18 from €15.50. The broker says the first half 2007 results exceeded its expectations. Thinks the short term looks clear, but warns the medium term may bring surprises, including renewed M&A ambitions.

IBERDROLA was down €0.27 to €38.10... To raise c.€4 billion from renewables listing - press - the company will raise up to €4 billion (£2.7 billion) when it floats its renewables division, reports The Independent on Sunday. Adds the division is valued between €16 billion and €20 billion. The company is to invest €1.3 billion in electricity connections between Scotland and England, according to El Economista. Notes that the company will present its new investment plans in October.

Switzerland

NOVARTIS (NVS) was down CHF0.55 to CHF62.95... US court stops Teva from selling generic Famvir - A US federal appeals court has approved a request by the company and temporarily prohibited Teva Pharmaceuticals from selling its generic version of antiviral medicine Famvir.


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