Markets & Finance

European Movers: BP, AXA, Arcelor Mittal


Plus more European stocks making headlines Thursday

UK

BP (BP) was up £0.15 to £5.95... Unveils restructuring plans - the company says is to restructure into two business segments, E&P and Refining & Marketing, to improve performance. The current third segment, Gas, Power & Renewables, would be incorporated into the other two. A separate division, Alternative Energy, will handle low carbon business and future growth options outside oil and gas. Chief executive Tony Hayward says while the process would yield some medium term cost reductions, the major benefit would be the revenue boost expected from greatly improved operational efficiency over the longer term. Hayward adds the overall strategy remains robust. Expects revenue gap to narrow as major new production comes on stream in fourth quarter and refinery throughputs rise at Texas City and Whiting over coming months. Does not anticipate major disposals but would not rule out small-scale asset sales.

VODAFONE (VOD) was up £0.07 to £1.78... Talks about certain assets ongoing: Telkom - Market talk does the round that chief executive Arun Sarin may be leaving the company. Traders don't attach much credibility to the rumour. A the company spokesman refused to comment. South Africa's Telkom reportedly says that talks with the company and MTN Group regarding certain assets. Note that there was speculation last month that Telkom wanted to sell its 50% stake in Vodacom - 50% of which is owned by the company Also, Telefonica is proposing a DPS of €1 for 2008, bringing forward the commitment announced in May 2006 of doubling the dividend. Adds will make only selective acquisitions. The Spanish telecoms company says will also report rises in profits over next four years.

BRADFORD & BINGLEY was up £0.03 to £2.82... Standard Life Investments holds 3.2% - Shares gain as traders attribute the rise to a read-across from Northern Rock's shares rise. 'Some people are going long on it (Co.) today,' a trader says. Moreover, there is talk that the company had a good investor day in the US. Also, yesterday after market close Standard Life Investments said in a regulatory statement it holds a 3.217% stake in the company.

France

FRANCE TELECOM (FTE) was up €0.98 to €24.12... Telefonica to double 2005 dividend next year - Peer Telefonica moved forward by one year its goal to double the 2005 dividend and pledged to increase annual sales as much as 8% through 2010. Goldman Sachs removes from conviction buy list but keeps buy with €25.95 target price. The company says that since 9 August 2007, when broker added the company to Conviction Buy List, the shares have risen 11.8% vs the FTSE World Europe index up 4.7%. Over the last 12 months, the shares have risen 24.7% vs the FTSE World Europe index up 12.7%.

AXA (AXA) was down €0.26 to €31.49... Deutsche Bank downgrades to hold from buy following recent share price recovery. The company says that investors are in the process of re-visiting the growth profile and prefer comps where the investment proposition is clear. That said broker believes the company still represents an attractive spread of global assets, with a strong CEO and management team. €35 target.

SOC GEN was down €1.19 to €123.70... Revived talk for Commerzbank - According to several traders, there is a renewed rumour doing the rounds that the company may be interested in Germany's Commerzbank.

Germany

VW was up €8.33 to €183.57... Takes stake in biofuel firm Choren with the aim of expanding use of BTL (biomass to liquid). The company says Daimler has taken a stake as well. Separately, the company raises its 2007 China sales target to 900,000 vehicles after having posted nine months China sales up 30% to 684,786 vehicles.

DEUTSCHE BOERSE was down €1.17 to €105.57... To replace ABN Amro in EURO STOXX 50 - with the change effective as of the opening of trading on Monday, 15 October.

DEUTSCHE POST was up €0.31 to €21.67... To enter EURO STOXX sel. dividend 30 index replacing ABN Amro. Changes are effective on Monday, 15 October.

Italy

ENI (E) was up €0.23 to €26.33... Wins 26 new exploration licences in GoM - the company has been awarded 26 new exploration licenses in the Gulf of Mexico after bidding a total of US$47.8 million at Lease Sale 205 held in New Orleans on 3 Oct, 2007. The deal is subject to approval of local authorities. Total CEO Christophe de Margerie says talks between the Kazakh govt and the company should be wrapped up by year-end. A resolution to this ispute would be welcome news as it would eliminate uncertainty over the development of the Kashagan oilfield. S&P's Ratings has affirmed its 'AA/A-1+' long-term and short-term corporate credit ratings on the company after Eni said it had made a US$2.7 billion nonbinding offer for UK Burren Energy. The outlook is stable. However, the outlook could be revised to negative if the company makes a firm offer for Burren without making any commitments on future debt leverage and other financial policies, as recent M&A could signal a directional shift.

BENI STABILI was up €0.01 to €0.87... Exane initiates with neutral and €0.86 target. Highlights the company 's bond-like portfolio with limited upside potential. Notes the company has grown its portfolio through major sale-and-leaseback transactions on office assets in Italy. The gross yield on its current portfolio appears relatively low at 5.0% (2006). The company says as leases have a long length, the company will not be able to capture significant reversionary potential in coming years.

Netherlands

ARCELOR-MITTAL (NL) (MT) was up €1.00 to €56.50... Tenaris rules out takeover - Italy's Tenaris pledges to remain independent, ruling out any possible sale to the company , writes the Financial Times. CEO Paolo Rocca says he sees a huge opportunity in this business and does not want to be bought out by the company or anyone else, the newspaper added.

FORTIS was up €0.29 to €23.55... Sells remaining 18 million shares at EUR23.70 - the company has announced that its 2-for-3 rights issue of just under 900 million new shares at €15/new share, which closed on 9 October, saw 97.995% acceptance. The remaining 'rump' of just under 18 million shares has been sold at €23.70/share in a private placement. The issue was established to raise funds for ABN Amro - the company is part of the RBS-led consortium which declared its offer for ABN unconditional yesterday.

Nordics

NOKIA (NOK) was up €0.94 to €26.84... Merrill resumes coverage with buy and sets target at €31.

STATOILHYDRO (STO) was up NOK6.50 to NOK179.50... Goldman adds to buy list /Libyan investigation terminated - Goldman adds to Pan Europe conviction buy list, with NOK223 valuation. Notes the company has underperformed the oil & gas sector by 7% since its peak on 20 September. The company says the stock is trading at an 8% EV/DACF discount to the sector in 2007. Estimates this discount will widen to 21% by 2010 Separately, the investigation of the company regarding oil dealings in Libya has been terminated, after Norwegian economic bureau said it saw no basis for its continuation, according to Reuters.

METRO INTERNATIONAL was down SEK0.15 to SEK7.05... Loses readership in Sweden - the company lost 55,000 readers in Sweden in June to September 2007 compared to the same period last year and total readership now amounts to 1.5 million, Dagens Industri reports.

Spain

TELEFONICA (TEF) was up €1.35 to €20.67... €1 DPS for 2008 / Strong guidance 2006-10 - the company sees revenues CAGR of 5-8% for 2006-10, sees OIBDA up 5-8% and operating income up 16-20% for the same period. Guides for 2010 EPS of € 2.304 vs €1.304 in 2006. Sees CAGR in accesses of above 9%. the company also announces that at today's investor day in London it will propose a dividend of €1/sh for 2008, bringing forward the commitment announced in May 2006 of doubling the dividend. Adds will make only selective acquisitions. Telefonica O2 Europe says expects CAGR 2006-10 of 4-8% for revenues and 5-9% for OIBDA. Telefonica de Espana expects 2006-10 CAGR of 2-3.5% for revenues and 3-6% for OIBDA. UBS ups target to €19.20 vs €17.20, neutral.

Switzerland

JULIUS BAER was up CHF4.00 to CHF98.75... Talk the company may spin off US asset mgmt - According to traders in Zurich, there is vague speculation that the company may look to spin off its US asset management unit, which had assets under management of about CHF84 billion at the end of June. One London-based analyst says the move is highly likely and would be positive as it would free up capital for smaller acquisitions and make it a tighter-knit group.

MICRONAS was up CHF2.55 to CHF19.60... The brokers upgrade after restructuring announcement - Following a strategic review, the company is to selectively streamline its product portfolio in the Consumer division, significantly reducing the complexity of the offering in the TV segment. Following the announcement, Exane upgrades to outperform from neutral. WestLB upgrades to hold from sell, keeps target price of CHF17.50. Results-wise, the company posted third quarter sales of CHF186.5 million, with operating loss of CHF409.7 million. Said it will sell its US business. Sees fiscal sales in the region of CHF700-715 million, and net loss at CHF560-585 million.

KUEHNE & NAGEL was down CHF4.40 to CHF126.50... Being investigated by authorities - the company says that various competition authorities have carried out an unannounced inspection at a number of international freight forwarding companies, including the company in Switzerland, in the USA, and in the UK. The company says the investigation relates to alleged anti-competitive activities in the area of international freight forwarding.


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