A roundup of Friday's action on major European exchanges
The FTSE 100 closed well in the black on positive broker views on the pharma and life insurance sectors and M&A in mining and utilities. Wall Street was trading higher. VEDANTA (+7.16%) was firm on talk of bid interest from China. Also, India's Supreme Court barred Vedanta from mining bauxite in the eastern part of the country. WTI was at US$97.86/bbl. In broker moves, Citigroup upgraded AVIVA (+5.34%) to buy from hold, arguing it could be the best buying opportunity in the sector since 2003. Also, Deutsche Bank boosted pharma stocks by saying that there are 'few catalysts, but valuation finally grabs some attention'. In utilities, PE firms Montagu and HgCapital said BIFFA (+24.76%) had rejected their bid approach. In company updates: GCAP MEDIA (-14.24%) said first half pretax profit slipped to £5.6 million and that CEO Ralph Bernard is to leave. INFORMA (+3.48%) appointed Adam Walker as finance director, adding it is on course to meet expectations for the group for the full year. NATIONAL EXPRESS (+3.31%) says trading remains in line with expectations, with particularly strong revenue growth at UK Trains. The company added that Adam Walker is to step down from his post as finance director to join Informa.
The CAC 40 (+1.94%) closed higher, with Wall Street trading positively on Black Friday. In Paris, SANOFI (+2.02%) was firm following a positive sector note from Deutsche Bank. ARCELOR MITTAL (+3.55%) plans a listing in India, wrote The Times of India. Elsewhere, AREVA (+4.94%) could see billions of €invested - Germany's Siemens is 'ready' to increase its 34% stake in Areva NP, its nuclear reactor arm, according to Les Echos. However, the paper added that Siemens would not be happy to share Areva's capital with its rival ALSTOM (+4.9%). There has been much market murmuring over a possible grand tie-up involving Areva, Alstom and BOUYGUES (+2.56%). The plot thickened as La Tribune cited a trade union source suggesting French state-funded nuclear body CEA may reduce its 79% stake in Areva. Among financials, AXA (+4.3%) is making moves for CNP ASSURANCES (+11.0%), Les Echos reported. NATIXIS (+4.05%) shot higher having been upgraded to hold by Citigroup. CREDIT AGRICOLE (+5.0%) is seeking permission to be able to take its stake in Spain's Bankinter up to 30%. EADS's (+0.52%) Airbus has slashed R&D budgets in response to fears over the weakening US$, the FT reported. REXEL (+4.84%) has sealed its €4.85/sh takeover of NL's Hagemeyer.
Xetra-Dax (+0.62%) closed in the black, above the 7600 level, as Wall Street was trading in positive territory on Black Friday, the day retailers are traditionally said to turn a profit as shoppers go bargain hunting after Thanksgiving. The US closes early today at 18:00 GMT. On the local macro front, German import prices excluding oil for October were up 0.4% m/m and down 0.1% year-over-year. POSTBANK (+4.14%) remained the leading blue-chip gainer as COMMERZBANK's (+2.01%) CEO says it is interested. Commerzbank also still wants to make an acquisition in Russia after failing to acquire a majority stake in Promsvyazbank, Interfax reported. In other news, SIEMENS (+2.18%) is 'ready' to increase its 34% stake in Areva NP, Areva's nuclear reactor arm, according to Les Echos. Merger plans between LUFTHANSA's (+1.63%) Germanwings unit and TUI's (+0.06%) TUIfly division are set to include Eurowings too, people familiar with the matter told Reuters. Both companies would each hold 40% of a planned joint airline, Sueddeutsche Zeitung reported. BEIERSDORF (-0.15%) wants to divest Tesa, its adhesives unit, and may sell stock in the division to its shareholders, according to Manager Magazin. There was talk of Kuwait raising its stake in GEA (+8.51%) to 25%. Away from M&A, DEUTSCHE BOERSE's (+2.81%) supervisory board is likely to extend CEO Reto Francioni's contract until 2013.
The AEX (+1.19%) closed higher, with Wall Street in positive territory on Black Friday, the day retailers are traditionally said to turn a profit as shoppers go bargain hunting after Thanksgiving. PHILIPS (+4.93%) rose further as the Lower House of Dutch Parliament passed a bill which doubles the limit on the amount of tax-free share buybacks. The news was particularly positive for Philips as it has a large amount of cash for share buybacks available. Separately, Philips wants to sell its Lighting unit in Winschoten, according to local press reports. In other news, the EU has extended its deadline to review AKZO NOBEL's (+3.25%) takeover of ICI. Akzo still expects the deal to close in January. HAGEMEYER (+1.96%) has reached an agreement on a €4.85 per share bid by France's Rexel. ARCELOR-MITTAL (+3.35%) wants to list on the Indian stock exchanges, using the Indian Depository Receipts (IDR), The Times of India reported. The steelmaker announced today that it bought back 3 million shares for €143.3 million between 16 and 22 November. HEINEKEN (-0.74%) is in talks to acquire Czech beverage group Drinks Union, daily MF Dnes reported, citing two unnamed sector sources.
After a rather choppy week, the SLI finished at a lower level than it had done at the end of the previous week. On Friday, however, markets were in fine fettle as Wall Street enjoyed a minor post-Thanksgiving session rally, on a shortened trading day. Back in Zurich, pharmas and financials were among the outperformers. Deutsche Bank reiterated its overweight on the pharma sector based on attractive valuations; says that its top picks include NOVARTIS (+3.33%) and ROCHE (+0.37%). Anglo-Swedish AstraZeneca is another top pick for the broker. Financials also fired up, as bargain hunters scooped up names like UBS (+3.41%). JP Morgan thinks ZURICH FINANCIAL (+1.99%) offers a pricing anomaly which it believes could close in the short term. For this reason, highlighted the stock as a short term trading idea while not changing its fundamental recommendation of neutral or price target of CHF435. On the news front, Domtar said it has won a judgment by the Supreme Court of Canada in a claim against ABB (+2.19%) and Alstom Canada Inc. The two companies have to pay Domtar c.CAD38.7 million in damages and interest. UNIQUE ZURICH AIRPORT (+0.96%) named Thomas E. Kern to become new CEO as of 15 January 2008. The airport operator also says CFO Beat Spalinger will leave in April 2008. In broker action, Goldman downgraded SONOVA (-3.17%) to a conviction sell.