Markets & Finance

European Stocks Finish Mixed


LONDON

The FTSE 100 closed higher as Wall Street traded flat. A WTI rebound boosts heavyweight oil stocks; WTI trades higher at US$46.90 on reports Saudi Arabia's November production was below analysts estimates and the country will cut output in January. Separately, the IEA is predicting oil demand will resume in 2009 and lowered forecasts for supply outside OPEC.

In the news, TULLOW OIL (+21.29%) has announces successful drilling results in Ghana and Uganda and says they are likely to lead to material upgrades of current resource estimates. BUNZL (-2.4%) said overall performance is in line with expectations and the stronger US$ and euro have had an increasingly positive translation. Het Financieele Dagblad reported that after halting the sale of RBI, REED ELSEVIER (-4.18%) plans to issue debt to finance the purchase of Choicepoint. LOGICA (-6.18%) completed its

equity placing and raised GBP90.50m (gross). Proceeds will be used to reduce debt. PREMIER FARNELL (-3.5%) reported 3Q sales in line with forecasts, with PTP up 4% to GBP17.7m. HMV (-3.6%) posted disappointing 1H sales, flat LFL, with a pre-tax loss of GBP27.50m, at the sharp end of forecasts. -ROA- S&P MarketScope

PARIS

The CAC 40 (-0.43%) closed the session lower with Wall Street trading in the red. Crude oil rises to c.US$47 a barrel after Saudi Arabia said it is producing near its OPEC target, a sign it is complying with supply cuts agreed by the group in October.

Locally, TOTAL (+2.76%) added 12 index points. The French government bought EUR 2.55bn of securities from BNP PARIBAS (+1.31%). RENAULT (+0.29%) also outperformed after Morgan Stanley

upgraded to overweight. Meanwhile, grim sector news for steelmakers: China's export of steel products fell by 36% m/m in November due to weakened global demand, The Times wrote. ARCELOR MITTAL (-4.05%) fell.

Elsewhere, BOUYGUES (+0.56%) Chairman-CEO Martin Bouygues has told Les Echos he plans to hire up to 15k workers next year. He remained interested in a tie-up between ALSTOM (-1.84%) and AREVA (-3.14%). FRANCE TELECOM'S (-0.30%) Orange unit and VIVENDI's (+0.61%) SFR are being investigated by French competition authorities, La Tribune reported.

In the wider market, THOMSON (+18.52%) completed the sale of its digital film production unit. Exane downgraded MANITOU (-3.16%) to underperform. -JW & JM - S&P MarketScope

FRANKFURT

Xetra-Dax (-0.78%) finished the day with minor losses as US indices were also in the red. Investors were somewhat concerned as the US$14bn Big Three bailout proposal faced a vote in the Senate.

Of local note, COMMERZBANK (-2.39%) will receive US$8.2bn as part of a rescue package and pay 8.5% interest on half of that sum and 5.5% on the other half, rendering it more expensive than expected. The EU's approval of the measure is expected at the end of the week. DAIMLER's (-3.03%) head of trucks gave a grim outlook late yesterday, saying order intake has almost come to a halt with no short-term rebound in sight.

CONTINENTAL (-2.45%) cut its 2008 profitability outlook and said it could scrap the dividend this year because of tough market conditions. Schaeffler, meanwhile, said rumours that it is looking to delay the takeover are nonsense. DEUTSCHE POST (-3.18%) reaffirmed its FY08 EBIT target of EUR 2.4bn and said it plans to pay a dividend of at least equal to the 2007 level. Sal Oppenheim will keep its stake in department stores operator ARCANDOR (+5.02%) for at least five years, supervisory board member Janssen told FAZ. Finally, FRAPORT (+1.38%) disclosed that November passenger traffic was down 7% and cargo 8.2% lower y/y at Frankfurt airport. -Michael Sanderson - S&P MarketScope

ZURICH

The SLI (-0.58%) ended in the red amid more gloomy news on the US economy. The trade deficit was deeper than expected in October and initial claims rose to a whopping 573k for the week. 4cast said the trade deficit numbers so far suggest that there is a risk that 4Q US GDP could be a touch worse than it was expecting, which was at around -4.3%.

Swiss macro news was no less gloomy. The SNB cut its interest rate by 50bp and said it is now forecasting that Swiss GDP growth will be negative, not only during the first two quarters of next year, but also on average for 2009 as a whole.

Among stocks in focus was UBS (-1.01%) as the SEC finalised settlements regarding auction rate securities. The settlements resolve the SEC's charges that both UBS and Citigroup misled investors regarding the liquidity risks associated with these securities that they underwrote, marketed and sold.

In other news, ZURICH FINANCIAL (-2.49%) was said to be interested in buying parts of AIG as the troubled US insurer plans to announce disposals before the end of the year. Cheuvreux analyst Michael Klien said the reported price seems high but that financing wouldn't be a problem and that AIG's US personal lines unit would cement Farmers top 3 position. In the broader market SCHINDLER (-1.61%) fell as ALSO, which it majority owns, issued a profit warning. -Pawan Girglani - S&P MarketScope

AMSTERDAM

The AEX (-0.54%) finished the penultimate day of the trading week with minor losses, as US indices were also a touch lower. ARCELOR MITTAL (-4.05%) and UNILEVER (-1.47%) weighed while RDS (+1.53%) lent some support to the index. WTI crlimbed to US$46.95 after the Saudi oil minister said his country produced 8.49m bpd in November, in line with OPEC target but below analysts estimates.

In local news, Belgian daily De Tijd noted that the Belgian government is not ruling out handing over its 11.6% stake in BNP Paribas to FORTIS (+15.34%) shareholders. Het Financieele Dagblad reported that after halting the sale of RBI, REED ELSEVIER (-5.82%) plans to issue debt to finance the purchase of Choicepoint. LOGICACMG (-6.55%) completed its equity placing and raised GBP90.50m (gross). The company said proceeds will be used to reduce debt.

The Economic Times reported that HEINEKEN (+4.45%) will pay Indian United Breweries US$100m p.a. for a few years to bottle and distribute Co.'s brands in India. Key for the likes of Arcelor Mittal: Chinese steel exports were down 36% m/m in November. Finally, CRUCELL (+3.76%) said that its monoclonal antibody directed against a broad range of influenza virus strains strongly outperformed the most current anti-influenza drug in preclinical tests. -RJB - S&P MarketScope


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