Markets & Finance

European Indexes Finish Higher


A rundown of Monday's action on major European stock exchanges

LONDON

The FTSE 100 closed higher even with Wall Street in the red. WTI trades at US$47.21/bbl. In company news, RIO TINTO (+2.36%) is mulling a US$2bn dividend reinvestment plan as it seeks to reduce debt, according to Weekend Australian. VODAFONE (+4.35%) is close to signing a deal with Orange to share the costs of technology, engineering and maintenance at UK bases, according to the Observer. In broker changes, Deutsche Bank and Exane cut targets on banks: HSBC (-0.44%), RBS (unch), BARCLAYS (+2.55%), STANDARD CHARTERED (+6.15%). Deutsche also made changes on media stocks: REED ELSEVIER (+3.83%), YELL (+8.11%), BSKYB (+0.1%). In updates, JJB SPORTS (+63.5%) surged after saying it has appointed David Jones as CEO and hired Peter Williams as executive director. CARILLION (+3.63%) has secured a Nottingham school contract worth GBP13m. AUTONOMY (-2.85%) said it has entered into a multi-million dollar archiving software license agreement with BAE SYSTEMS (+4.45%). Looking ahead to tomorrow, DEBENHAMS (+11.76%) and NEXT (-1.62%) give updates.

PARIS

The CAC 40 (+0.31%) closed moderately higher, with Wall Street in negative territory, paring some of last week's gains. WTI was above the settle at US$47.27/bbl - TOTAL (+1.71%). Back home, broker changes made some waves. Goldman Sachs downgraded CARREFOUR (-1.98%) to neutral from buy following last month's profit warning. Citigroup downgraded RENAULT (-3.23%) to sell from hold and cut target to EUR 12.00 from EUR 36.00, highlighting volumes and related issues. Broker believes Renault's numbers are in line with a new base of EU car sales falling a further 15% on its FY09 ests. In related news, the CCFA has unveiled French auto sales in December fell 15.9% y/y: PSA (+1.6%). Among telcos, FRANCE TELECOM (+1.47%) climbed amid press reports Orange is close to signing a deal with Vodafone to share the costs of technology, engineering and maintenance at UK bases. Elsewhere, AIR FRANCE-KLM (+2.04%) is favorite versus rival Lufthansa to become Alitalia's foreign industrial partner, La Tribune reported. In the wider market, Goldman Sachs lifted target on THALES (+3.9%) to EUR 38.90 and kept its buy stance.

FRANKFURT

Xetra-Dax (+0.22%) finished the day just a touch above breakeven, as US indexes traded lower. US car sales data is due later today but VW (-1.68%) already reported FY08 sales down 3.2% to 223,128 vehicles, with December sales down 14%. Moreover, Italian and French car registrations for December fell 13.3% and 15.8%, respectively. Japan saw a record 22% drop in car sales last month. German car stocks suffered: BMW (-2.17%); DAIMLER (-3.96%); PORSCHE (-6.56%). Stock-specific news saw DAIMLER saying it has no interest in acquiring Volvo from Ford. Broker-wise, BMW was downgraded to underperform at Exane and PORSCHE was cut to hold at SocGen. In other news: RWE (+3.21%) has a good chance of buying Holland's Essent, which is expected to be put up for sale in the next few weeks, according to Focus magazine. The FTD reported that INFINEON (+13.43%) will ask shareholders for approval to raise EUR 450m of fresh capital this year. GRENKE LEASING (+5.59%) said new business remained strong in 4Q, amounting to EUR 601m, representing 24% growth. HOCHTIEF (+1.83%) told the FT that only a few orders had been cancelled so far and that it is on track to meet its earning target for 2008. More broker action saw DEUTSCHE WOHNEN (+3.58%) higher as WestLB added the stock to its Mid & Small Cap Focus List.

NORDIC

Copenhagen (+5.86%) remained top Nordic performer at close, followed by Helsinki (+4.5%). Oslo (+1.68%) also closed higher, while Stockholm (unch.) gave up its earlier gains. Wall Street traded lower in the morning session, with profit-taking from last week's gains overshadowing hopes that President-elect Barack Obama's plan for massive tax cuts will help revive economic growth. WTI gained marginally, trading at US$46.94/bbl. Of interest in the Nordic region, SAS (+7.78%) soared as Jyllands-Posten wrote that a sale of the Scandi aviation group to Lufthansa is imminent. In the real estate sector and key for the likes of KUNGSLEDEN (+0.45%) and HUFVUDSTADEN (+0.43%); analysts forecasted property prices will continue to fall in 2009, despite recent rate cuts, with increasing unemployment rate being the main contributing factor, Dagens Nyheter reported. In brokerage focus, Goldman raised target price for GENMAB (+2.1%), while keeping the stock on its conviction buy list. Meanwhile, Deutsche Bank downgraded MTG (-1.43%) to hold and trimmed target for the stock, Goldman lowered its price objective for NORSK HYDRO (-2.38%) and Citigroup cut VOLVO's (-0.44%) target.

SPAIN

Spanish shares closed solidly in the black, batting off losses on Wall Street. WTI was at US$47.23/bbl. Spanish EU harmonized inflation fell to a 10-year low of 1.5% in December vs 2.4% in November. Spanish consumer confidence edged up a touch to 48.9 in December from 48.7 m/m. On the corporate front, FERROVIAL (+8.45%) was in focus on news a new GBP4.5bn international rail exchange for Heathrow airport is being backed by British Transport Minister Lord Adonis, according to press reports. FERROVIAL was further eyed on reports Budimex has won a EUR 2bn Polish highway contract. Meanwhile, OHL (+1.35%) will start receiving tariffs from its five new Brazilian toll roads in 1Q09, Cinco Dias reported. In other news, Santander, BBVA and Caixa Galicia have injected EUR 443m into MARTINSA FADESA (susp.) via the purchase of property assets, Expansion writes. MECALUX (+0.15) has said it is reconsidering the acquisition of US group Interlake after deciding not to exercise its buy option in November.


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