Wednesday 4 January, 1:00 PM GMT (Thomson Financial): European markets
continue to trade in positive territory despite some temporary jitters on
reports of a major earthquake in Southern California. Meanwhile, Russia and
Ukraine have announced a 2006 gas deal aimed at breaking the recent stalemate,
while the euro zone harmonized index of consumer prices in December has dipped
to 2.2% year-on-year, from 2.3% in November.
In corporate news, Next continues to trade higher after upgrading its full
year guidance in the wake of a bullish trading update while shares in
Panalpina remain lower after accounting errors caused the resignation of its
chief executive. Alstom has effectively announced its eventual exit from the
shipbuilding industry by taking a minority stake in a joint venture with Aker
Yards and the sale of its investment in 2010. Irish building materials maker
CRH says it has performed strongly in 2005 while French carmaker Renault says
its global sales in 2005 have grown to 2.53 million vehicles, up 1.7% year-on-
year.
Amongst M&A stories, BASF has offered to acquire U.S. based Engelhard for
US$4.9 billion, while Banca Intesa has launched an offer to buy the remaining
65% of shares in Bosnia-Herzegovina's UPI Banka that it does not already own.
London's FTSE-100 Index has risen by 24.10 points or 0.42% to 5705.60,
while Paris's CAC-40 Index has climbed by 41.12 points or 0.86% to 4818.10.
Frankfurt's DAX Index has gained 40.24 points or 0.74% to 5500.92 and Milan's
S&P MIB Index has added 195 points or 0.54% to 36,288. The pan-European blue
chip Dow Jones Stoxx 50 Index is higher by 20.84 points or 0.62% to 3400.56.
* U.K. fashion retail group Next has raised its full year guidance, with full
year pre-tax profits forecast to be in the 435-450 million pounds range,
exceeding market expectations. Meanwhile, its trading statement has revealed a
9.8% year-on-year rise in combined sales for Next Retail and Next Directory
for the period from 1 August to 24 December 2005.
* Shares in global transport and logistics group Panalpina remain lower as a
result of accounting errors made by a manager at its airline management unit,
with incurred losses by manipulating the booking records over a period of 14
months. Group Chief Executive Bruno Sidler has offered his resignation and has
left the company. The incident will have a negative impact on the operating
results for 2005 in the region of 22 million Swiss francs and 11 million
francs for 2004.
* Alstom and Aker Yards have formed a shipbuilding joint venture with a focus
on high value added ships, including world-class cruise ships. Aker Yards
would own 75% of this new company while Alstom says it will commit itself to
keep the remaining 25% until 2010. Aker Yards would pay 50 million euros for
the 75% stake of the new company. Depending on the financial performance, the
remaining 25% would be sold to Aker Yards for up to 125 million euros in 2010.
* German chemicals group BASF has offered to acquire U.S. based Engelhard
Corporation, a leading supplier of goods for catalysis and surface finishing,
for US$37.00 per share or an aggregate of US$4.9 billion.
* Irish building materials maker CRH says it performed strongly in 2005 with
full year pre-tax profits expected to exceed 1.25 billion euros compared to
1.10 billion euros in 2004. The company said first half activity benefited
from strong organic growth in its American operations, combined with
contributions recent acquisitions. In the second half, American operations
coped well with higher energy costs while European markets, particularly from
materials activities, saw improved trading patterns, CRH added.
* French carmaker Renault says its global sales in 2005 grew to 2.53 million
vehicles, up 1.7% year-on-year. There has been a contrasting performance with
international sales (ex-Europe) growing by more than 21% year-on-year while
sales on European markets declined by 4.1% year-on-year. The European car
market was characterized by a stable market in Western Europe and a drop in
sales in Central Europe, Renault added.
* Banca Intesa has launched an offer to buy the remaining 65% of shares in
Bosnia-Herzegovina's UPI Banka that it does not already own for 30.1 million
euros.
Simon.Tse@Thomson.com; Thomson Financial
This is Thomson Financial Corporate Services Europe Market Commentary. The
information herein is believed to be true and accurate. If you have any
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