Wednesday 4 January, 5:00 PM GMT (Thomson Financial): European markets
posted further broad gains, led by the healthcare, insurance and retail
sectors. Crude oil futures declined as Russia and Ukraine announced a 2006 gas
deal aimed at breaking the recent stalemate, while the euro zone harmonised
index of consumer prices in December dipped to 2.2% year-on-year, from 2.3% in
November. Earlier momentum was provided by the minutes from last month's U.S.
Federal Open Market Committee meeting, which indicated a wind down in the pace
of interest rate hikes
In corporate news, Next jumped after upgrading its full year guidance in
the wake of a bullish trading update while shares in Panalpina dropped after
accounting errors forced the resignation of its chief executive. Alstom
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 said it had performed
strongly in 2005 while French carmaker Renault said its global sales in 2005
had grown to 2.53 million vehicles, up 1.7% year-on-year.
Amongst M&A stories, BASF offered to acquire U.S. based Engelhard for
US$4.9 billion, while Banca Intesa 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 rose by 33.10 points or 0.58% to 5714.60, while
Paris's CAC-40 Index climbed by 61.54 points or 1.29% to 4838.52. Frankfurt's
DAX Index ended up by 62.94 points or 1.15% to 5523.62 and Milan's S&P MIB
Index gained 243 points or 0.67% to 36,336. The pan-European blue chip Dow
Jones Stoxx 50 Index ended higher by 35.46 points or 1.05% to 3415.18.
* U.K. fashion retail group Next 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 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 fell 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 offered his resignation and 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 holding 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 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 said 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 said its global sales in 2005 grew to 2.53
million vehicles, up 1.7% year-on-year. There was 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 characterised by a stable market in Western Europe and a drop
in sales in Central Europe, Renault added.
* Banca Intesa 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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SOURCE Thomson Financial Corporate Group
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