Tuesday 20 December, 5:00 PM GMT (Thomson Financial): European markets
ended the trading session slightly higher, led by the basic resources and
utilities sectors, with benign U.S. producer price inflation and
better-than-expected new home construction providing some added momentum.
Meanwhile, the value of the U.S. Dollar has strengthened against the Euro,
providing good news for exporters with goods bound for North America.
In corporate news, ABB was one step closer to resolving its asbestos
related litigation with a U.S. bankruptcy court, confirming the revised
reorganisation plan for its Combustion Engineering unit. In the banking
sector, BNP Paribas acquired a 51% stake in the Ukrainian banking group
UkrSibbank, while Bank of Ireland Group purchased a 71.5% stake in
Guggenheim Alternative Asset Management. Old Mutual had enough support to
proceed with its hostile bid for Sweden's largest insurer Skandia, while
Zurich Financial Services proposed the election of Donald T. Nicolaisen to
the Board of Directors.
Elsewhere, Danish wind turbine manufacturer Vestas Wind Systems received a
U.S. order from Horizon Wind Energy, while GPC Biotech and Pharmion
Corporation entered into a co-development and license agreement for
satraplatin. E.ON said it was planning a 18.6 billion euros investment
programme for the next three years, intended above all, to reinforce
security of supply in its markets. Finally, Gaz de France issued a profit
warning, while Capita Group issued a robust trading statement.
London's FTSE-100 Index was up 8.10 points or 0.15% to 5,547.90, while
Paris's CAC-40 Index was up 8.62 points or 0.18% to 4,703.48. Frankfurt's
DAX Index was up 6.42 points or 0.12% to 5,366.60 and Milan's S&P MIB
Index was up 191.0 points or 0.54% to 35,538.0. The pan-European blue chip
Dow Jones Stoxx 50 Index was up 11.61 points or 0.35% to 3,349.22.
* Swiss engineering group ABB remained higher after a U.S. Bankruptcy
Court confirmed the revised plan of reorganisation for its Combustion
Engineering (CE) unit, This followed a vote by asbestos claimants, in
which they overwhelmingly approved the plan of reorganisation, The plan
will protect ABB and its subsidiaries against current and future claims;
under the plan, ABB has committed US$1.43 billion for a trust fund for
claims against CE.
* BNP Paribas acquired a 51% stake in UkrSibbank and has entered into a
long-term partnership to jointly continue the development of the bank.
With this acquisition, BNP Paribas entered the rapidly expanding and
consolidating Ukrainian banking market with a top five market position, a
solid franchise and a recognised and trusted brand name. Former
controlling shareholders Mr Yaroslavsky and Mr Galiyev will remain
shareholders in the bank with a combined 49% shareholding.
* Bank of Ireland Group purchased a 71.5% stake in Guggenheim Alternative
Asset Management, a U.S. fund of hedge funds manager with an estimated
US$184 million in cash.
* Old Mutual had enough support to proceed with its hostile bid for
Sweden's largest insurer Skandia, according to news of validated
acceptances for the offer, representing 62.5% of the total number of
shares and votes in Skandia.
* Zurich Financial Services said its Board of Directors will propose to
the 2006 Annual General Meeting of shareholders on April 20 the election
of Donald T. Nicolaisen to the Board of Directors.
* ABN Amro incurred a civil penalty of US$80 million in connection with
deficiencies within its U.S. dollar clearing operations at its New York
branch and violations of regulations originating at its branch in Dubai.
* Rentokil Initial's deficit of its U.K. pension scheme as at 30 November
2005 was estimated to be 325 million pounds. An agreement was reached
between the company and the trustees to make an immediate payment of 200
million pounds, with the remaining deficit being met by a series of
payments ending no later than January 2012. Rentokil decided to address
its pension scheme deficit by proposing to close the defined benefits
section of its scheme for the future accrual of benefits for active
members.
* Danish wind turbine manufacturer Vestas Wind Systems received a U.S.
order from Horizon Wind Energy for 600 Mega Watts (MW) of V82-1.65 MW and
V80-1.8 MW wind turbines, with an option for an additional 200 MW.
* GPC Biotech and Pharmion Corporation entered into a co-development and
license agreement for satraplatin, the only oral platinum-based compound
in advanced clinical development. The drug had shown promising results in
a study of first-line treatment of patients with hormone-refractory
prostate cancer (HPRC) and is currently the subject of a phase III trial
as second-line chemotherapy treatment for patients with HRPC.
* E.ON's planned investments for the next three years will total
approximately 18.6 billion euros, intended above all, to reinforce
security of supply in its markets. Almost 90 % of the total will be
capital expenditure on property, plant and equipment. Most of the
investments will serve to modernise or build power stations and grids,
while 1.2 billion euros will be used for renewable energy. Around 2.3
billion euros will be earmarked for financial investments, especially in
Eastern Europe and in the gas production sector.
* Gaz de France (GdF) issued a profit warning, less than six months after
its partial privatization. The company said the French government's
decision Friday to veto a proposed increase in regulated gas tariffs for
households and small corporate customers will dent both its revenue and
operating profit by 250 million euros in the first quarter of 2006. GdF
said that since it has been prevented from passing on the higher price of
gas imports to some of its customers, it will have lost revenue of 500
million euros in January and a total of 750 million euros at the start of
April.
* UK outsourcing company Capita Group issued a robust trading statement
with the first half of 2005 reflecting good organic growth in turnover and
profit, augmented by a number of small acquisitions in some new market
segments, which offered good growth potential. This progress was
maintained in the second half. Year-to-date the company announced 843
million pounds of significant new contracts and contract extensions.
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
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SOURCE Thomson Financial Corporate Group
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