Greece Uncertainty; Vestas Turbine Order

Mayank Mehta
26 Apr, 2010
New York City

The euro traded lower and stocks closed higher after Germany demanded credible budget deficit cut from Greece. Air Liquide first quarter revenue up 5.2%. L

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – The euro traded lower and stocks closed higher after Germany demanded credible budget deficit cut from Greece. Air Liquide first quarter revenue up 5.2%. L’Oréal USA takes over Essie Cosmetics. TomTom NV increased 8.2% to €6.48.[/R]

European benchmark indexes closed higher after positive earnings in the region and rising commodities prices in the international markets. Weir Group and TomTom NV closed higher after profits were ahead of market expectations.

The euro declined 0.5% against the dollar and 0.6% against the pound as Greece negotiates final details of the bailout package.

Germany Demands Budget Deficit Cuts from Greece

German Chancellor Angela Merkel’s demand from Greece for a “sustainable, credible” plan to cut its budget deficit has raised doubts on the resolution for Greece''s debt crisis. The German Chancellor plans to take a decision may be in a “few days.”

Greece''s finance minister expressed confidence that his country will receive rescue funds from European countries and the International Monetary Fund.

Greece is relying on emergency funds from the European Union and the International Monetary Fund to roll over €12 billion of bonds next month. However, investors are still worried that Greece has too much debt and cost of debt for Greek bonds is still too high for its economy.

E.ON AG to Cut Debt

E.ON AG, the German power and gas company is considering bids for its U.S. utility business worth at least €4 billion by selling assets to cut debt, according to a report published by Bloomberg News.

E.ON’s U.S. unit supplies more than 900,000 power and 318,000 natural gas customers through the Louisville Gas and Electric Co. and Kentucky Utilities Co., according to the company’s website. Duke Energy Corp. is among the potential buyers for the unit.

Vestas Gets Big Order

Vestas Wind Systems A/S won an order to deliver and maintain turbines in Europe and North and South America for EDP Renovaveis SA. All the turbines are for land based systems but the company did not disclose the size of the order.

Under this agreement, Vestas will supply the Portuguese utility with 1,500 megawatts of turbines in 2011 and 2012 which includes a two-year service and maintenance agreement.

EDP-Energias de Portugal SA is the third largest wind power generator and expects to have installed capacity of 10,500 megawatts in the U.S. and Europe by 2012.

The order is estimated by market analysts to be between Dkk12 billion and Dkk16 billion.

In London FTSE 100 Index closed higher 30.20 or 0.53% to 5,753.85, in Paris CAC 40 Index increased 46.09 or 1.17% to close at 3,997.39, in Frankfurt DAX index higher 72.57 or 1.16% to close at 6,332.10. In Zurich trading SMI increased 35.77 or 0.53% to close at 6,803.74.

Gainers & Losers

Air Liquide SA added 2.1% to €90.25 after the producer of industrial gases said first quarter sales rose 5.2% to €3.15. Revenue at its gas and services unit increased 8.3% to €2.76 billion.

BNP Paribas SA advanced 2.5% to €54.32.

Credit Agricole SA rose 1.1% to €12.40 after the bank has upgraded its recommendation on shares to “outperform” from “market perform” at KBW.

Cognis GmbH, the specialty chemicals company said first quarter revenues rose 10.6% to €728 million. Net profit for the quarter was €47 million compared to net loss of €33 million.

Conergy AG added 1.4% to €0.84 after the solar company was downgraded to “underweight” from “equal weight” at Barclays Capital.

EADS NV, the aerospace, defense and related services specialist rose 2.0% to €14.81.

Electricite de France SA rose 0.4% to €40.71.

Faiveley Transport SA, the railways industry rose 0.7% to €64.45.

GDF Suez SA, the natural gas and electricity supplier rose 1.0% to €27.76.

Kontron AG, the maker of miniature computers for slot machines and drone aircraft rose 0.8% to €7.52.

L''Oreal SA climbed 2.1% to €83.41 after the cosmetics maker signed an agreement to acquire Essie Cosmetics.

Manz Automation AG rose 1.6% to €59.47 after the German solar-cell maker was upgraded to “equal weight” from “underweight” at Barclays Capital.

Merck KGaA slipped 1.7% to €62.67 after the drug maker was downgraded to “sell” from “hold” at Citigroup Inc.

Q-Cells SE rose 0.07% to €7.59 after the solar company was downgraded to “underweight” from “equal weight” at Barclays Capital.

Siemens AG added 2.7% to €74.81 after a consortium that included Areva SA and the company won a contract in Slovakia.

TomTom NV increased 8.2% to €6.48 after the navigation equipment maker said first quarter revenue rose 26% to €268 million from €213 million a year ago. Net profit for the quarter was €3 million or €0.01 per diluted share compared to net loss of €37 million or €0.25 per share a year ago.

DAX Index Movers

RWE AG led the decliners in the DAX index of 0.88%, followed by decrease in Fresenius SE of 0.50%, in Fresenius Medical Care AG & Co. KGaA of 0.48%, in Merck KGaA of 0.38%, and in Volkswagen AG of 0.26%.

Siemens AG led gainers in the DAX index with a rise of 3.77%, followed by increase in Infineon Technologies AG of 3.08%, in MAN SE of 3.05%, in Deutsche Bank AG of 2.82%, and in Commerzbank AG of 2.65%.

CAC-40 Index Movers

Bouygues SA led the decliners in the CAC-40 index of 1.00%, in Suez Environnement SA of 0.50%, in France Telecom S.A. of 0.35%, in Credit Agricole SA of 0.29% and in Electricite de France SA of 0.22%.

ArcelorMittal gainers in the CAC-40 index with a rise of 3.21%, in BNP Paribas SA of 3.02%, in Lafarge S.A. of 2.73% in Schneider Electric SA of 2.60% and in Renault SA of 2.55%.