Investors in Europe Look Beyond Greece

Arthi Gupta, Mayank Mehta and Sanjay Barot
30 Apr, 2010
New York City

The euro gained as fears of Greece debt default receded for now and March unemployment hovered at 10%. Italy''s inflation rises in March. Polish insurer PZU SA raises $2.7 billion in a public offering, the largest in three years. Total''s first quarter profit up 14% on higher oil prices.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – The euro gained as fears of Greece debt default receded for now and March unemployment hovered at 10%. Italy''s PPI rises in March. Polish insurer PZU SA raises $2.7 billion in a public offering, the largest in three years. Total''s first quarter profit up 14% on higher oil prices. Metro AG first quarter sales rose 2%.[/R]

European stocks rose and the euro strengthened as an EU spokesman said an agreement on a three-year package may come as soon as tomorrow.

EU officials reassured the markets that a bailout package for cash-strapped Greece is on the way in an effort to keep the country''s debt contagion from spreading.

Greek officials aim to reach an agreement with the EU and the International Monetary Fund in coming days on budget cuts that may be worth €24 billion or $32 billion.

“Now, today, immediately, what is at stake is the survival of the nation,” Greek Prime Minister George Papandreou said in parliament in Athens today and added further, “This is the ‘red line.”

He said talks with the EU and International Monetary Fund were “tough,” with his government resisting “not in the street with rocks, but in negotiations.”

Papandreou’s budget cuts may include a three-year wage freeze for public workers and eliminating two of their fourteen annual salary payments, the ADEDY union said.

Germany''s finance minister said today that Berlin, which is expected to carry the brunt of the cost of helping Greece, could wrap up a law on the assistance package in a week, ahead of regional elections.

March seasonally adjusted unemployment rate was 10%, unchanged from February and increased from 9.1% in March a year ago. Unemployment compared to a year-ago month increased by 2.546 million in the EU27 and by 1.389 million in the euro area.

Annual inflation in the euro area estimated to 1.5% in April compared to a gain of 1.4% in March.

Italy''s total producer price index increased 0.5% month-on-month in March, taking the annual growth to 1.7%, statistical office Istat said Friday.

Domestic producer prices rose 0.5% on a monthly basis and 1.7% over a year earlier. Non-domestic PPI increased 0.4% compared to February and 1.6% versus last year.

During the period from January to March, total producer prices were up 1% compared with October to December. On an annual basis, prices were up 0.6%.

The euro gained 0.6% against the dollar to $1.3315.

The owners of Polish insurer PZU SA raised 8.1 billion zloty ($2.7 billion) in Europe’s biggest initial public offering since 2007.

The government and Dutch-based Eureko BV sold 25.8 million shares, or 30%, of Poland’s largest insurer to individual and institutional investors at 312.5 zloty apiece, PZU said in a regulatory statement yesterday.

The IPO is part of the government’s record asset-sale program aimed at raising as much as $10 billion to help finance the budget deficit and curb borrowing needs.

In London FTSE 100 Index closed lower 57.55 or 1.02% to 5,560.29, in Paris CAC 40 Index decreased 26.13 or 0.68% to close at 3,814.49, in Frankfurt DAX index lower 14.91 or 0.24% to close at 6,130.00. In Zurich trading SMI decreased 66.17 or 0.99% to close at 6,599.67.

Gainers & Losers

Altana AG, the maker of additives for coatings and plastic parts fell 1.7% to €16.55.

Dassault Systemes SA decreased 0.8% to €48.54 after the company shares downgraded to “hold” from “buy” at Deutsche Bank AG.

Manitou BF SA fell 0.8% to €13.24 after the crane and forklift manufacturer reported first-quarter revenue of €162 million.

MAN SE rose 2.4% to €71.99 after the company’s stock was upgraded to “buy” from “neutral” at Nomura Holdings Inc.

Metro AG fell 3.0% to €44.30. The trading and retail company said first quarter sales rose 2% to €15.5 billion from €15.2 billion a year ago. Net loss for the quarter was €16 million or €0.05 per diluted share compared to net loss of €98 million or €0.30 per share a year ago.

Michelin SCA rose 2.3% to €54.75 after the tiremaker said first quarter sales increased 12.2% to €3.94 billion from €3.51 billion a year ago.

Total SA fell 1.9% to €41.18. The integrated international oil and gas company said first quarter sales rose 25% to €37.6 billion from €30.0 billion a year ago. Net profit for the quarter rose 14% to €2.61 billion or €1.17 per diluted share compared to net profit of €2.29 billion or €1.02 per share a year ago.

DAX Index Movers

BASF SE led the decliners in the DAX index of 4.38%, followed by decrease Deutsche Bank AG of 3.68%, in Bayer AG of 2.75%, in Deutsche Post AG of 2.31%, and in Salzgitter AG of 2.22%.

Siemens AG led gainers in the DAX index with a rise of 1.68%, followed by increase in RWE AG of 1.47%, in MAN SE of 1.28%, in Linde AG of 1.16%, and in Deutsche Boerse AG of 1.10%.

CAC-40 Index Movers

ArcelorMittal led the decliners in the CAC-40 index of 3.12%, in Credit Agricole SA of 2.88%, in Total SA of 2.81%, in AXA of 2.52% and Technip of 2.32%.

Suez Environnement SA gainers in the CAC-40 index with a rise of 3.06%, in Michelin SCA of 2.45%, in Electricite de France SA of 2.13% in Cap Gemini SA of 2.08% and in Vallourec SA of 1.65%.