European Indexes Gain; Aegon Debt Repayment

Arthi Gupta
17 Aug, 2010
New York City

The European indexes gained on positive earnings. China holdings in U.S. Treasury notes fell for the second month. Euro-zone current account deficit narrowed in June. German economic sentiment fell. Aegon agreed to repay

[R]4:00 PM Frankfurt – The European indexes gained on positive earnings. China holdings in U.S. Treasury notes fell for the second month. Euro-zone current account deficit narrowed in June. German economic sentiment fell. Aegon agreed to repay €2 billion aid by the end of June 2011.[/R]

U.S. stocks climbed and Asian markets traded mixed. Swedish home prices rose in the May to July period. Spain’s industrial turnover and new orders growth slowed in June.

In Paris CAC 40 Index increased 41.64 or 1.16% to close at 3,639.34 and in Frankfurt DAX Index edged higher 69.67 or 1.14% to close at 6,180.24.

The U.S. government reported China’s holdings of Treasury notes and bonds declined by $21.2 billion in June to $839.7 billion. The report further stated total Chinese investment in U.S. debt fell 2.8% to $843.7 billion as against a 3.6% drop in May.

The euro-zone''s current account balance recorded a deficit of €4.6 billion in June, compared to the €7.4 billion deficit recorded in May, according to figures released by the European Central Bank today.

The goods account reported a €2.6 billion surplus in June as against the €2.9 billion surplus in May. The surplus in the services account narrowed to €2.2 billion from €3.3 billion.

On an unadjusted basis, the current account surplus was €1 billion in June compared to a shortfall of €17.9 billion in May.

The 12-month cumulated seasonally adjusted current account recorded a deficit of €45.1 billion in June compared with a deficit of €147.9 billion a year earlier.

German economic sentiment fell more than expected in August to a 16-month low. The Centre for European Economic Research said today that the economic sentiment indicator for Germany fell to 14 in August from 21.2 points recorded in July.

The German economy is set to expand further in the coming months supported by a sustained growth in private consumption expenditure, the Federal Ministry of Economics and Technology said today.

In its monthly report on the economic situation, the ministry noted that the economic sentiment in the industry remained upbeat as they expected a significant increase in backlogs during the months ahead. Economic expansion is expected to be backed by strong export growth, despite a slow-down in global economy.

Portugal''s jobless rate remained flat at 10.6% in the second quarter, same as in the previous quarter, according to a report released by the Statistics Portugal today. A year earlier, the jobless rate was 9.1%.

The number of unemployed persons declined to 589,800 in the first quarter, compared to 592,200 in the previous quarter.

Portuguese labor cost growth eased in the second quarter from the previous year. The average costs of labor rose 1.6% and number of hours worked grew 0.3%.

Swedish home prices increased in the May to July period compared to the previous three months, according to a report published by the Statistics Sweden today.

On an annual basis, home prices rose 7% in the May to July period. During the period, the average price for a one- or two-dwelling building in Sweden was SEK 1.996 million, the Statistics office said.

Spanish industrial turnover and new orders increased at a slower pace in June, according to a report by the National Institute of Statistics released today.

Industrial Turnover index increased 9% year-on-year in June compared to a 9.9% growth in May. However, the turnover increased for the sixth straight month. A year earlier, industrial turnover slipped 20.9%.

For the first six months of the year, industrial turnover increased 7.6% compared to the same period of the previous year.

Industrial new orders rose 10.7% on an annual basis in June, slower than a 12.4% growth in May. New orders increased for the seventh month in a row. A year earlier, new orders slipped 22.6%. In the January to June period, industrial new orders climbed 8.4% over a year ago.

Aegon N.V., the Dutch insurance company reported today that it is likely to get final approval from the European Commission regarding the €3 billion of capital support it obtained from the Dutch State in December 2008. The insurer already completed repayment of €1 billion to the State late last year.

The company said it will repay before the end of June 2011 the remaining €2 billion aid it received from the Dutch government.

Aegon said it will repay €500 million of the remaining amount owed to the Dutch State before the end of this month at a premium of 10.3% plus accrued interest of €11 million. It is also planning to repay the remaining €1.5 billion before the end of June 2011.

Gainers & Losers

Carlsberg rose 1.2% to DKK506.00 after the brewer raised its forecast for 2010 net income by 40%, better than previous expectations for a 20% rise. The company estimates operating profit to be DKK10 billion.

Revenue in the second quarter increased 2% to DKK18 billion. Net quarterly income surged 36% to DKK2.63 billion from DKK1.94 billion earned in the year-earlier period.

CIMPOR Cimentos de Portugal SGPS SA soared 4.4% to €4.68 after the Portuguese cement maker expects growth in the Brazil and Mediterranean countries.

Galenica AG gained 2.8% to Sfr435.00 after the Swiss drug wholesaler reported an increase in first half profit.

TrygVesta A/S fell 3.62% to DKK332.90 after the Denmark-based insurance company quarterly profit plummeted 82% after claims rose.

Wienerberger AG surged 9.2% to €10.59 after the brickmaker reported second quarter net income of €20.6 million compared with a loss of €151.5 million a year ago.