European Indexes Gain; ING Rises

Arthi Gupta
27 Aug, 2010
New York City

The European indexes gained and German import price inflation rose in July. Spanish retail sales fell in the month after VAT increase. Greek PPI slackened in July. ING Groep agreed to sell 50% stake of ING Summit to Canadian JV.

[R]4:00 PM Frankfurt – The European indexes gained and German import price inflation rose in July. Spanish retail sales fell in the month after VAT increase. Greek PPI slackened in July. ING Groep agreed to sell 50% stake of ING Summit to Canadian JV.[/R]

U.S. stocks gained and Asian markets traded mixed.

In Paris CAC 40 Index increased 19.35 or 0.56% to close at 3,494.38 and in Frankfurt DAX Index edged higher 24.50 or 0.41% to close at 5,937.08.

The eurocoin indicator fell for the fifth consecutive month in August, but the pace of decline eased, according to a report published from the Center for Economic Policy Research and the Bank of Italy today.

The indicator suggested the current economic situation in the euro area dropped to 0.37 in August from 0.40 recorded in July.

Germany''s import price inflation continued to rise in July, according to a report released by the Federal Statistics Office today.

The import price index rose 9.9% year-on-year in July as against 9.1% in June. Import prices increased for the seventh consecutive month.

Month-on-month, import prices fell 0.2% in July compared to a 0.9% rise in June.

The credit hurdle for German businesses reduced for the eighth successive month in August, according to figures released today.

The Ifo Institute said 29.5% of the surveyed firms assessed bank lending policies as restrictive in August, down from 31.6% in July. ""The credit awarding practices of the banks as a risk factor to the economic recovery in Germany is increasingly fading into the background,"" said Hans-Werner Sinn, Ifo President.

French manufacturers expect investment to rebound this year after easing in 2009, according to a survey report from the statistics office Insee released today.

The business leaders in the manufacturing industry expect their investment to rise 5% in 2010 compared to 2009. Business managers said their investment dropped 21% in 2009. They further added that their investment increased in the first half of 2010 over the second half of 2009,

Spanish retail sales plunged in July after the VAT increase was effective in July, according to official data published today.

The Statistics office INE said retail sales fell 2.2% in July compared to a 0.9% increase in June.

Greek producer price index rose 6.1% year-on-year in July as against a 6.5% increase in June, according to a report published by the statistics office today. On a monthly basis, the PPI fell 1.1% in July, compared to a 0.8% rise in June.

Switzerland’s KOF economic Institute said today that its economic barometer reached 2.18 in August from July''s revised 2.22.

The think tank suggested that the current upbeat pace of Swiss economic growth will continue throughout the next few months, but will not accelerate any further.

The Swedish budget balance in July showed a SEK 12.5 billion surplus, the National Financial Management Authority said today.

ING Groep N.V., the Dutch financial services firm agreed to sell its 50% stake in Canadian real estate investment fund ING Summit Industrial Fund LP to a joint venture between KingSett Capital and Alberta Investment Management Corp. Summit has a total transaction value of about C$2 billion, including assumed debt.

As part of the transaction, IIF has agreed to simultaneously sell its stake in Summit to KingSett/AIMCo. Consequently, ING''s indirect participation in Summit will end as well. Separately, ING has agreed to sell ING Real Estate Canada, the manager of Summit, to KingSett/AIMCo for an undisclosed amount.

The transaction, expected to close in the fourth quarter of 2010, will not have a material impact on ING Group''s results and capital ratios.

Subject to regulatory approvals, the deal is expected to close in the fourth quarter of 2010 and not to have a material impact on ING Group''s results and capital ratios.

Summit is a real estate investment fund that focuses on Canadian light industrial real estate. KingSett Capital is a private equity real estate investment business and AIMCo is an institutional investor.

Gainers & Losers

Banca Monte dei Paschi di Siena SpA soared 3.85% to €0.94 after the Italian lender said second quarter net profit more than tripled from the corresponding period last year, boosted by lower bad debt provisions and a rise in net commissions and interest income.

Banca Popolare di Milano Scarl plunged 4.19% to €3.43 after the mutual bank reported second quarter net profit slumped 62% to €20.1 million from €52.4 million a year earlier due to lower interest income and higher provisioning.

Carrefour S.A. gained 1.86% to €35.23 after the French retailer was upgraded to “buy” from “hold” at Citigroup.

Corio N.V. advanced 1.46% to €45.30 after the Dutch property group reported first-half net profit of €158 million compared with a net loss of €196.4 million in the corresponding period last year.

EADS NV plummeted 3.84% to €17.26 after the aerospace corporation reported the group''s Airbus unit cut production forecasts for its A350 airliner, according to the French newspaper Les Echos.

ING Groep N.V. edged higher 0.23% to $8.66 after the financial services firm agreed to sell its 50% stake in ING Summit Industrial Fund LP to a joint venture between KingSett Capital and Alberta Investment Management Corporation.

Roche Holding AG climbed 0.36% to Sfr137.60 after the Switzerland-based pharmaceuticals and diagnostics company’s request for a priority review of the group''s breast cancer drug trastuzumab-DM1 was rejected by the U.S. Food and Drug Administration.