Telefonica

Arthi Gupta
28 Sep, 2010
New York City

The European indexes traded sideways after French consumer spending declined in August. German consumer sentiment surged in October. Sweden retail sales unchanged in August. Telef

[R]4:00 PM Frankfurt – The European indexes traded sideways after French consumer spending declined in August. German consumer sentiment surged in October. Sweden retail sales unchanged in August. Telefónica acquires the control of Vivo with the first payment of €4.5 billion to Portugal Telecom.[/R]

U.S. stocks advanced but Asian markets declined.

The central bank member Gertrude Tumpel-Gugerell said in a conference in Brussels on today that the much debated phasing-in and transition arrangements in the Basel III agreements are ''realistic.''

According to her, the agreed reform strikes the right balance between the overall objectives of strengthening the resilience of the financial sector.

In Paris CAC 40 Index gained 8.58 or 0.23% to close at 3,774.74 and in Frankfurt DAX Index edged higher 13.35 or 0.21% to close at 6,292.24.

Telefónica SA acquired 50% of the shares of Brasilcel, N.V., owned by Portugal Telecom SG SGPS, S.A. having made a first payment of €4.5 billion. The rest of the price will be satisfied under the schedule of payments, €1 billion on December 30 and €2 billion on October 31, 2011, although Portugal Telecom SG SGPS, S.A. will be able to request for this last payment to be executed on July 29, 2011.

Brasilcel, N. V. owns shares representing, approximately, 60% of the capital stock of the Brazilian company Vivo Participações, S.A. As a result of this acquisition, Telefónica achieved the control of Vivo Participações, S.A.

Media reports suggested ratings agency Moody''s may downgrade Spain''s Aaa credit rating in the next few days.

Moody''s had put Spain''s rating under review in July in light of the country''s bloated budget deficit and its weak economic performance. The agency said at the time that it would make a decision with regards to Spain''s credit rating within three months, and the deadline is due to expire this week.

Data from market research group GfK suggested German consumer confidence rose sharply in October. The forward-looking consumer sentiment indicator, based on a survey of about 2,000 Germans, increased to 4.9 in October from 4.1 in September.

French consumer spending declined more than forecast in August after rising at the fastest pace in seven years in July, statistics office Insee said today.

On a monthly basis, spending fell 1.6% in August following a 2.7% increase in July. On an annual basis, spending increased 1.2% in August.

In August, expenditures in durables decreased 0.9% after a growth of 0.4% in July. Car purchases declined 1.5% in August compared to a 1.6% decline in July.

Swedish retail sales remained unchanged in August, according to data released from Statistics Sweden today. This follows a 0.9% rise in July.

The retail trade sales volume increased 4.4% annually in August, as against the 2.2% growth seen in July.

Swiss private consumption strengthened in August. The UBS consumption indicator for Switzerland rose to 1.95 in August from 1.88 in July.

Hungary''s jobless rate for the three months to August was unchanged from the previous three-month period ended July, according to data from the Central Statistics Office published today.

The rate fell from 11.8% in the quarter ending April to 11% in the three-month period to July. A year ago, the jobless rate was 9.9%.

Growth in developing countries is estimated to reach 6.1% in 2010, 5.9% in 2011, and 6.1% in 2012. And, the growth in high-income countries is expected to be 2.3%, 2.4% and 2.6%. These diverging growth prospects continue in the medium term, the report said.

A new book by World Bank economists called ''The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World'' said almost half of global growth is currently coming from developing economies.

Gainers & Losers

Aegon N.V. gained 0.07% to €4.49 after the Dutch insurance company decided to close two of its businesses and to cut some senior management jobs in the UK, its key market, to reduce costs by 25% and to improve returns.

The company said it will close its third party pension administration and its employee benefits software businesses by the end of 2011, as it considers these businesses as not core to its future.

Sanofi-Aventis S.A. rose 0.20% to €50.11 after the pharmaceutical group agreed to buy VaxDesign, a Florida-based biotech group, for $60 million.

Technip S.A. edged higher 0.21% to €58.25 after the oilfield services contractor said it won a contract worth around €70 million from Total E&P U.K., as operator of the Islay gas field in the North Sea.

The Royal Bank of Scotland Group plc fell 1.21% to 48.22 pence after the banking and financial services group began the process of shedding a 500 back-office staff at its investment banking division to cut costs, according to media reports.

Valeo S.A. declined 0.01% to €33.33 after the industrial company estimates second-quarter sales to be significantly higher than previously forecast on a faster-than-expected production recovery in the auto sector.