French Industry Growth Stagnates; Statoil, Talisman JV of $1.3 B

Arthi Gupta
11 Oct, 2010
New York City

The European indexes rose on expectations that the U.S. Fed will increase asset purchases. French industry growth remained flat in August and Italian industrial production surged. Talisman and Statoil announced joint venture worth $1.3 billion in Eagle Ford Shale property.

[R]4:00 PM Frankfurt – The European indexes rose on expectations that the U.S. Fed will increase asset purchases. French industry growth remained flat in August and Italian industrial production surged. Talisman and Statoil announced joint venture worth $1.3 billion in Eagle Ford Shale property.[/R]

U.S. and Asian markets climbed on optimism that the U.S. Federal Reserve will issue fresh quantitative guidelines to ease the economic conditions. The loose monetary policy from the Fed is welcomed by the stock investors but currency markets are roiled as the dollar trades near lows against all major currencies.

Romania, the Czech Republic and Denmark’s inflation rose in September but August retail sales fell in Bulgaria.

In Paris CAC 40 Index increased 2.98 or 0.08% to close at 3,766.16 and in Frankfurt DAX Index edged higher 11.29 or 0.18% to close at 6,302.96.

The European Central Bank official Lorenzo Bini Smaghi was reported to say that the European and IMF officials are in discussion to extend Greece''s emergency support program.

Greece was forced to activate a €110 billion loan from the European Union and the IMF in the summer, after its borrowing costs surged to record levels following the disclosure that the country''s budget deficit was twice as big as previously thought.

French industrial production was flat in August, suggesting production activity had stagnated. Statistics office INSEE said industrial production recorded no growth in August following the 0.8% rise in July. Manufacturing also registered zero growth after increasing 1.2% in July.

On an annual basis, industrial production increased 4.7% and manufacturing output climbed 4.4% in August.

Romania''s consumer price index rose 7.8% annually in September, as against a 7.6% rise recorded in August. On a monthly basis, the CPI rose 0.56% in September, following a 0.23% rise in August.

Czech consumer prices rose 2% on an annual basis in September, compared to the 1.9% growth in August, the Czech Statistics Office said today. During the month, prices of food and non-alcoholic beverages rose 0.7% annually, while clothing and footwear prices fell 0.1%.

On a monthly basis, the consumer price index dropped 0.3% in September.

Danish annual consumer price inflation rose to 2.6% annually in September from 2.3% in August, Statistics Denmark said today. The price growth was largely driven by higher costs of gasoline and home furnishings, the statistics office said.

On a monthly basis, consumer prices increased 0.4% in September, due to higher prices of clothing.

Italian industrial production added 1.6% in August, as against the 0.3% growth recorded in July, statistics office Istat said today.

Production of capital goods increased 4.8% from July, while that of intermediate goods and consumer goods climbed 3.1% and 0.5% respectively in August.

On an annual basis, industrial production surged 9.5% in August, following the 5.6% rise in July.

Retail sales in Bulgaria, excluding trade in motor vehicles and motor cycles, declined a seasonally adjusted 0.3% on a monthly basis in August, compared to a 0.1% rise in July, the National Statistics Institute said today. Specialized stores'' sale of food, beverages and tobacco fell 0.6% on a monthly basis in August.

Annually, total retail sales, except trade in motor vehicles and motor cycles, dropped 4.3%, as against the 4.7% fall in July. Retail sales of automotive fuel in specialized stores fell 3.1% annually and sales in food, beverages and tobacco dropped 0.6%.

Czech central bank Governor Miroslav Singer said the exchange rate of Koruna is returning to its long-term nominal appreciation path and there is no reason to intervene.

The Czech National Bank intervened against the exchange rate only occasionally in the inflation targeting and managed float period, the central bank chief said in a presentation published on the central bank''s Web site.

Talisman Energy Inc., the Canada-based oil and gas company and Statoil ASA, an integrated energy company based in Norway have agreed on a joint-venture to acquire 97,000 net acres of Eagle Ford shale properties from Enduring Resources for a total consideration of $1.325 billion. The companies have agreed to create a 50/50 joint venture across the Eagle Ford shale play, with Talisman as the initial operator.

Furthermore, Statoil will acquire 50% of Talisman''s existing Eagle Ford acreage and production for $180 million. As a result, Statoil and Talisman will together hold 134,000 net Eagle Ford acres and associated assets and production in the joint venture.

Gainers & Losers

AB Electrolux surged 4.39% to SEK 175.90 after the producer of household appliances and appliances for personal use announced the signing of a preliminary agreement with Paradise Capital to acquire 52% of Olympic Group for Financial Investments S.A.E.

An Egyptian company that holds majority stakes in blue-chip companies and in small and medium enterprises, Electrolux will buy a majority stake in Olympic Group for around EGP 45.30 or $7.95 per share.

AstraZeneca Plc gained 0.7% to $52.24 after the British drugmaker announced that VIMOVO 500/20 mg modified-release tablets cleared a regulatory milestone by receiving positive agreement for approval in 23 countries across the European Union.

Autogrill S.p.A.rose 0.65% to €9.26 after the Italian catering giant agreed to sell its Alpha Flight Group unit to Dnata of Dubai for £100 million.

Compagnie de Saint-Gobain SA rose 1.60% to €33.88 after the mirror manufacturer announced in association with Hyundai Heavy Industries Co., Ltd., the building of a third high-efficiency PV panels facility in Korea.

This partnership of 50-50 joint-venture called Hyundai Avancis is the first manufacturing facility will be designed identically to the second Avancis plant currently under construction in Germany.

Daimler AG edged higher 1.25% to €46.01 after the German luxury carmaker said it is recalling about 85,000 Mercedes-Benz models in the U.S. because of potential steering problems.

Gamesa Corporacion Tecnologica SA plummeted 5.15% to €4.79 after the manufacturer of wind turbines was downgraded to “sell” from “neutral” by UBS AG.

GDF Suez S.A. increased 0.26% to €27.12 after the French utility signed a pact to supply 2.6 million tons of liquefied natural gas to the China National Offshore Oil Company.

Novartis AG climbed 0.80% to Sfr56.50.