Portugal Raises

Arthi Gupta
12 Jan, 2011
New York City

The European indexes soared after Portugal bond auction raised

[R]4:00 PM Frankfurt – The European indexes soared after Portugal bond auction raised €1.25 billion. Euro-zone industrial output rose in November and German economy expanded in 2010. Airbus secured largest jet order of $15.6 billion from India-based IndiGo.[/R]

Portugal sold almost €1.25 billion in two bond auctions, with borrowing costs on its key 10-year bonds falling.

Portugal sold €599 million of 10-year bonds due in 2020 at an average yield of 6.72%, as against the 6.81% at the previous sale on November 10. However, the €650 million of bonds maturing in 2014 were sold for an average yield of 5.4%, compared with 4.04% in October. Investors bid for 2.6 times the bonds on offer, slightly less than in October.

European governments should embark on more """"rigorous fiscal consolidation"""" and pension reforms to strengthen economic recovery, the European Commission said its new annual growth survey.

Greek Finance Minister George Papanconstantinou told CNBC in an interview on Tuesday that spreads between Greek and German bonds were high because of broader market turbulence rather than a “real threat of default.”

Members of the Hungarian central bank's monetary council voted 4-1 to hike its key policy rate during its December meeting, minutes of the meeting showed on Wednesday.

In the five-member committee, central banker Ferenc Karvalits sought to keep the rate unchanged at 5.5%, while all the other members favored a 25-basis point hike.

In Paris CAC 40 Index gained 59.74 or 1.55% to close at 3,921.66 and in Frankfurt DAX Index edged higher 94.63 or 1.36% to close at 7,036.20.

Portugal's Inflation Accelerates

Inflation in Portugal accelerated to 2.5% in December from 2.3% in November, Statistics Portugal said today.

In another report, Portuguese economy may contract this year, depressed by weak domestic demand and tough government spending cuts, the central bank said in its economic bulletin released on Tuesday.

The bank forecasts 1.3% contraction this year, which will be followed by a 0.6% expansion in 2012. Last year, the economy grew 1.3%.

Euro-zone Industrial Output Rises

Euro-zone factory output rose 7.4% annually in November, following an upwardly revised 7.1% growth in October, the Luxembourg-based statistics office Eurostat said.

On a monthly basis, production increased 1.2% in November, after a 0.7% rise in October.

In the EU27, factory production grew 7.8% in November from last year, much faster than October's 6.9% rise. On a monthly basis, output advanced 1.4% in November, after a 0.4% growth in October.

German Economy Expands

The German economy expanded strongly in 2010, figures from the Federal Statistics Office showed on Wednesday aided by trade and investment.

The increase in the price-adjusted gross domestic product was 3.6%, the largest since German reunification, the statistics office said. In 2009, GDP plunged 4.7%. Upon calendar adjustment, the GDP growth rate was 3.5% in 2010 compared to prior year's 4.7% contraction.

French Current Account Deficit Widens

French current account deficit widened to €4.2 billion in November from a revised €2.8 billion in October, data released by Bank of France showed.

The trade deficit increased to €4.5 billion in November from €3.5 billion in October, while the surplus on services account fell to €0.2 billion in November from €0.7 billion in October. The deficit in current transfers remained unchanged at €2.2 billion in November.

Dutch Trade Surplus Increases/

Dutch trade surplus widened to €4.3 billion in November from €3.14 billion in October, the Central Bureau of Statistics said today.

Exports volume increased 9% annually in November compared to a 9.9% rise in October.

Imports recorded a 9.5% increase in November following a 15.9% growth in October. The value of exports rose 21.7% annually, while import value climbed 21.5%.

Italy Industrial Production Improves

Italian industrial production rose 1.1% on a monthly basis in November following a 0.1% increase in October, the country's statistics office said on Wednesday.

Manufacturing climbed 1.1%, while mining and quarrying climbed 1.3% in November.

On an annual basis, industrial production climbed 4.1% in November following a 2.9% increase in October.

Airbus Secures Record Order from India's IndiGo

Airbus, the aircraft manufacturer and a unit of European Aeronautic Defense and Space Co. signed on Tuesday the largest single firm order number for large jets in commercial aviation history, valued at about $15.6 billion at catalog prices.

IndiGo, the Indian budget airline signed a contract for the purchase of 180 eco-efficient Airbus A320 family aircraft, with 150 of them being A320neo's.

Airbus announced that IndiGo will become a launch customer for the A320neo, which will be available from 2016.

Orkla Inks Deal with China National BlueStar

Orkla ASA, the Norwegian consumer goods company agreed to sell its Elkem unit to China-based chemicals and new materials company China National BlueStar (Group) Co. Ltd. for $2 billion.

The transaction is expected to strengthen Bluestar's competitiveness in the silicone industry and broaden its footprint in adjacent markets.

Heineken Purchases Companies in Nigeria

Heineken N.V. purchased two holding companies from the Sona Group. The two acquired businesses have controlling interests in each of the Sona, IBBI, Benue, Life and Champion breweries in Nigeria. The transaction price has not been disclosed.

The acquisition provides Heineken with an additional technical capacity of 3.7 million hectolitres, helping to alleviate the company's current capacity constraints in the market and to improve the geographic location of its breweries.

Gainers & Losers

Barry Callebaut AG surged 6.78% to Sfr788.00 after the Switzerland-based producer of cocoa, chocolate and confectionery products said first quarter sales revenue rose 14.2% in local currencies.

Sales volume grew 5.6% to 383,222 tons from 362,973 tons prior year, driven by the Gourmet & Specialties Products business as well as the good performance of emerging markets and the Cocoa Products business.

Exiqon A/S fell 1.09% to DKK 9.10 after the Denmark-based company active in the pharmaceutical industry announced the launch of the second generation of miRCURY LNA microRNA Inhibitor libraries for genome-wide screening of microRNA function in human and mouse.

Imtech N.V. gained 1.74% to €26.89 after the Netherlands-based technical services provider said it received a large order from the German shipyard Meyer Werft in Papenburg for the energy efficient heating, ventilating and air conditioning technology on board of two new Norwegian Cruise Line cruise ships.

Sodexo SA slumped 3.06% to €51.59 after the global provider of services said revenues for the first quarter grew 10.5% from the previous year and organic revenue rose 4.7%.

Consolidated total revenues for the quarter increased 10.5% to €4.27 billion from €3.86 billion in the previous year, which includes a positive currency effect of 5.9%. On-site Service Solutions revenues were €4.11 billion, up 11% from last year, while Motivation Solutions revenues declined 1.1% to €164 million.

Software AG climbed 2.61% to €110.15 after the Germany-based company engaged in providing business infrastructure software said it exceeded its €1 billion revenue target in fiscal 2010, one year ahead of plan.