Portugal Bond Auction Raises

Arthi Gupta
09 Mar, 2011
New York City

The European indexes rose after German industrial production rebounded in January. Portugal completed 2-year bonds auction raising

[R]2:00 PM Frankfurt – The European indexes rose after German industrial production rebounded in January. Portugal completed 2-year bonds auction raising €1 billion. Greek jobless rate rose to record in December. Tognum proposed to review €3.2 billion bid from Daimler and Rolls-Royce. Hannover Re annual net rose.[/R]

European markets focused on the possible interest rate hike and growing unrest in the Middle East. Greek unemployment rose to a record high and Portugal sold debt at a higher yield. However, German industrial orders rose in January and Swiss inflation accelerated.

Portugal auctioned two-year bonds successfully today at the top end of the indicative offer but borrowing costs raised apprehensions of a bailout.

The Portuguese debt agency sold €1 billion or $1.39 billion of bonds on offer due September 2013. However, the average yield soared to 5.993% from 4.086% in an auction last September. The bid-to-cover ratio fell from 1.9 in the previous auction to 1.6.

In Paris CAC 40 Index gained 17.81 or 0.44% to close at 4,033.72 and in Frankfurt DAX Index edged higher 48.00 or 0.67% to close at 7,212.75.

EU27 Current Account Deficit Widens

EU27 external current account recorded a deficit of €30.4 billion in the fourth quarter of 2010 compared with a deficit of €4.9 billion in the quarter a year ago and a deficit of €19.7 billion in the third quarter of 2010.

German Industrial Output Rebounds

The seasonally and calendar-adjusted industrial production in Germany rose 1.8% on a monthly basis in January after a revised 0.6% fall in December, the Federal Ministry of Economics and Technology said today. The initial estimate for December showed a 1.5% fall.

Construction output surged 36.3% in January following a 24.2% contraction in December.

OECD Inflation Static

Inflation in the Organization for Economic Co-operation and Development area remained stable at 2.1% in January, according to data released on Tuesday.

During the month, energy prices rose 8.4% compared to last year, while food prices grew 2.6%, broadly unchanged from December.

Excluding food and energy, consumer prices rose 1.3% annually in January compared to 1.2% in December.

On a monthly basis, consumer prices in the OECD area rose 0.2% in January.

Czech Trade Surplus Soars, Inflation Rises

The Czech trade surplus rose more than estimated in January to CZK 15.7 billion from December''s CZK 570 million surplus, the Central Statistics Office said in a report on Wednesday.

The Czech Republic consumer price index increased 1.8% on an annual basis in February after January''s 1.7% rise, data from the Central Statistics Office showed today.

On a monthly basis, prices rose 0.1% in February as against January''s 0.7% gain. The latest increase was due to the rise in prices of food and nonalcoholic beverages, alcoholic beverages and tobacco, the agency said.

Swiss Annual Inflation Increases

Swiss annual inflation accelerated to 0.5% in February from 0.3% in January, the Federal Statistics Office reported on Wednesday.

Sweden Industrial Production Rebounds

Swedish industrial production increased by a seasonally adjusted 4.1% in January following a 2.1% drop in December, Statistics Sweden said on Wednesday.

Romanian Industrial Production Increases

Romania''s industrial production increased a working-day adjusted 10.6% annually in January, data released by the National Institute of Statistics showed on Wednesday.

Manufacturing output advanced 12.9%, while mining and quarrying production rose 0.6% in January.

On a monthly basis, factory output grew a seasonally-adjusted 1% in January. Manufacturing output rose 1.3%, while production in the mining and quarrying industry advanced 1.2% over the preceding month.

Greek Jobless Rate Up

The jobless rate rose in Greece notably to 14.8% in December for a sixth successive month from 13.9% in November, according to latest data released from the Hellenic Statistics Authority today.

The number of unemployed was 733,645 in December. This was 45.2% higher than a year ago and up 5.9% compared to November.

Tognum Considers Reviewing Offer from Daimler and Rolls-Royce JV

Tognum AG, the German engine maker said its management board will review the 24 euros per share acquisition offer made by a joint venture between Daimler AG and Rolls-Royce Group plc.

Earlier today, the German car maker and the British engine manufacturer confirmed their intention to form an equally owned joint venture, Siebte Vermoegensverwaltungsgesellschaft Zeus mbH, to launch a public tender offer to take over Tognum.

The venture’s offer price represents a total consideration of about €3.2 billion in cash or about $4.4 billion.

Nokia Siemens’ Acquisition of Motorola Network Assets on Hold

Nokia Siemens Networks, a joint venture between Nokia Corp. and Siemens AG said the acquisition of Motorola''s wireless networks infrastructure assets is still pending anti-trust approval from the Chinese regulatory authorities.

The deal closure will not be completed in the first quarter of 2011 as previously targeted.

Gainers & Losers

BioMerieux SA fell 1.82% to €76.58 after the maker of HIV and hepatitis tests set an annual sales growth target of about 7% to 9% at constant exchange rates between 2010 and 2015.

E.ON AG dropped 0.82% to €22.92 after the power and gas utility reported full year 2010 sales surged 16% to €92.86 billion from €79.97 billion in the preceding year. Net income for the year declined 31% to €5.85 billion or 3.07 euros per share from €8.42 billion or 4.42 euros per share in the prior year.

European Aeronautic Defence and Space Company NV surged 3.30% to €20.50 after the aerospace and defense giant reported fourth quarter revenues grew 8% to €14.2 billion from €13.1 billion in the same quarter last year. Net income generated in the quarter was 355 million euros or 0.44 euros per share compared to a loss of 1.05 billion euros or 1.30 per share in the prior year.

Hannover Rückversicherung AG gained 1.49% to €41.78 after the reinsurer said fiscal year 2010 IFRS group net income rose 2.1% to €748.9 million from €733.7 million last year. Earnings per share were 6.21 euros, up from 6.08 euros in the prior year.

Gross written premium for the period increased 11.2% to €11.43 billion as against €10.27 billion a year ago.

The company proposed to increase 2010 dividend by 0.20 euros from last year to 2.30 euros per share.

Novartis AG declined 1.26% to $55.48 after the advisory panel of the Food and Drug Administration declined to endorse the highest proposed dose of the pharmaceutical company''s new lung drug called indacaterol, but backed approval of the drug at a lower dose.

Symrise AG surged 5.03% to €20.26 after the Germany-based fragrances and flavors manufacturer reported fiscal year 2010 sales grew 15.4% to €1.57 billion from €1.36 billion a year earlier. For the full year, net income increased 58.4% to €133.5 million or 1.13 euros per share from €84.3 million or 0.71 euros per share a year ago.