European Indexes Higher; Ahold Sales Up 5.9%

Arthi Gupta
07 Jun, 2011
New York City

The European indexes edged higher after ratings agency revised its outlook on Hungary to stable from negative. VimpelCom acquired 90% of New Telephone Company. Finland-based Metso agreed to buy technology of Swiss Holzmag GmbH. Ahold quarterly profit rose 6.2% boosted by sales and margins.

[R]2:30 PM Frankfurt – The European indexes edged higher after ratings agency revised its outlook on Hungary to stable from negative. VimpelCom acquired 90% of New Telephone Company. Finland-based Metso agreed to buy technology of Swiss Holzmag GmbH. Ahold quarterly profit rose 6.2% boosted by sales and margins.[/R]

European markets edged lower after retail sales in the euro-zone increased in April and German factory orders rose in the month. The indexes gained a fraction as markets in Asia declined and in the U.S. fell for four days in a row.

U.S. indexes futures traded cautiously higher ahead of Federal Reserve Chairman Ben Bernanke''s speech later today. Asian markets traded lower after a decline in oil and metal prices.

The indexes in Europe gained after euro-zone retail sales rose 0.9% on a monthly basis in April compared to a 0.9% drop in March, data from Eurostat showed today.

Germany factory orders increased 2.8% on a monthly basis in April, following a 2.7% fall in March, the Federal Ministry of Economy and Technology said on Tuesday.

Portugal’s Prime minister in waiting Pedro Passos Coelho vowed to honor Lisbon''s €78 billion or $106 billion bailout deal with the EU and IMF.

""I want to guarantee to those who are watching us from abroad that Portugal does not intend to be a burden for the future to other countries that lent us the means that we needed today to face up to our responsibilities,"" he said.

""We will do everything possible to honor the agreement established between the Portuguese state, the European Union and the International Monetary Fund, to regain the confidence of markets.""

Fitch Ratings revised the outlook on Hungary''s long-term foreign and local currency Issuer Default Ratings to stable from negative and affirmed the ratings at ''BBB-'' and ''BBB'', respectively.

""The revision in the outlook to stable reflects the fiscal policy targets and measures announced by the Hungarian government in its Convergence and Structural Reform Programs in the spring that have increased confidence that the budget deficit will be reduced to below 3% of GDP by 2012 and the government debt ratio will be put on a sustained downwards path, easing downside risks to sovereign creditworthiness,"" said Ed Parker, Managing Director in Fitch''s Sovereign Group.

In Paris CAC-40 Index gained 11.52 or 0.30% to 3,875.24 and in Frankfurt DAX index edged higher 30.58 or 0.43% to 7,115.15.

VimpelCom Acquires 90% of NTC

VimpelCom Ltd. said its subsidiary OJSC VimpelCom acquired 90% of shares of OJSC New Telephone Company.

VimpelCom noted that it will launch a mandatory tender offer under Russian law to acquire the remaining 10% of the outstanding NTC shares.

The acquisition price for 100% of NTC shares is based on an enterprise value of $420 million.

Metso Buys Technology of Swiss Holzmag

Metso and Holzmag GmbH inked a contract pursuant to which Metso would acquire the technology of Swiss Holzmag GmbH for undisclosed terms.

Metso said this acquisition of technology rights strengthens its position as a service provider for the mechanical treatment of solid waste.

Gainers & Losers

BP Plc fell 1.55% to $43.94 after the international oil and gas company is looking to sell down about half of its 50% stake in its Russian joint venture TNK-BP to Russian state-run oil company OAO Rosneft, media reports suggest.

BHP Billiton declined 0.56% to $91.34 after the diversified natural resources company commenced producing oil from a new well in the Gulf of Mexico.

Clariant AG slumped 3.66% to Sfr18.16 after the specialty chemicals firm raised its 2011 sales target, aided by contribution from the newly acquired Süd-Chemie businesses as well as traditional businesses.

The company now estimates sales growth in the high single-digit range in local currency compared to 2010.

GDF Suez SA gained 0.92% to €24.55 after the French energy company agreed to sell its Italian natural-gas distribution network G6 Rete Gas to Axa Private Equity''s Infrastructure fund and F2i SGR SpA for €772 million.

Koninklijke Ahold N.V. dropped 1.45% to €9.61 after the Dutch supermarket chain operator reported first quarter net sales grew 5.9% to €9.25 billion from €8.74 billion in the prior year. Net income in the quarter increased 6.2% to €291 million or 0.25 euros per share from €274 million or 0.23 euros per share a year ago.