European Indexes Rise; Heineken Plunges 13%

Arthi Gupta
24 Aug, 2011
New York City

European indexes traded higher and German business sentiment deteriorated in August. Denmark unveiled $2.1 billion stimulus package. Glencore bid for remaining stake in Australia-based Minara Resources. Accor swung to first-half profit.

[R]1:30 PM Frankfurt – European indexes traded higher and German business sentiment deteriorated in August. Denmark unveiled $2.1 billion stimulus package. Glencore bid for remaining stake in Australia-based Minara Resources. Accor swung to first-half profit.[/R]

European indexes edged higher but German business sentiment fell more than estimated in August.

The Danish Prime Minister Lars Lokke Rasmussen unveiled a stimulus package worth DKK 10.8 billion or $2.1 billion. The stimulus measures is expected to boost economic activity in 2012 and 2013 by about 0.3% that includes measures to support housing market activity and battle long-term unemployment.

Germany''s Finance Minister Wolfgang Schaeuble prepared a draft contract for the euro-zone rescue fund where the German Parliament would have no direct control on the functioning of the fund, German daily Handelsblatt reported on Wednesday.

Moody''s Investors Service downgraded Japan''s sovereign rating by one notch to ""Aa3"" from ""Aa2"", citing ""weak"" economic prospects but the outlook is stable.

Separately, Japan’s finance minister Yoshihiko Noda announced the setting up of a $100 billion facility to help domestic firms pursuing overseas acquisitions and purchasing energy resources.

In Paris, CAC-40 Index gained 15.04 to 0.49% to 3,099.41 and in Frankfurt DAX Index gained 49.30 or 0.89% to 5,581.68.

New industrial orders in the euro zone declined 0.7% on a monthly basis in June after a 3.6% increase in May.

German business sentiment deteriorated in August, according to a monthly survey from the Ifo institute released today. The economic climate index declined 4.2 points to 108.7 in August from 112.9 in July.

Glencore Bid for Remaining Stake in Minara

Glencore International Plc, the Swiss mining and commodities trader proposed to take over the remaining 27% stake, which it does not already own in Minara Resources Limited, the Australian cobalt and nickel producer.

The company offered A$0.87 a share in cash to Minara shareholders valuing Minara at A$1.02 billion.

Glencore International AG currently holds approximately 73% of the shares in Minara.

Gainers & Losers

Accor SA gained 1.30% to €23.42 after the French hotel group reported first-half revenues, as announced in July rose 4.4% to €2.97 billion from last year''s €2.85 billion after like-for-like revenues increased 5.8%. Net profit in the period was €41 million compared with a loss of €15 million in the same period a year earlier, driven by an improvement in occupancy and average room rates.

Heineken N.V. plunged 12.59% to €31.65 after the Dutch brewer reported first-half revenues increased 11% to €8.36 billion from €7.52 billion in the prior year. Profit for the period decreased 15.7% to €605 million or 1.02 euros per share from €700 million or 1.32 euros per share reported last year.

Nestlé S.A. rose 0.55% to Sfr49.71 after the food and nutrition company’s wholly owned subsidiary, Nestlé Holdings Inc. stated first-half net sales increased 7% to $9.78 billion from $9.14 billion in the comparable period. Net income for the period rose 2.1% to $444.88 million compared with $435.62 million in the prior-year period.