Greece Approves Austerity Bill; Safran Plunges 7.5%

Arthi Gupta
21 Oct, 2011
New York City

European indexes rebounded ahead of a weekend summit of European leaders. Greek lawmakers passed austerity measures amidst violent protests. Santander reached deal to raise $1.15 billion through stake sale in its U.S. subsidiary. Essilor quarterly revenue rose to

[R]1:30 PM Frankfurt – European indexes rebounded ahead of a weekend summit of European leaders. Greek lawmakers passed austerity measures amidst violent protests. Santander reached deal to raise $1.15 billion through stake sale in its U.S. subsidiary. Essilor quarterly revenue rose to €1.04 billion.[/R]

European indexes edged higher on optimism that regional leaders will agree on a plan to release $1.3 billion of funds and recapitalize banks.

France and Germany are still at odds in how to leverage the European Financial Stability Fund and called for a second meeting on Wednesday.

Greek lawmakers passed austerity measures in a final vote while demonstrators battled outside the parliament. The bill was passed by a 153-to-144 vote in the parliament.

In Paris, the CAC-40 Index gained 13.43 or 0.4% to 3,097.50 and for the week, the index slumped 3.7%.

In Frankfurt, the DAX Index edged higher 28.29 or 0.5% to 5,794.77. For the week, the DAX index declined 1.45%.

Euro Area Deficit to GDP Drops

The euro area government deficit to GDP fell to 6.2% in 2010 from 6.4% in 2009, according to Eurostat. The deficit to GDP in the EU27 dropped to 6.6% in 2010 from 6.9% in the prior year.

German Sentiment Drops

Germany''s business climate index fell to 106.4 in October from the revised 107.5 in September, according to the Munich-based IFO Institute.

Santander Reaches Deal

Banco Santander S.A., the Spanish bank said it reached a deal with private funds to sell 35% stake in its U.S. subsidiary, Santander Consumer USA Inc., to raise $1.15 billion in capital.

Under the investment agreement, Sponsor Auto Finance Holdings Series LP - an entity held by funds affiliated with Warburg Pincus, Kohlberg Kravis Roberts & Co. L.P. and Centerbridge Partners L.P. agreed to buy a 25% stake in Santander Consumer USA for $1 billion

Dundon DFS LLC, a limited liability company agreed to invest another $150 million for a 10% stake, while Grupo Santander''s stake in Santander Consumer USA will reduce to 65%.

Gainers & Losers

Alfa Laval AB fell 1.1% to SEK 113.40 after the Swedish engineering group said third quarter net sales increased 37%, excluding exchange rate variations, to SEK 7,571 million from SEK 5,811 million in the previous year. Net income in the quarter rose 2.9% to SEK 780 million or SEK 1.84 per share compared with SEK 758 million or SEK 1.78 per share in the year-ago period.

Essilor International SA rose 1.3% to €51.61 after the French manufacturer of corrective lenses reported third quarter total revenues grew 6.4% to €1.04 billion from €977 million a year ago, after a negative 3.3% currency effect.

Safran SA plunged 7.5% to €22.31 after the French aerospace supplier stated third quarter adjusted revenue climbed 5.2% to €2.73 billion from €2.59 billion reported a year ago. On a like-for-like basis, revenue increased 4.2%.

Scania AB climbed 2.7% to SEK 105.30 after the Swedish commercial vehicle manufacturer third quarter net sales climbed 14% to SEK 21.13 billion from SEK 18.56 billion in the same quarter last year. Net income in the quarter grew 2% to SEK 2.34 billion or SEK 2.88 per share from SEK 2.31 billion or SEK 2.93 per share in the prior-year quarter.

Sartorius Stedim Biotech SA soared 4.7% to €46.33 after the Germany-based international laboratory and process technology provider said for the nine-month period sales revenue rose 10.9% to €353.8 million from €319 million in the year-ago period.

Order intake for the nine-month period was €366 million versus €331.1 million a year earlier.