Greek Negotiations in Focus; Airbus, Cathay in $1.63 B Deal

Arthi Gupta
20 Jan, 2012
New York City

European markets struggled as investors focused on the difficult negotiations between Greece and international lenders. Hong Kong-based Cathay Pacific agreed to buy six Airbus aircraft for $1.628 billion. ThyssenKrupp said first quarter operating earnings are expected to be lower.

[R]1:00 PM Frankfurt – European markets struggled as investors focused on the difficult negotiations between Greece and international lenders. Hong Kong-based Cathay Pacific agreed to buy six Airbus aircraft for $1.628 billion. ThyssenKrupp said first quarter operating earnings are expected to be lower.[/R]

European markets traded lower today but in the week closed higher as nervous investors focused on the outcome of stalled talks between Greece and its international lenders.

Greece is looking to cut its debt load by €100 billion and offering a new security to bond holders that pays less than 4% but private lenders, mostly the hedge funds, are demanding higher interest rates and lower cut in the principal payment.

Greece needs to wrap up its discussion by next week to avail the next tranche of its €130 billion bailout from European lenders.

Greece needs an accord with bondholders as €14.5 billion bond payments fall due on March 20 to avoid a disorderly debt default that may spill over to Portugal and other nations.

Japanese Finance Minister Jun Azumi said that U.S. co-operation is needed to strengthen the International Monetary Fund and for the IMF to tackle the sovereign debt crisis. The minister further added that Japan is ready for talks over the IMF’s need for upgrading its resources to assist Europe.

""To strengthen the function of the IMF, American cooperation is necessary,"" Azumi said at a regular press conference following a Cabinet meeting.

In Paris trading, the CAC-40 Index declined 19.14 or 0.6% to 3,309.80 and in Frankfurt the DAX Index edged lower 29.91 or 0.5% to 6,386.20. For the week, the CAC-40 soared 3.5% and the DAX surged 4%.

Italian 10-year government bond yields fell three basis points to 6.34% and Spanish bond yield traded near 5.2%.

German PPI Drops

German producer price inflation on a monthly comparison dropped 0.4% in December following a 0.1% rise in November, according to data released by the Federal Statistics Office today.

Cathay Pacific Inks Deal with Airbus

Cathay Pacific Airways Ltd. entered into a purchase agreement with Airbus S.A.S., a unit of European Aeronautic Defence and Space Company, to purchase six Airbus A350-900 aircraft for a basic price of around $1.628 billion.

Gainers & Losers

AZZ incorporated fell 0.6% to $48.27 after the electrical equipment maker agreed to acquire Galvan Metals Inc.''s assets in Montreal, Canada.

For fiscal 2013, the company estimates earnings to be within $3.25 and $3.55 range per share, and revenues of $475 million to $510 million.

itelligence AG rose 0.2% to €6.814 after the full-service provider for SAP solutions said fourth quarter revenues grew 22.9% to €102.4 million from €83.3 million last year.

Operating earnings increased 19.7% to €9.1 million in the fourth quarter from €7.6 million in the previous year.

ThyssenKrupp AG dropped 2.5% to €20.42 after the Germany-based technology holding company estimates first quarter adjusted EBIT in 2012 to be significantly lower than last year,

WPP Plc dipped 0.1% to 747 pence after the global media communications services company‘s wholly-owned global public relations and public affairs firm, Burson-Marsteller agreed to acquire a majority equity stake in Viestintätoimisto Pohjoisranta Oy in Finland. Terms of the transaction have not been disclosed.

X5 Retail Group N.V. plunged 9.7% to $23.48 after Russia based retailer reported fourth quarter consolidated net retail sales grew 16% annually to 123.32 billion rubles or $3.96 billion. Comparable sales in the quarter fell 2% in local currency from the prior year.