European Markets Flat; Deutsche Net Drops 76%, Shell Net Down 4%

Arthi Gupta
02 Feb, 2012
New York City

European markets traded mixed after France raised

[R]2:00 PM Frankfurt – European markets traded mixed after France raised €7.962 billion and Spain sold €4.56 billion of debt at auctions today at lower yields. Xstrata confirmed reports regarding a merger approach from Glencore. Deutsche net plunged 76% and Royal Dutch Shell net declined 4%.[/R]

European markets traded mixed after Royal Dutch Shell and Deutsche Bank reported earnings. France raised €7.962 billion and Spain sold €4.56 billion of debt at auctions today as borrowing costs fell.

In Paris trading, the CAC-40 Index gained 2.21 or 0.1% to 3,369.90 and in Frankfurt the DAX Index edged higher 12.08 or 0.2% to 6,628.70.

The Italian 10-year yield rose six basis points to 5.74% and Spain’s 10-year yields rose four basis points to 4.89%.

French Bond Auction

France sold €7.962 billion of six, eight and 10-year debt on lower borrowing costs, according to its debt management agency Agence France Tresor.

France sold €5.698 billion of benchmark 10-year debt due April 2022 at an average yield of 3.13%, down from 3.29% at the last auction of similar debt on January 5. The bid-to-cover ratio was 1.7.

The AFT also sold €1.011 billion of its October 2018 bond offering at an average yield of 2.44%, down from 3.27% the last time it was auctioned on March 8, 2011 at a bid-to-cover ratio of 4.3.

The agency sold €1.253 billion of its October 2020 bond at an average yield of 2.91%, down from 3.64% the last time it was auctioned on May 10, 2011 at a bid-to-cover ratio of 4.

Spanish Bond Auction

Spain successfully raised €4.56 billion from the sale of government bonds at an auction today as yields fell and above the targeted range between €3.5 billion and €4.5 billion.

The Spanish Treasury sold €2.52 billion of July 2015 debt at a yield of 2.861% compared to 3.384% at the previous auction last month. The bid to cover ratio was 1.63, down from 1.80 in the previous sale.

The Treasury also sold €984 million of October 2016 debt at a yield of 3.455% compared to 4.021% in the last month auction. The bid-to-cover ratio rose to 3.57 from 3.24 the last time around.

Another €1.05 billion of January 2017 bonds were issued at a yield of 3.565% compared to 5.544% in the previous auction in December. The bid to cover ratio was 2.70, the same as the last time around.

Spanish Jobless Rate Rises

Spain''s unemployment increased 4.01% or 177,470 to 4.6 million in January from the prior month, data released by the Labor Ministry showed today.

Spain has the highest jobless rate in the 17-nation currency bloc.

Xstrata Confirms Speculation

Xstrata Plc confirmed media speculation regarding a merger approach from Glencore International Plc.

The company said it is in talks with the Swiss commodity trader ""regarding an all share merger of equals which may or may not lead to an offer being made by Glencore for Xstrata."" The company added that there can be no certainty that any offer will be made.

Gainers & Losers

Deutsche Bank AG rose 1.5% to €33.52 after the German bank reported fourth quarter net revenues fell 7% to €6.9 billion, from €7.4 billion in 2010. Net income in the quarter plunged 76% to €147 million or 15 cents per share from €601 million or 63 cents per share in the prior year.

Net revenues for the full year 2011 increased 16% to €33.2 billion. Net income for the full year surged 87% to €4.3 billion compared to net income of €2.3 billion in 2010.

Electrolux AB gained 0.8% to 131 kronor after the Swedish appliance company reported fourth quarter net sales advanced 3% to 28.37 billion kronor from 27.56 billion kronor last year. Net income in the quarter fell 67.4% to 221 million kronor or 0.77 kronor per share from 677 million kronor or 2.38 kronor per share a year ago.

Novo Nordisk A/S soared 3.7% to DKK 705 after the healthcare company reported full-year 2011 sales climbed 9% to DKK 66.35 billion, from DKK 60.78 billion in the previous year. Net profit for the year rose 19% to DKK 17.1 billion or DKK 29.99 per share compared with DKK 14.4 billion or DKK 24.60 per share a year earlier.

Sartorius AG climbed 2.8% to €36.50 after the laboratory and process technology provider reported fiscal year 2011 consolidated sales revenue rose 11.2% to €733.1 million, from €659.3 million a year ago. Net profit for the year surged 32.2% to €51.5 million or €3.02 per share from €39.0 million or €2.29 per share in the 2010 period.

TeliaSonera AB fell 1.3% to 45.58 kronor after the Swedish telecommunications firm reported fourth quarter net sales grew 1% to 27.12 billion kronor from 26.85 billion kronor a year earlier. Net income in the quarter decreased 6.3% to 4.97 billion kronor or 1.15 kronor per share from 5.31 billion kronor or 1.18 kronor in the year-ago quarter.