Euro Zone, IMF Set to Approve Greek Bailout; VW Sales Soar 26%

Arthi Gupta
12 Mar, 2012
New York City

European indexes traded mixed as the euro area finance ministers meet in Brussels to approve second bailout package for Greece. A

[R]2:00 PM Frankfurt – European indexes traded mixed as the euro area finance ministers meet in Brussels to approve second bailout package for Greece. Aéroports de Paris agreed to buy 38% stake in Turkey-based TAV for $874 million. Volkswagen fiscal 2011 revenue soared 26% to €159.3 billion.[/R]

European indexes traded mixed after China reported a wider trade deficit in February.

China''s trade deficit widened to $31.48 billion in February, the highest since 1989 as weak global demand dampened exports in February, while imports surged after the New Year holiday, data published by the General Administration of Customs showed on Saturday.

Imports surged 39.6% to $145.9 billion and exports increased 18.4% from a year ago to $114.5 billion in February.

Separately, Japan''s consumer confidence index slipped to 39.5 in February from 40 in January, a monthly survey data from the Cabinet Office showed today.

Traders are focused on the euro area finance ministers’ meeting in Brussels today that is set to approve the second bailout package for Greece. Fitch Ratings downgraded Greece to ''restricted default.''

Eurogroup President Jean-Claude Juncker said on Friday that the Eurogroup considers that the necessary conditions are in place to launch the relevant national procedures required for the final approval of the euro area''s contribution to the financing of the second Greek adjustment program.

Juncker further confirmed that Greece will activate the Collective Action Clauses applicable to bonds governed by Greek law.

The IMF Managing Director Christine Lagarde recommended a €28 billion arrangement under the Fund’s Extended Fund Facility to support Greece’s ambitious economic program over the next four years. The IMF Executive Board will review the proposal next week. The loan is a part of a €130 billion joint bailout package.

Fitch Ratings downgraded Greece to ''restricted default'' from ''C'' saying that the debt exchange constitutes a sovereign default event under the agency''s distressed debt exchange rating criteria.

In Paris trading, the CAC-40 Index fell 5.60 or 0.1% to 3,481.88 and in Frankfurt the DAX Index edged higher 7.88 or 0.1% to 6,888.18.

Italy’s 10-year yields rose three basis points to 4.86%. The Spanish 10-year bond yields gained four basis points to 5.05%.

German Wholesale Price Inflation Eases

German wholesale price annual inflation eased to 2.6% in February from 3% in January, the Federal Statistics Office said.

Aéroports de Paris to Buy Stake in TAV

Aéroports de Paris Management - a wholly owned subsidiary of Aéroports de Paris signed purchase agreements with Turkey based Akfen Holding A.S., Tepe Đnsaat Sanayi A.S. and Sera Yapı Endüstrisi ve Ticaret A.S. to purchase 38% of shares of TAV Havalimanlari Holding A.S. for a total consideration of $874 million and 49% stake in TAV Yatirim Holding for a consideration of $49 million.

Gainers & Losers

Aryzta AG rose 0.1% to Sfr45.70 after the Swiss baker reported for the six months ended January 31, group revenue rose 0.9% to €1.91 billion from €1.89 billion in the prior year. Net profit for the period plunged 56.3% to €71.86 million or 75.57 cents per share from €164.51 million or 193.55 cents per share in the prior year.

ElringKlinger AG plunged 9% to €22.19 after the gasket maker said fourth quarter preliminary sales revenue soared 28.7% to €269.6 million from €209.5 million in the previous year. Preliminary profit attributable to the company''s shareholders climbed 22.2% to €14.3 million or 23 cents per share compared with €11.7 million or 17 cents per share a year earlier.

France Telecom S.A. dropped 0.7% to €11.08 after France Telecom-Orange and Publicis Groupe announced they will partner with Iris Capital Management. Orange and Publicis Groupe will together contribute €150 million to the initiative.

Imtech N.V. dipped 0.1% to €24.72 after the technical services provider acquires the Turkish technical services provider AE Arma-Elektropanç.

Glencore International plc fell 0.2% to 408.05 pence after the Swiss mining and commodities trader offered £3.5 billion or $5.49 billion for Canada''s biggest grain handler Viterra Inc., according to a report in the Sunday Telegraph.

Volkswagen AG dropped 1.2% to €141.05 after the German automaker stated fiscal year 2011 sales revenue increased 25.6% to €159.3 billion from €126.9 billion the previous year. Consolidated operating profit rose to a record €11.3 billion, an improvement of €4.1 billion compared with 2010.