European Indexes Rise; Glencore Acquires Viterra for C$6.1 B

Arthi Gupta
21 Mar, 2012
New York City

European indexes gained. German yield rose and Portuguese yields fell after successful bond auctions today. The UK policymakers split on quantitative easing but were unanimous in holding interest rates. Glencore agreed to acquire Canada-based Viterra for C$6.1 billion.

[R]3:00 PM Frankfurt – European indexes gained. German yield rose and Portuguese yields fell after successful bond auctions today. The UK policymakers split on quantitative easing but were unanimous in holding interest rates. Glencore agreed to acquire Canada-based Viterra for C$6.1 billion.[/R]

European indexes rose after the Greek parliament approved the €130 billion bailout with 213 lawmakers voting in favor and 79 against it.

The Bank of England policymakers retained its quantitative easing unchanged at £325 billion through a split vote as two members, David Miles and Adam Posen, sought a £25 billion increase in the program, the minutes of the meeting showed today.

However, all members voted to retain a record low 0.5% interest rate at the meeting held on March 7 and 8.

German leading economic index rose in January.

In Paris trading, the CAC-40 Index rose 3.84 or 0.1% to 3,534.79 and in Frankfurt the DAX Index edged higher 12.55 or 0.2% to 7,067.37.

Italian 10-year yields were at 4.92%. The equivalent Spanish yield climbed 2.3 basis points to 5.27%.

German, Portuguese Bond Sale

Germany sold €5 billion of 0.25 percent notes due in March 2014 at an average yield of 0.31% compared with 0.25% at the last auction on February 22. The bid-to-cover ratio was 1.8, the same as the previous sale.

Portugal sold €1.61 billion of March 22 2013 Treasury bills at an average yield of 3.652%, down from 4.943% at the previous auction on February 15. The bid-to-cover ratio was 2.5 compared with 2.02 last month.

The nation also sold €382 million of July 20 2012 Treasury bills at an average yield of 2.168% compared to 3.845% in the last auction. The bid-to-cover ratio was 6.7.

German Leading Index Climbs

Germany''s leading economic indicator increased 0.3% to 103.8 in January compared to the 0.7% growth recorded in December, data from a survey by the Conference Board showed today.

The coincident economic index, which measures the current economic situation, rose 0.3% to 106.8 in January.

Glencore to Acquire Viterra

Glencore International plc, the Switerland based commodities giant agreed to acquire Canada based grain storage provider Viterra, Inc. for C$16.25 a share in cash or C$6.1 billion.

The offer price represents a 48% premium to Viterra''s closing share price of C$10.98 on the Toronto Stock Exchange on March 8, the day prior to Viterra announcement that it had received expressions of interest regarding a potential deal.

Gainers & Losers

Brenntag AG dipped 0.01% to €86.92 after the German chemical distribution company reported fiscal year 2011 sales increased 13.5% from a year ago to €8.69 billion. Profit for the year soared 93.2% to €277.4 million or €5.39 per share compared to €143.6 million or €2.93 in 2010.

Flughafen Wien AG soared 3% to €28.06 after the Vienna International Airport operator reported full-year 2011 total revenue grew 9% from a year ago to €582.0 million. Net profit in the period slumped 58.3% to €31.6 million from €75.7 million in the previous year.

Industria de Diseno Textil, S.A. climbed 0.2% to €71.88 after the Spanish textile company reported fiscal year 2011 net sales rose 10% from a year ago to €13.8 billion. Profit for the year increased 11.6% to €1.93 billion from €1.73 billion a year ago.

J Sainsbury plc increased 3.1% to 314.90 pence after the food retailer reported that its fourth quarter total sales grew 4.6%, and up 5.1%, excluding fuel. Like-for-like sales for the quarter increased 2.5% and rose 2.6% excluding fuel.

Royal Dutch Shell plc fell 0.2% to 2,233.50 pence after the oil and gas explorer signed a production sharing contract with China National Petroleum Corporation for shale gas exploration, development and production in the Fushun-Yongchuan block in the Sichuan Basin, China.

Tom Tailor Holding AG slumped 3.8% to €14.28 after the Germany-based fashion company said full-year 2011 sales rose 18.4% annually to €411.6 million. Net income for the period quadrupled to €10 million or 59 cents per share from €2.4 million or 15 cents per share a year ago.