Spain, France Yield Rise in Auctions; Audi Acquires Ducati

Arthi Gupta
19 Apr, 2012
New York City

The European indexes climbed after Spain and French sold debt at higher yields. Audi agreed to acquire Italian sports motorcycle manufacturer Ducati. Actelion, Akzo Nobel, and TeliaSonera quarterly net dropped.

[R]1:00 PM Frankfurt – The European indexes climbed after Spain and French sold debt at higher yields. Audi agreed to acquire Italian sports motorcycle manufacturer Ducati. Actelion, Akzo Nobel, and TeliaSonera quarterly net dropped.[/R]

The European indexes edged higher after the Spanish Treasury auctioned €2.54 billion in two- and 10-year bonds at higher yields. France sold €8 billion of two, three and five-year bonds today at higher borrowing costs.

Germany reaffirmed its forecast for a structural public deficit of less than 0.5% of gross domestic product this year. The total debt level is expected to fall from 82% of GDP this year to 73% in 2016.

Separately, the Italian government increased the budget deficit forecast for 2013 to 0.5% of gross domestic product from 0.1% previously.

In Paris trading, the CAC-40 Index gained 18.93 or 0.6% to 3,259.22 and in Frankfurt the DAX Index edged higher 21.17 or 0.3% to 6,753.50.

The yield on Spain’s benchmark 10 year bonds rose four basis points to 5.89% and the Italian bond yields climbed six basis points to 5.55%.

Spanish, French Bond Auctions

The Spanish Treasury auctioned €2.54 billion in two- and 10-year bonds at higher yields but meeting its maximum target of €2.5 billion.

The Treasury sold €1.425 billion in 10-year bonds at an average yield of 5.743% compared to 5.403% in the prior auction on January 19. The bid-to-cover ratio was 2.42 compared to 2.17 in the prior auction.

The Treasury issued €1.11 billion in two-year bonds at an average yield of 3.463% compared to 3.495% in the previous auction. The bid-to-cover ratio climbed to 3.3 compared to 2.0 in the last auction.

Separately, France sold €8 billion of two, three and five-year bonds today at higher borrowing costs.

The country’s debt-management agency, Agence France Tresor auctioned €2.7 billion of benchmark five-year debt at an average yield of 1.83% compared with 1.78% on March 15.

Italian Industrial Orders Drop

Italian industrial orders on a seasonally adjusted basis declined 2.5% from a month ago in February, data from the statistical office Istat showed.

Audi Acquires Ducati Motor

Volkswagen controlled Audi AG acquired Italian sports motorcycle manufacturer Ducati Motor Holding S.p.A. from Investindustrial SpA for undisclosed terms. Italian media reports suggested purchase price of about €860 million or $1.12 billion, including debt.

Gainers & Losers

Actelion Ltd. rose 1.2% to 32.61 francs after the Swiss pharmaceutical firm reported net revenue dropped 21% to 417.47 million francs from 528.23 million francs a year earlier. Net income for the quarter slumped 69% to 45.06 million francs or 38 cents per share from 146.29 million francs or 1.20 francs per share in the prior year.

Akzo Nobel N.V. climbed 0.6% to €43.40 after the paint and specialized chemicals maker reported first quarter revenue grew 6% to €3.972 billion from €3.762 billion the prior year. Net income in the quarter declined 47% to €70 million or 30 cents per share from €132 million or 57 cents per share last year.

Debenhams plc increased 1.8% to 81.95 pence after the British department store retailer reported first-half revenues grew 1.3% to £1.24 billion from £1.22 billion last year. Pre-tax profit for the period rose 1.4% to £127.1 million from £125.3 million last year.

Publicis Groupe SA slumped 3.6% to €38.67 after the French advertising firm said first quarter consolidated revenue rose 12.9% to €1.45 billion from €1.29 billion in the corresponding period in 2011.

SABMiller plc edged higher 0.2% to 2,620 pence after the British brewer said its organic lager volumes rose 3% year-on-year for both the full year and the fourth quarter.

TeliaSonera AB fell 2.2% to SEK 41.88 after the Swedish telecommunications firm reported first quarter net sales grew 3.5% to SEK 25.69 billion from SEK 24.84 billion last year. Net income in the quarter decreased 15.9% to SEK 3.91 billion or 90 cents per share from SEK 4.65 billion or SEL 1.04 per share a year ago quarter.