Greece in Political Deadlock, KPN Soars 19% on America Movil Offer

Arthi Gupta
08 May, 2012
New York City

The European indexes slumped as the Greek political deadlock continued. Greece sold

[R]1:00 PM Frankfurt – The European indexes slumped as the Greek political deadlock continued. Greece sold €1.3 billion of 6-month T-bills at higher yields. Adecco and Deutsche Post gained after better than expected earnings. Mexico based American Movil agreed to lift its stake in the Dutch telecom network operator KPN.[/R]

The European indexes declined as Greek leaders negotiate to form the next government. Greece is facing a difficult task to balance between the demands of the international lenders to cut spending and voters’ expectations of economic growth and a sharp cut in unemployment.

Greece’s New Democracy leader Antonis Samaras failed to reach an agreement to form a coalition government and the president invited Alexis Tsipras, the head of Syriza, the party with the second largest group of seats in the newly elected parliament.

However, Greece successfully completed its short term debt sale.

In the mixed earnings reports, Deutsche Post net soared 64% and Munich Re swung to profit but Statoil, Adecco, Koninklijke DSM and Telenor reported decline in quarterly earnings.

In Paris trading, the CAC-40 Index declined 56.32 or 1.8% to 3,158.14 and in Frankfurt the DAX Index edged lower 50.0 or 0.8% to 6,520.20.

The yield on Spain’s benchmark 10 year bonds rose three basis points to 5.75%, and the Italian bond yields gained two basis points to 5.58%.

Greek Bond Auction

Greece sold €1.3 billion of six-month T-bills today at an average yield of 4.69% compared to an average yield of 4.55% from a previous auction in April, the debt agency said.

The bid-cover ratio dipped to 2.6 from 2.62 in the April 10 auction.

Gainers & Losers

Adecco SA rose 2.5% to Sfr40.23 after the Swiss human resources firm reported first quarter group revenues grew 2% to €5.04 billion from €4.92 billion. Net income attributable to Adecco shareholders rose 12% to €112 million from €100 million last year. Earnings per share grew to 59 cents from 52 cents.

Deutsche Post AG climbed 0.7% to €14.36 after the postal and logistics group said first quarter revenues grew 4.3% to €13.36 billion from €12.8 billion in the first quarter of 2011. Consolidated net profit in the quarter surged 64% to €533 million and earnings per share grew 63% to 27 cents.

Koninklijke DSM NV fell 0.4% to €42.31 after the Netherlands-based chemical group said first quarter sales fell 2.6% to €2.29 billion from €2.35 billion in the year-ago quarter. Net profit in the quarter declined 12.7% to €145 million or 87 cents per share from €166 million or 98 cents per share in the prior year.

Koninklijke KPN NV surged 19.3% to €7.73 after the Mexico based America Movil S.A.B. DE offered €2.6 billion or $3.4 billion to increase its stake in the Dutch telecommunications firm.

Munich Re Group AG dropped 1.2% to €106.50 after the reinsurer reported first quarter consolidated profit attributable to Munich Re equity holders of €780 million compared to a loss of €947 million a year ago. Net earned premiums in the quarter grew 6.3% to €12.41 billion from €11.67 billion a year earlier.

Statoil ASA gained 0.9% to NOK 152.10 after the Norwegian energy firm reported first quarter total revenues and other income grew 29% to NOK 195.4 billion from NOK 151.9 billion in the prior-year quarter. Net income attributable to shareholders declined 5.4% to NOK 15.12 billion or NOK 4.74 per share from NOK 15.98 billion or NOK 5.01 per share reported last year.

Telenor ASA advanced 1.1% to NOK 103.80 after the Norway-based telecommunication company reported first quarter revenues rose 4.3% to NOK 25.12 billion compared with NOK 24.09 billion last year. Net income in the quarter plunged 79.1% to NOK 583 million from NOK 2.79 billion last year.

TOM TAILOR Holding AG dropped 2.1% to €13.36 after the German fashion designer stated first quarter sales grew 20% to €103.6 million from €86.3 million in the previous year. Net loss in the quarter widened 174% to €5.2 million or 29 cents per share compared to a loss of €1.9 million or 11 cents per share last year.