Active Trading in European Banks

123jump.com Staff
24 Mar, 2009
New York City

European markets closed higher for the second day on the optimistic view of the banking solution from the U.S. Treasury. Deutsche Bank and Credit Suisse gained but Societe Generale fell. Metro AG fell after it reported 7.1% rise in earnings for the year. S&P lowered its view on Lithuania.

[R]1:00PM New York, 6:00 Frankfurt – European indexes close higher in mixed trading. Metro AG fell after it reported weaker than expected earnings.[/R]

Europe’s main indexes closed higher in mixed trading with financials driving performance in Frankfurt but weighing down market gains in Paris.

Deutsche Bank AG and Credit Suisse Group AG rose after reversing last year’s losses in the first two months of the year.

In Paris, BNP Paribas and Societe Generale declined by more than 3% each.

Switzerland based Sulzer AG said an order backlog for coatings and machinery to Airbus SAS and Boeing Co., the world’s leading aircraft manufacturers will cushion it from the global recession that has hit its customers.

Carmakers fell in Frankfurt and Paris trading. Daimler declined on worries over the automakers weak financial strength.

The Euro weakened marginally to $1.3498.

Market Sentiment

In Frankfurt trading the DAX 30 Index gained 0.3% or 10.99 to 4,187.36.

Of the 30 DAX index shares, 19 rose, 10 fell and one traded unchanged.

Hannover Rueckversicherung AG led advancers with a gain of 7.9%, followed by gains in Commerzbank of 7.5%, in Merck KGAA of 3.2%, in Adidas of 3.2% and Deutsche Bank RG of 2.8%.

Carmaker Daimler AG led decliners with a loss of 4%, followed by losses in Metro AG of 3.3%, in Allianz SE REG of 3%, in Muenchener Rueckversicherungs AG of 3% and BMW of 1.1%.

In Paris trading the CAC 40 rose 0.2% to 2,874.39.

Alcatel-Lucent led advancers with a gain of 13.2%, followed by gains in ArcelorMittal of 7.6%, in Danone of 3.7%, in Carrefour of 2.8% and Air France-KLM of 2.5%.

ArcelorMittal, the largest steelmaker increased its convertible bond offering to 1.1 billion euros from the previous offering size of 750 million euros. The bond will yield between 7.25% and 7.75% and converts to equity if ArcelorMittal stock gains between 27% and 32% higher than the conversion price still to be determined.

ArcelorMittal cut its dividend in half after it reported fourth quarter loss of $2.63 billion on one-time charge of $4.4 billion related to inventories. Sales declined 21% to $22.1 billion.

BNP Paribas, France’s largest bank, led decliners with a loss of 5.1% followed by losses in PPR of 4.6%, in Societe Generale of 3.4%, in Renault of 3.3% and Accor of 2.4%.

European Manufacturing and Services Shrink

Markit Economics today reported that the service and manufacturing industries shrunk in March compared to a year earlier.

According to the research consultancy, the composite index for the service and manufacturing sectors compounded by surveying purchasing managers recovered to 37.6 percent from 36.2 percent in February.

S&P Cuts Lithuania’s Credit Rating

The rating agency S&P today cut the credit rating of Lithuania for the third time since last year from BBB+ to BBB, confirming that the recession is aggravating.

S&P painted a negative outlook for Lithuania’s economy on concern that the country’s fiscal and monetary mix was fragile. The economy contracted 2% in the fourth quarter and the downturn may persist until 2010.

Metro Fall on Earnings

Metro AG, German based discount retailer reported a declined o 2.7% in the fourth quarter to 691 million euros from 710 million euros a year ago. Sales in the fourth quarter rose 3.8% not adjusting for currency changes to 20 billion euros.

For the year 2008, group sales increased 5.9% after negative currency adjustments to 68 billion euros and sales in Germany were up 2%. International sales increased 8.5%. Sales rose 6.1% before the currency adjustments.

In the fourth quarter sales at Cash & Carry division rose 0.9% to 9.2 billion euros and same store sales declined 2.4% in the period. For the year sales rose 4.5% to 33.1 billion euros and same store sales gained 1.6%.

Earnings before interest and taxes for the year rose 7.1% to 2.2 billion euros after adjusting for one time charge of Real store network in Germany. Earnings per share increased 10% to 3.05 euros and net debt increased to 4.6 billion euros from a year ago of 4.3 billion euros.

Metro stock fell 83 euro cents or 3.3% to 24.45 euros at close in Frankfurt trading.