Banks Rise in Europe; ING Divestments

123jump.com Staff
10 Apr, 2009
New York City

Banks in Europe closed higher on the back of positive sentiment in New York trading. Speculators were quick to tie the gain in earnings at Wells Fargo with the banking sector health and drove bank stocks higher. ING plans to divest as many as ten businesses to raise upto 8 billion euros.

[R]10:00 PM Frankfurt, 4:00 PM New York – A rise in banks lifted European market indexes. ING Group plans to raise 8 billion euros.[/R]

European markets gained for the fifth week in a row as investors lift interest rate sensitive stocks in today’s session. Better than expected earnings estimate from Wells Fargo lifted stocks of banks and financial services.

The speculators were quick to link the 50% rise in earnings at Wells Fargo with the possibility of stabilization in banking sector in the U.S. and Europe. Investors in Europe as in New York trading did not discriminate among banks. Most banks gained more than 8%.

HSBC ((HBC)) added 9%, UniCredit jumped 10% and ING Groep NV ((ING)) surged 18% to 6.2 euros after it prepared to raise as much as 8 billion euros through asset sale. Fortis added 6% to 1.42 euros and Aegon added 5.7% to 3.32 euros.

ING plans to sell between ten to fifteen businesses and raise between 6 billion and eight billion euros. The sale of ING Canada raised 1.4 billion euros.

Infineon Technologies AG surged 12% after UBS AG recommended the stock and said that the companies plan to raise capital are more than likely.

Hypo Real Estate Holding AG added 15% or 18 cents to 1.38 euros after the German government agreed to acquire the troubled lender.

The leading plastic pipes maker Wavin based in Holland reported first quarter revenue decline of 35% to 250 million euros and estimated operating earnings of 7 million euros compared to 37 million euros a in the quarter a year ago.

The company plans to improve its capital structure in the near future and cautioned that “recovery in the European market unlikely in 2009.” The company plans to raise capital and increase flexibility under its debt facilities.

Three days ago Wavin stock fell 23% and in today’s trading stock closed up 1 euro cent to 2.12 euros.

Gainers & Losers

On trading in NYSE Euronext of the European stocks, ING led gainers with a rise of 18% followed by gains in TF1 of 14%, in Solvay of 13.2%, in B.Espirto Santo of 10.1% and in JC Decaux SA and Arcelor Mittal of 9%.

GDF Suez led decliners in trading on NYSE Euronext with a loss of 4.4% followed by losses in Ahold and KPN of 3.2%, in Reed Elsevier and Delhaize Group of 2.3%. Unilever and EDF declined 1.7%.