France to Raise

123jump.com Staff
19 May, 2009
New York City

Banks in France and in Europe gained after the French agency launched

[R]9:00PM Frankfurt, Paris – Banks in France and in Europe gained after the French agency launched €20 billion program for its second round of capital injection. Air France KLM reported net loss. Drug wholesaler Celesio AG dropped 14% after it lost its appeal to build pharmacy chain in Europe.[/R]

Rising metals and energy prices, weak inflation and ongoing talks of stake sale in banks between the UK government and private investors supported a mild rise in indexes. Stocks in Paris, Frankfurt and Zurich closed higher.

The benchmark indexes lost most of their gains after the U.S. reported weak housing start data for April. The French government agency SPPE administering the capital injection in nation’s bank will raise €20 billion in multi currency commercial paper. The agency is preparing second round of capital injection in banks by acquiring preferred stocks or junior debt.

The ZEW Center for European Economic Research estimated that its index of investor expectations in April increased, indicating that economic recovery may lie ahead in six months.

In London, FTSE 100 Index closed higher 35.80 or 0.81% to 4,482.25. The British pound rose 1.3% to $1.55 and 0.4% to 1.36 euros. The gilt increased after the Bank of England completed its purchase of 3.5 billion pounds of bonds.

The consumer price index in April increased 2.3% from a year ago after increasing at 2.9% rate in March, according to the latest data released by the Office of National Statistics.

Gainers & Losers

Air France-KLM increased 5% to €10.14 after it reported net loss for the full year of €902 million and sales increased 0.4%.

Banks gained in European trading closed higher after interbank rates declined and talks of refunding of government funds at some of the leading U.S. banks bolstered confidence.

BNP Paribas gained 2.6% to €47.42 and Deutsche Bank increased 6.4% to €45.78 and Banco Santander increased 3.3% to €7.34. Societe Generale SA increased 3% to €38.35.

Bank of Ireland surged 24% to €1.33 after it reported 97% decline in earnings and proposed to buy back as much as one third of its debt at a discount.

Celesio AG dropped 14.5% to €16.11 after it lost its appeal to open a chain of pharmacy stores in Eurpe. The European Court of Justice affirmed the third party ban on pharmacies and said the decision regarding this lies with the member states.

Fonciere des Regions SA declined 13% to €48.80 after its largest shareholders began to sell 5% stake in the company.

ThyssenKrupp AG increased 5.2% to €17.26 and Salzgitter AG added 8% to €59.85 on the hopes if global economic revival and a rise in metals prices.

Earnings Review

Air France-KLM, Europe’s biggest airline said full-year sales rose 0.4% to €24.2 billion from €24.1 billion a year ago. Net loss in the year was €902 million compared to net profit of €748 million a year ago.

Bank of Ireland PLC, the country’s biggest lender said full-year net interest income rose 12.6% to €3.67 billion from €3.26 billion a year ago. Net profit in the year fell 97% to €59 million or €5.9 per diluted share compared to net profit of €1.69 billion or €174.6 per share a year ago.

Europe Markets Review

In London FTSE 100 Index closed higher 35.80 or 0.81% to 4,482.25, in Paris CAC 40 Index increased 29.57 or 0.91% to close at 3,274.96 and in Frankfurt DAX index higher 107.66 or 2.22% to close at 4,959.62. In Zurich trading SMI increased 63.68 or 1.17% to close at 5,498.80.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 2.18% followed by losses in Fresenius SE of 1.23%, in Fresenius Medical Care AG & Co. KGaA of 0.86%, in Deutsche Telekom AG of 0.83%, in Merck KGaA of 0.52%.

Salzgitter AG led gainers in the DAX index with a rise of 8.15% followed by gains in Deutsche Boerse AG of 5.66%, in Deutsche Bank AG of 5.19%, in Adidas AG of 4.72% and ThyssenKrupp AG of 4.67%, in Siemens AG of 4.32%.

CAC-40 Index Movers

Vivendi SA led the decliners in the CAC-40 index of 2.29% followed by losses in France Telecom S.A. of 1.89%, in EADS NV of 1.73%, in Pernod Ricard SA of 1.66%, Essilor International SA of 1.53%.

Lafarge S.A. gainers in the CAC-40 index with a rise of 7.13% followed by in ArcelorMittal of 6.45%, in PSA Peugeot Citroen S.A. of 5.60%, in Air France-KLM of 5.07% and in Compagnie de Saint-Gobain SA of 5.05%.