German PPI Drops; VW Plunges

Mayank Mehta
19 Aug, 2009
New York City

German producer prices declined the sharpest in July in six decades. The OECD reported flat economic growth in the second quarter in the 30-member nations. Air France pulled out of Czech Air bid. VW common shares dropped after Qatar agreed to pay lower price.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – German producer prices declined the sharpest in July in six decades. The OECD reported flat economic growth in the second quarter in the 30-member nations. Air France pulled out of Czech Air bid. VW common shares dropped after Qatar agreed to pay lower price.[/R]

German producer prices index in July dropped 7.8% from a year ago and declined 4.6% from June. The decline was sharpest since the Federal Statistics Office in Wiesbaden started collecting data in 1949.

Weak exports and rising euro dragged exports and inventory liquidation hurt the local demand in the period.

The Organization of Economic Cooperation and Development reported second quarter economic growth among 30 member nations was zero after dropping 2.1% in the first. The rise in economic activities in France, Germany and Japan lifted the overall average.

In London FTSE 100 Index closed higher 3.89 or 0.08% to 4,685.78, in Paris CAC 40 Index decreased 0.35 or 0.01% to close at 3,450.34 and in Frankfurt DAX index lower 18.76 or 0.36% to close at 5,231.98. In Zurich trading SMI decreased 27.04 or 0.45% to close at 5,980.79.

Gainers & Losers

Air France-KLM declined 1.7% to €9.84 after the largest European airline pulled out of the bidding for state-owned Czech Airlines on Wednesday citing weak business environment.

Arkema SA the French chemicals maker added 4.9% to €22.59 after Credit Suisse revised the stock rating and issued target price of €31.

Arcandor AG declined 3.2% to €0.300 after the tourism and retail group said creditor Valovis may lower interest rate after the administrator complained that they are too high.

Continental AG increased 1.7% to €26.54 extending the gains in the previous session after the ball bearing company Schaeffler Group renegotiated the debt of €12 billion and transfer €5 billion of which to the holding company.

Deutsche Bank AG fell 2.5% to €45.27.

France Telecom S.A fell 0.7% to €17.03 after the Egyptian telecom regulator confirmed that Ft plans to appeal the rejection of its third Mobinil bid that offered 237 Egyptian pound or $42.60 a share, according to the news reported by Bloomberg news.

Lowe AG increased 2.7% to €9.60 after the television maker targeted 2011 sale of €600 million.

New World Resources N.V. the coal producer said first-half sales fell 48% to €484.4 million from €927 million a year ago. Net loss for the first-half was €41.4 million compared to net profit of €189.1 million a year ago.

Phoenix Solar edged up 1.6% and Sky Deutschland edged down 3.2% after ratings were revised from Equinet and Credit Suisse respectively for both companies.

Sodexo SA decreased 1.0% to €36.72 after the food and facilities management services announced today that it has acquired 100% of Comfort Keepers one of the leading provider of non medical in-home services in North America.

VW ordinary share dropped 14% to €145.99 and preferred share increased 15% to €68.42 after Qatar sovereign fund agreed to pay €80 for common share and €63 for the preferred share. The news was reported by Manager-Magazin and several financial analysts in Frankfurt also confirmed the valuations.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 14.65% followed by losses in MAN SE of 1.67%, in Muenchener Rue AG of 1.45%, in Deutsche Bank AG of 1.32%, in Thyssenkrupp AG of 1.26%.

K+S AG led gainers in the DAX index with a rise of 3.23% followed by increase in Hannover Rue AG of 2.00%, in E.ON AG of 1.94%, in Fresenius SE of 1.20%, in RWE AG of 1.08%.

CAC-40 Index Movers

Vinci SA led the decliners in the CAC-40 index of 2.18% followed by losses in PSA Peugeot Citroen SA of 2.08%, in Alcatel-Lucent of 2.06%, in Vivendi SA of 1.65%, in STMicroelectronics SA of 1.39%.

GDF Suez SA gainers in the CAC-40 index with a rise of 2.55%, followed by increase in Credit Agricole SA of 2.49%, in Electricite de Strasbourg SA of 1.61%, in Sanofi-Aventis of 1.24%, in Essilor International, N.V. of 1.13%.