European Indexes Rebound; Holcim Surges

Mayank Mehta
20 Aug, 2009
New York City

Commodities rebound lifted markets indexes in Europe. Air Berlin completed its

[R]8:00PM Frankfurt, Paris; 2:00 PM New York – Commodities rebound lifted markets indexes in Europe. Air Berlin completed its €125 million bond offering. Holcim Ltd lifted its cost savings target to €600 million. German regulators raided Porsche offices to investigate securities laws violations. ThyssenKrupp sales fell 23%.[/R]

Stocks in Europe rebounded after commodities and energy prices increased and better than expected economic reports in the U.S. The UK budget deficit in July surged to record on rising expenses and falling revenues.

In London FTSE 100 Index closed higher 66.91 or 1.4% to 4,756.58, in Paris CAC 40 Index increased 54.98 or 1.6% to close at 3,505.32 and in Frankfurt DAX index higher 79.08 or 1.5% to close at 5,311.06. In Zurich trading SMI increased 51.26 or 0.9% to close at 6,032.05.

Gainers & Losers

Allianz SE the Europe’s insurer added 1.3% to €74.71.

Air Berlin Plc gained 3.6% to €3.68 after the second largest German carrier placed convertible bond of €125 million with institutional investors. The bond carries a coupon of 9% and with conversion price of €4.01. The airliner stock has declined 70% since it priced offering in 2006.

With the offering the carrier plans to lower the debt to €579 million from €779 million.

Air France-KLM increased 0.8% to €10.13 after it failed locate black for the flight AF 447 that crashed over the Atlantic after it departed from Brazil.

BASF SE rose 2.4% to €35.32 after the chemical company lowered the number of working staff at its main plant in Germany.

Daimler AG climbed 3.3% to €31.88

Deutsche Postbank AG the financial services provider surged as high as 6% and closed up 3.9% to €21.97 after UBS analyst recommended the stock.

Deutsche Bank AG rose 1.8% to €46.71 after the lender was upgraded to “buy” from “neutral” at UBS.

Heidelberger Druckmaschinen AG surged 3.8% to €5.78 on merger speculation in the media.

Hochtief AG climbed 6.4% to €52.20 after the Germany’s construction company won new contracts worth a combined total of €347 million in the USA and Australia. Deutsche Bank lifted the price target to €67 and upgraded rating to “buy.”

Lafarge SA increased 4.7% to €54.38 on the expectations that the cement maker will improve earnings as demand recovers.

Holcim Ltd surged 5.7% to CHF 69.20 after it lifted its cost savings target for the year to CHF 600 million from CHF 375 million after surpassing the previous target in less than six months.

MAN SE rose 2.6% to €48.28 on the optimism that the U.S. consumer is likely to be resilient and support the global economic rebound.

RWE AG gained 2.2% to €61.10 after its Polish subsidiary head anticipated market liberalization discussion to be concluded in the near term, according to the Wall Street Journal.

Salzgitter AG the German steelmaker climbed 2.0% to €67.48 after commodities prices inched higher.

ThyssenKrupp AG added 3.1% to €24.26 Germany’s biggest steelmaker reported a loss before taxes of €987 million compared to net profit a year ago on sales declined of 23% to €30.7 billion.

Total SA increased 2.5% to €38.75 after crude oil prices increased in New York and London trading.

Vinci SA increased 3.3% to €35.96 after Credit Suisse Group lifted its price target to €56.

Volkswagen AG the carmaker slumped 3.7% to €140.50 and Porsche SE declined 4% to €53.44 after the German authorities raided the company to search for securities laws violations and possible stock market manipulation.

Europe Markets Review

In London FTSE 100 Index closed higher 66.91 or 1.43% to 4,756.58, in Paris CAC 40 Index increased 54.98 or 1.59% to close at 3,505.32 and in Frankfurt DAX index higher 79.08 or 1.51% to close at 5,311.06. In Zurich trading SMI increased 51.26 or 0.86% to close at 6,032.05.

DAX Index Movers

Commerzbank AG led the decliners in the DAX index of 0.93% followed by losses in Deutsche Lufthansa AG of 0.38%, in Salzgitter AG of 0.36%, in Hannover Rue AG of 0.33%, in Merck KGaA of 0.32%.

Daimler AG led gainers in the DAX index with a rise of 2.65% followed by increase in METRO AG of 2.10%, in BASF SE of 2.02%, in MAN SE of 2.00%, in BMW AG of 1.88%.

CAC-40 Index Movers

Pernod Ricard SA led the decliners in the CAC-40 index of 1.56% followed by losses in AXA of 0.10%.

Renault SA gainers in the CAC-40 index with a rise of 5.21% followed by increase in Lafarge SA of 4.70%, in Alcatel-Lucent of 4.69%, in Michelin SCA of 3.36%, in Vinci SA of 3.29%.