Eurodollar Bonds Sales Rise; Total Cuts Capacity

Mayank Mehta
18 Sep, 2009
New York City

European government issued dollar denominated bonds as dollar weakens. The weekly issuance surged this week to $21.7 billion. German producer prices in August increased 0.5% on the rise in energy costs. Total SA workers threaten strike ahead of refinery capacity closure in France.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European government issued dollar denominated bonds as dollar weakens. The weekly issuance surged this week to $21.7 billion. German producer prices in August increased 0.5% on the rise in energy costs. Total SA workers threaten strike ahead of refinery capacity closure in France.[/R]

In London FTSE 100 Index closed higher 8.94 or 0.17% to 5,172.89, in Paris CAC 40 Index decreased 7.43 or 0.19% to close at 3,827.84, in Frankfurt DAX index lower 27.31 or 0.48% to close at 5,703.83. In Zurich trading SMI increased 7.43 or 0.12% to close at 6,325.15.

German producer prices index increased 0.5% in August after declining 1.5% in July according to the latest data from the Federal Statistics Office in Wiesbaden on 1.1% increase in energy costs. The index increased 0.3% excluding the energy cost.

European government and corporations took advantage of strong euro and issued dollar denominated bonds. The government issued bonds in the week surged to $10.4 billion with Germany issuing $4 billion followed by Austria, Spain and Belgium.

According to the Bloomberg data, the dollar denominated bonds from Europe increased to $358 billion so far in the year, 38% ahead of last year.

Gainers & Losers

Argan SA added 2.0% to €10.02 after the warehouse owner said that it has been selected by L''Oreal to develop and manage a logistical platform with low energy consumption.

Deutsche Lufthansa AG decreased 1.0% to €12.10 after the airline Chief Executive Carsten Spohr said that there are early signs of demand revival but it is too early to predict the sustained recovery.

DreamNex SA advanced 3.4% to €35.00 after the online retailer of adult- entertainment products said first-half net increased to €4.36 million.

EADS NV fell 1.7% to €15.94 after the company’s Airbus said it has increased its forecasts for long-term new plane demand but said the current industry crisis is likely to spark a spate of new order cancellations this winter and may need to cut manufacturing for the next two years.

K+S AG the potash maker decreased 1.0% to €39.89 and India plans to cut its imports of potash in the current fiscal year according to the agriculture ministry.

Lanxess AG the maker of butyl rubber for tires fell 1.0% to €23.37.

Mindscape SA plunged 10.4% to €10.4 after the video-game developer said that it has created a new subsidiary based in Romania dedicated to internet development projects. The stock also traded at a new low for the year.

Munich Re the reinsurer fell 0.2% to €104.

Groupe Promeo SA the real- estate developer surged 14.4% to €20.25.

Referencement.com SA decreased 7.6% to €3.38 after the Internet search marketing company said is planning to increase its capital by issuing between 223,578 and 231,831 shares at a price of €3.18 per share.

Siemens AG dropped 1.0% to €65.71 said that the fiscal third quarter revenues are higher than €18 billion and has terminated SAP maintenance contract.

Sodexo SA fell 2.4% to €40.71 after the catering company was downgraded to “reduce” from “add” at Natixis Securities.

TUI AG the tourism sector declined 0.7% to €6.95.

Total SA decreased 0.02% to €41.63 and workers union the Confederation General du Travail issued a statement that it is prepared to call for a strike if the company proceeds to sell or halt oil refining plants in France.

Europe is struggling with refining overcapacity as recession has lowered the demand and shrunk operating margins. Total is preparing to halt refining at Flanders, France plant as demand in the northwest of Europe slackens.

Volkswagen AG fell 2.0% to €118.89 said is considering an organizational overhaul of its truck business which could see a tie-up with German truckmaker MAN AG the Financial Times reported, citing people familiar with the company.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 4.33% followed by losses in Metro AG of 2.28%, in Deutsche Telekom AG of 1.33%, in Henkel AG & Co. of 1.33%, in BMW AG of 1.14%.

Deutsche Boerse AG led gainers in the DAX index with a rise of 4.69% followed by increase in Hannover Rueckversicherung AG of 3.33%, in Basf SE of 2.88%, in Commerzbank AG of 2.69%, in Allianz SE of 1.10%.

CAC-40 Index Movers

Renault SA led the decliners in the CAC-40 index of 3.53% followed by losses in Electricite de Strasbourg SA of 3.41%, in PSA Peugeot Citroen SA of 3.33%, in Michelin SCA of 2.68%, Accor SA of 2.32%.

Air France-KLM SA gainers in the CAC-40 index with a rise of 4.35% followed by gainers in Unibail-Rodamco SA of 3.60%, Credit Agricole SA of 2.97%, in Compagnie de Saint-Gobain SA of 1.82%, in Sanofi-Aventis of 1.72%.