European Steelmakers Fall, Salzgitter Bonds

Mayank Mehta
29 Sep, 2009
New York City

European stocks traded mixed as investors digested mixed economic reports. TUI AG will offer additional loans to the troubled Hapag-Lloyd AG. Steelmakers declined after Salzgitter launched bond offering. ArcelorMittal made cautions remarks regarding economic recovery.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – European stocks traded mixed as investors digested mixed economic reports. TUI AG will offer additional loans to the troubled Hapag-Lloyd AG. Steelmakers declined after Salzgitter launched bond offering. ArcelorMittal made cautions remarks regarding economic recovery.[/R]

European markets traded sideways after the release of confidence data in the region and mixed economic reports in the U.S. Steelmakers declined after Salzgitter plans to increase capital through the sale of convertible bond offering.

In London FTSE 100 Index closed lower 5.98 or 0.12% to 5,159.72, in Paris CAC 40 Index decreased 10.90 or 0.28% to close at 3,814.10, in Frankfurt DAX index lower 22.79 or 0.40% to close at 5,713.52. In Zurich trading SMI increased 27.45 or 0.44% to close at 6,316.72.

German government with Hamburg city will provide loan guarantee to container shipping company Hapag-Lloyd AG. The parent TUI AG and the state and city governments will extend loan guarantee of 1.86 billion euros. TUI AG and the governments will offer additional 940 million euros of loans that were previously not committed according to Bloomberg News and confirmed by the German government officials.

Gainers & Losers

ArcelorMittal fell 1.9% to €25.80 after the steelmaker warned that growth in the industry will be slow and progressive as the world’s economy and interest in the industry picks up.

BNP Paribas SA added 2.4% to €57.97 after the bank launched a capital increase for €4.3 billion to reimburse the France early on its €5.1 billion capital advance.

Boiron SA climbed 0.6% to €24.61 after the homeopathic drugmaker was upgraded to “buy” from “add” at Gilbert Dupont.

Deutsche Postbank AG the financial services provider rose 0.7% to €24.18.

EADS NV slipped 1.3% to €14.94 after the defense contractor and Airbus plane maker cut its 2009 delivery target for A380s by one to 13 planes and said it was maintaining its delivery forecast for 2010.

E.ON AG the power and gas company fell 0.3% to €29.38.

Immofinanz AG a real estate company said first quarter rental income fell 2% to €134.6 million from €137.1 million a year ago. Net profit in the quarter was €100.9 million or 11 cents per diluted share compared to net loss of €96.7 million a year ago.

MTU Aero Engines Holdings AG decreased 3.4% to €32.60 after the engine maker was downgraded to “neutral” from “overweight” at HSBC.

Porsche Automobil Holding SE rose 2.0% to €52.76 after the company confirmed that Qatar Investment Authority is seeking representation on its supervisory board.

ProSiebenSat.1 Media AG the private broadcaster added 6.5% to €6.99.

Rougier SA the tropical-wood trader rose 1.4% to €24.50 after it reported first half loss of 12.8 million and estimated higher sales and earnings from 2010.

RWE AG fell 0.6% to €64.40.

Salzgitter AG declined 2.6% to €66.61 after the company plans to issue senior unsecured convertible bonds to raise €300 million with up to 3,550,792 underlying shares representing approximately 5.9% of the current outstanding shares.

ThyssenKrupp AG declined 1.5% to €23.70 after the steelmaker said is selling part of its civil shipyards as the economic downturn hits shipbuilders around the world. Company is selling the Emden shipyards on the North Sea coast to SIAG Schaaf Industrie AG.

Tognum AG the manufacture of diesel and gas engines advanced 0.7% to €11.55.

Trigano SA increased 5.2% to €14.30 after the maker of motor caravans and mobile homes said it plans to implement restructuring plan to meet current economic conditions.

The company plans to reduce its net debt to around €100 million representing an improvement of more than €50 million compared to the end of the previous quarter.

Volkswagen AG added 1.2% to €114.55 after the carmaker said the IG Metall union has struck a wage deal for 95,000 staff in six plants in Western Germany for 4.2% pay increase plus one-time payment.

Separately, Qatar Investment Authority board member Hussain Al-Abdulla said in an interview that the fund plans to increase its holding in Porsche SE and Volkswagen AG and seeking representation on supervisory board.

DAX Index Movers

Salzgitter AG led the decliners in the DAX index of 2.62% followed by losses in K+S AG of 2.39%, in Siemens AG of 2.31%, in RWE AG of 2.08%, in Man AG of 1.79%.

Infineon Technologies AG led gainers in the DAX index with a rise of 2.25% followed by increase in Volkswagen AG of 1.51%, in Metro AG of 0.99%, in Deutsche Bank AG of 0.77%, in Bayer AG of 0.58%.

CAC-40 Index Movers

Michelin SCA led the decliners in the CAC-40 index of 2.30% followed by losses in Danone SA of 2.07%, in Carrefour SA of 1.79%, in Alstom SA of 1.59%, STMicroelectronics N.V. of 1.57%.

Bnp Paribas SA gainers in the CAC-40 index with a rise of 2.35% followed by gainers in Essilor International SA of 1.73%, Societe Generale SA of 1.70%, in Dexia SA of 1.57%, in Electricite de Strasbourg SA of 1.22%.