Vivendi, Alstom, Deutsche Bank Rise

Mayank Mehta
01 Dec, 2009
New York City

European markets rebounded after Dubai World initiated debt restructuring talks. Deutsche Bank said its exposure to Dubai is manageable. Alstom S.A. and Schneider Electric SA enter into exclusive talks with AREVA for acquisition of Areva T&D. Vivendi agrees to sell its stake in NBC Universal to GE.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets rebounded after Dubai World initiated debt restructuring talks. Deutsche Bank said its exposure to Dubai is manageable. Alstom S.A. and Schneider Electric SA enter into exclusive negotiation with AREVA for acquisition of Areva T&D. Vivendi agrees to sell its stake in NBC Universal to GE.[/R]

European markets rebounded for the second day in a row after investors fears of Dubai led financial contagion receded. Crude oil and gold gained more than 1.3% as investors returned to metals and commodities markets. The prospect of debt restructuring dimmed the fear of wider contagion.

Global markets rebounded after Dubai World initiated talks to restructure less than half of $59 billion of loans. Investors’ fears of wider contagion involving Russia, Ireland and Greece for now are ebbing.

Dubai World said that restructuring talks with lenders are “constructive” and is seeking to delay the repayment of $26 billion of loans.

For now there appears to be no talks to reduce the debt burden and at least nine lenders are involved in direct talks. HSBC, Standard Chartered Plc, Royal Bank of Scotland and Barclays are among these banks.

Deutsche Bank increased 3.3% to €49.65 after a member of management board Juergen Fitschen said that losses from Dubai World loans are “manageable”, according to local media in Germany.

In London FTSE 100 Index closed higher 121.49 or 2.34% to 5,312.17, in Paris CAC 40 Index increased 95.59 or 2.60% to close at 3,775.74, in Frankfurt DAX index higher 150.66 or 2.68% to close at 5,776.61. In Zurich trading SMI increased 111.13 or 1.77% to close at 6,372.08.

Seasonally-adjusted unemployment rate was 9.8% in October 2009 the same as in September. The rate was 7.9% in October a year ago. Compared to October 2008 unemployment went up by 5.002 million in the EU27 and by 3.149 million in the euro area.

Gainers & Losers

Alstom SA the maker of high-speed trains added 5.6% to €49.24.

Allianz added 3.4% to €84.63 and analyst at Conning & Company said that the company is likely to earn net profit this year.

Bechtle AG increased 3.7% to €16.72 after the computer and software retailer was upgraded to “buy” from “underperform” at BofA Merrill Lynch Global Research.

Commerzbank AG increased 1.9% to €6.34.

Daimler AG increased 4.1% to €35.11 after its U.S. sales increase 19% to 16,796 in November.

Eiffage SA increased 6.0% to €38.33 after the construction company was upgraded to “outperform” from “underperform” at Exane BNP Paribas.

Heliad Equity Partners GmbH & Co closed unchanged at €3.95 after the German investment company said TIG Themis Industries Group planning a merger.

Loewe AG rose 5.2% to €9.10 after the television maker said that it has signed an agreement for acquiring a majority interest of at least 75% of the shares of the unlisted multimedia company MacroSystem Digital Video AG, Wetter (Ruhr).

Neovia Electronics SA the assembler of flat-screen televisions plunged 18.8% to €0.99.

Praktiker Bau und Heimwerkermaerkte Holding AG the home- improvement retailer rose 1.6% to €8.24.

Safran SA climbed 3.0% to €11.48 after the aircraft-engine maker was upgraded to “overweight” from “neutral” at HSBC.

Schneider Electric SA advanced 3.6% to €75.54 after the maker of circuit breakers said the Areva supervisory board announced that its decision to enter into exclusive negotiations with Alstom S.A. and the company for the acquisition of the activities of its transmission and distribution business, Areva T&D.

Trigano SA added 1.0% to €12.20 after the maker of recreational vehicles was upgraded to “hold” from “sell” at Berenberg Bank.

ThyssenKrupp increased 3.5% to 25.11 after a division of the company received a large order from Samsung Engineering Co Ltd for a fertilizer plant in Abu Dhabi according 123jump.com sources in UAE.

Vivendi SA climbed 3.0% to €19.77 after the music and telecom conglomerate and General Electric agreed to a deal that involves the stake sale in NBC Universal. GE agreed to pay $5.8 billion for 20% stake in NBC universal and sell the majority stake of 51% in the entire company to Comcast. General Electric also agreed to pay $2 billion in cash in case the stake sale to Comcast does not complete before the end of 2010.

Volkswagen AG the carmaker fell 0.7% to €81.43.

DAX Index Movers

MAN SE led the decliners in the DAX index of 4.73%, followed by losses in Volkswagen AG of 1.66%, in Deutsche Boerse AG of 0.93%.

K+S AG led gainers in the DAX index with a rise of 6.27% followed by increase in Henkel AG of 4.20%, in Deutsche Post AG of 3.13%, in Infineon Technologies AG of 3.13%, Diamler AG of 2.92%.

CAC-40 Index Movers

EADS NV led the decliners in the CAC-40 index of 2.22%.

Alstom SA gainers in the CAC-40 index with a rise of 6.72% followed by gainers in Bouygues SA of 5.52%, in Vinci SA of 4.93%, in Compagnie de Saint-Gobain SA of 4.90%, in Renault SA of 4.01%.