European Markets Weak; CMA CGM Chief Resigns

Mayank Mehta
18 Dec, 2009
New York City

European indexes fell on the worries that higher loan losses linked to the commercial real estate will hurt banks. German business confidence index increased. Iliad SA was the fourth company to receive mobile telecom service license in France. CMA CGM SA founding chief executive agreed to resigned.

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – European markets edged lower on the worries that estimates of higher loan losses in the commercial real estate sector will hurt banks. German business confidence index increased. Iliad SA was the fourth company granted mobile wireless service license in France. CMA CGM SA founding chief executive resigned meeting a lenders condition.[/R]

The ECB revised its estimate of loan losses at banks in the euro-zone 13% to €553 billion for the period between 2007 and 2010. The central bank revised losses as the conditions in the property market have continued to weaken and thereby deteriorating the mortgage bonds and commercial mortgage backed securities.

In London FTSE 100 Index closed lower 20.80 or 0.40% to 5,196.81, in Paris CAC 40 Index decreased 36.38 or 0.95% to close at 3,794.44, in Frankfurt DAX index lower 13.23 or 0.23% to close at 5,831.21. In Zurich trading SMI decreased 24.91 or 0.38% to close at 6,464.32.

In the latest survey published by Ifo institute, the German business climate index increased to 94.7 from 93.9 in November. The rise in confidence was based higher exports and rising sales in the domestic market.

The Office for National Statistics said that the UK government budget gap in November surged 33% to £20.3 billion from £15.5 billion a year ago. The national debt is now over 60% of UK output, record since 1993.

Gainers & Losers

April Group SA, the insurance broker added 0.1% to €24.65.

Areva SA decreased 0.4% to €348.55 after the company’s transmission & distribution unit receives $400 million contract in Brazil for HVDC transmission link.

AXA SA decreased 1.6% to €23.24 after the National Australia Bank offered a higher bid for its Asia Pacific division trumping the bid offered by the company and its partner AMP in Australia. The NAB will retain the Australian and New Zealand operations and sell the rest of the Asia operations to AXA SA.

CMA CMG SA, the third largest container shipping fleet owner said its founding chief executive Jacques Saade will resign to meet a condition for new loans of as much as $500 million. The Marseille based shipper has $5.6 billion in debt according to several media reports in France.

Cimpro-Cimentos de Portugal SGPS SA surged 16% to €6.34 after Brazil based Companhia Siderurgica Nacional or CSN offered to acquire for €3.86 billion.

EADS NV added 0.1% to €12.95 and La Tribune said that the aerospace company is likely to lose its drone contract for German and French army worth €3 billion. French government is not sure that the defense company can deliver the equipment in time and meet its specification.

Eurazeo SA, the investment company fell 0.2% to €48.55.

GDF Suez SA advanced 1.6% to €29.25 after the natural-gas network was upgraded to “buy” from “neutral” at Nomura International Plc.

Iliad SA, the operator of Free cable, Internet and telecom operators was granted a mobile license to operate wireless communication services. The move is expected to shake up €25 billion mobile telecom market in France controlled by only three operators France Telecom, Bouygues and Vivendi.

Infineon Technologies AG climbed 0.8% to €3.49 after the maker of semiconductors was upgraded to “add” from “hold” at Commerzbank AG.

Orolia SA closed unchanged at €9.70 after the maker of electronic navigation equipment said the results of the issuance of 641,378 shares. The issue price was €9.25 per share. The shareholders of the preferential subscription rights could subscribe two new shares for every 11 shares earlier held.

SAP AG the business management software developer rose 1.4% to €32.00.

Total SA fell 1.4% to €43.31 after the oil producer was downgraded to “sell” from “neutral” at Goldman Sachs Group Inc.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 2.75%, followed by losses in Commerzbank AG of 2.30%, in Deutsche Bank AG of 1.65%, in BMW AG of 1.28%, and in Linde AG of 1.06%.

Infineon Technologies AG led gainers in the DAX index with a rise of 4.69% followed by increase in SAP AG of 2.14%, in E.ON AG of 1.44%, in Deutsche Boerse AG of 1.32%, and in Diamler AG of 1.22%.

CAC-40 Index Movers

Credit Agricole SA led the decliners in the CAC-40 index of 7.13%, followed by losses in Dexia SA of 7.07%, in PSA Peugeot Citroen S.A. of 3.01%, in Societe Generale SA of 2.53%, and in Renault SA of 2.48%.

Sanofi-Aventis gainers in the CAC-40 index with a rise of 2.36% followed by gainers in Unibail-Rodamco SA of 1.31%, in Accor SA of 0.90%, in Technip of 0.63%, and in Essilor International of 0.59%.