Commerzbank Drops 7%, Carlsberg Soars 7.5%

Mayank Mehta
23 Feb, 2010
New York City

European market indexes and the euro traded lower. Commerzbank dropped 7% on higher than expected charges. Carlsberg A/S soared after it targeted higher operating margins. Lufthansa pilots return following court orders. Raiffeisen International dropped 12%.

[R]6:00 PM Frankfurt, 1:00 PM New York – European market indexes and the euro traded lower. Commerzbank dropped 7% on higher than expected charges. Carlsberg A/S soared after it targeted higher operating margins. Lufthansa pilots return following court orders. Raiffeisen International dropped 12%.[/R]

European markets traded lower after German business confidence index declined. The index tracked by Munich based Ifo Institute said its business climate index declined 95.2 in February from 95.8 in January.

The ASE index in Greece declined nearly 2% as investors and currency traders await details of bilateral agreement between Germany and Greece. Greek labor union demonstration forced trading on the burse to shift to an alternative location.

European Air Travel in Disarray

Europe is bracing for air travel disruption this week after airports at Frankfurt and Paris operate fewer than normal flights. More than half the 1,800 pilots returned to work today after court permitted talks through March 8 and put the strike on hold.

The airline canceled 800 flights yesterday and its spokeswoman Stotz said that normal flight operation may resume by Feb 26.

British Airways’ 12,000 cabin crew overwhelmingly voted in favor of walkout. More than 80% of votes were in favor of the strike and union leaders were given authority to call a strike at anytime they prefer.

Air traffic controllers in France struck today for four days according to a statement from Eric Heraud, spokesman for the French civil aviation or DGAC. The pilots are resisting a European Union directive to consolidate control centers under Single European Sky.

Europe Markets Review

In London FTSE 100 Index closed lower 36.98 or 0.69% to 5,315.09, in Paris CAC 40 Index decreased 49.64 or 1.32% to close at 3,707.06, in Frankfurt DAX index lower 84.37 or 1.48% to close at 5,604.07. In Zurich trading SMI decreased 38.32 or 0.57% to close at 6,649.09.

Stock Movers

Carlsberg A/S soared 7.5% to Kr 410 after annual sales increased 18% and operating profit excluding one-time items increased Kr 9.39 billion. Free cash flow increased to Kr 10.5 billion. The operating margin increased to 15.8% from 13.8% in 2008 and the company said it is targeting margins to increase to 20% between 2012 and 2015.

Commerzbank declined 7.4% to 6.01 euros after the German based bank reported fourth quarter net loss of 1.86 billion euros. The second largest lender reported trading loss of 561 million euros and a loss of 300 million euros linked to mono-line insurance in the quarter.

Chief Financial Officer Eric Strutz estimated loan loss provision in 2010 to decline to 3.8 billion euros from 4.2 billion euros in 2009.

Heineken increased 3% to 36.20 euros after the Dutch brewer reported 2009 net income before depreciation and one-time charges adjusted earnings of 1.02 billion euros.

Merck KGaA dropped 7% to 60 euros after it estimated fourth quarter core earnings of 95 euro cents and said it will trim dividend by 33%.

Raiffeisen International dropped 12% to 35.15 euros after the Austrian bank said it may merge with its majority shareholder, Raifffeisen Zentralbank Oesterreich AG. The bank did not disclose the timing and the price of merger.

DAX Index Movers

Merck KGaA led the decliners in the DAX index of 9.49%, followed by losses in Commerzbank AG of 4.57%, in Deutsche Bank AG of 3.32%, in ThyssenKrupp AG of 3.25%, and in Salzgitter AG of 2.64%.

Beiersdorf AG led gainers in the DAX index with a rise of 0.22%.

CAC-40 Index Movers

Renault SA led the decliners in the CAC-40 index of 4.23%, followed by losses in Credit Agricole SA of 3.23%, in STMicroelectronics N.V. of 3.17%, in Technip of 2.91% and in ArcelorMittal of 2.67%.

EADS NV gainers in the CAC-40 index with a rise of 1.18%.