A roundup of Wednesday's action on major European exchanges
The FTSE 100 finished Wednesday's session with minimal gains, as Wall Street saw shaky trading ahead of Friday expiries. News of a US$5 billion Chinese investment in Morgan Stanley overshadowed the company's total writedown of US$9.4 billion in fourth quarter and talk that Merrill could also unveil between US$3bln and US$6bln of further losses. At home, the BoE minutes showed the MPC decided unanimously to cut rates at its last meeting, citing downside risks to activity and inflation in the medium-term. On the London trading floor, SPORTS DIRECT (+19.88%) skyrocketed despite poor interims as Mike Ashley said he would not take the company private. also the group gave a better-than-expected outlook. NORTHERN ROCK (+4.37%) continued to make headlines after a report that BRADFORD & BINGLEY (+2.33%) was interested in buying some of the assets of the troubled group. BIFFA (+6.53%) granted due diligence to potential bidders, Montagu Private Equity and Hg Pooled Management. 3I (+2.33%) is said to be no longer interested in buying all of Spain's Dermoestetica, but instead just wants its UK unit. COBHAM (+2.24%) said group op profit in 11M was ahead of the prior year, despite currency headwind. WOOD GROUP (-2.67%) said global markets remain strong and expects fiscal group EBITA to be ahead of market expectations. IMI (-6.57%) slumped after saying severe shipment will be flat. ABBOT GRP (+13.62%) surged after agreeing to a £3.9/sh takeover.
The CAC 40 (-0.22%) finally closed the session in the red with Wall Street also trading in negative territory amid bad results from Morgan Stanley, which unveiled fourth quarter write-downs of US$9.4 billion. Of local note, VINCI (-3.06%) was the main loser. The rest of the construction sector was also weak: BOUYGUES (-1.95%), SAINT GOBAIN (-1.61%). PSA (-2.27%) recalled 18,000 C3 and Xsara Picasso vehicles in Brazil for a brake-light flaw. EADS (-1.29%) has selected LATECOERE (susp.) as its preferred bidder for two Airbus plants in France. Investment in French offices, shops and warehouses will fall 'substantially' in 2008 from a record this year, according to real estate broker Atisreal, Bloomberg reported: UNIBAIL RODAMCO (-1.45%). The French government may fine EDF (-0.73%) for poor quality service, La Tribune wrote. Defensive stocks DANONE (+1.33%) and CARREFOUR (+0.53%) gained. In the wider market, THALES (-0.42%) has been fined €610,000 by the French competition regulator for 'anticompetitive practices' in tenders for public procurement in aerial navigation. REXEL (+2.70%) confirmed it will go ahead with its €4.85 per share bid for Hagemeyer. In broker news, Cheuvreux added VIVENDI (-0.03%) to its selected list and SocGen downgraded NORBERT DENTRESSANGLE (-8.01%) to sell.
Xetra-Dax closed a touch below breakeven as the Ifo business sentiment survey undershot expectations for December. Equity markets saw volatility on Wednesday, in face of some end-of-year portfolio adjusting, and ahead of Friday's expiries. Key for the auto sector, the EU disclosed its plans on cutting CO2 emissions, with hefty fines for manufacturers that don't comply. BMW (-1.08%), for one, said the plans distort the market, as they favor makers of smaller cars, and need to be improved. In other news: DEUTSCHE BANK (-0.32%) is paying Enron creditors US$25 million to settle a lawsuit. LINDE (-0.85%) has set up a joint venture with state-owned oil company Adnoc in Abu Dhabi. AXEL SPRINGER (+2.17%) sees an up to €620 million writedown for PIN Group, having been unable to find a viable financing plan for the loss-making mail services company. On the earnings front, NORDDEUTSCHE AFFINERIE (-3.89%) reported 2006/07 EBIT of €260 million, up 134% year-over-year, on sales of €6.47 billion, up 12% year-over-year. Net profit jumped 164% to €159 million. The copper refiner said while it sees good results next year, it would be hard to reach this year's level. The broker action included Deutsche raising its target on LANXESS (+1.74%) and JP Morgan lifting its price objective on DEMAG CRANES (+6.23%). WestLB downgraded HEIDELCEMENT (-2.57%) to add and DYCKERHOFF (+0.47%) to reduce.
The AEX (-0.02%) closed flat, with Wall Street trading moderately lower after Morgan Stanley revealed that China Investment Corp. invested US$5 billion in the American bank, but also unveiled a fourth quarter write-down of US$9.4 billion. Back home, ING (-1.44%) and FORTIS (-1.01%) fell. PHILIPS (+1.33%) announced a new €5 billion buyback program, to be completed over the next two years. The repurchased shares will be cancelled. This follows an amendment to Dutch tax law passed last night that Philips CEO Gerard Kleisterlee has described as 'more investor friendly'. Back among blue chips, Rexel confirmed it is going ahead with its €4.85 per share bid for HAGEMEYER (+1.31%). Further festive cheer from TOMTOM (+3.89%), with CEO Harold Goddijn saying in an interview with Bloomberg that US market share has increased 'significantly' in fourth quarter. Steel giant ARCELOR MITTAL (+0.99%) wants to become 75% self-sufficient in iron-ore by 2012 and 90% by 2018 and to raise its coal production to 17 million tons p.a. from 13 million tons today, French business daily Les Echos reported, quoting a member of the management board. CORPORATE EXPRESS (-1.41%) has agreed to sell two units in Germany to Datagroup IT Services Holding AG, the latter has said in a statement on its website. The units are expected to have revenues of c.€3 million in fiscal 2007-08. In broker news, ING downgraded SBM OFFSHORE (-0.44%) to hold from buy.
Spanish stocks ended Wednesday's session in the negative terrain with Wall Street also trading in the red. Of note, Morgan Stanley reported a fourth quarter loss, while China Investment bought a 9.9% stake in the investment bank. Locally, management changes were to the fore. Julio Linares was confirmed as TELEFONICA's (-1.3%) COO, while FCC (-1.39%) named Baldomero Falcones as its new chief executive. In other news, REPSOL (-0.37%) could help Argentine businessman Enrique Eskenazi with the financing needed to buy a c.15% stake in YPF, La Gaceta wrote. Meanwhile, the oil firm sold a further 5% stake in CLH to Deutsche Bank for €176.5 million. COLONIAL's (-6.23%) chief executive, Mariano Miguel, told Europa Press that the Spanish property firm expects to end 2008 with some kind of share purchase agreement with Gecina or another company. UK firm 3i could be no longer interested in buying all of DERMOESTETICA (-12.25%), but instead just want the UK unit, La Vanguardia reported. AVANZIT's (-19.29%) audiovisual unit VERTICE 360 (+28.02%) made a stunning bourse debut. In broker action, Merrill Lynch downgraded UNION FENOSA (-0.41%) and ENAGAS (-2.79%), while Exane focused on hotel chains initiating on NH HOTELES (-1.87%) with underperform and SOL MELIA (-2.68%) with neutral.