From Standard & Poor's European MarketScope
Royal Dutch Shell fell £0.13 to £19.20. Hurricane Rita could hit refineries harder than Katrina, says the FT, which points out that about 70% of oil production in the Gulf and 47% of natural gas had been shut, according to government figures.
BP fell £0.06 to £6.62. The company has been ordered to pay a US$21 million fine for health and safety violations in relation to the fire at its Texas City refinery that killed 15 employees and injured 170 in March, The Times reports.
Enterprise Inns rose £0.17 to £8.40. The company says its business has continued to perform well and expects that both pretax profit and EPS will be comfortably in line with its expectations.
Cadbury Schweppes fell £0.33 to £5.42. PepsiCo is understood to have asked for the information memorandum of the sale of the company's European beverages arm. The FT says more than a dozen buy-out groups are thought to have expressed an interest in the unit, which owns fruit drink brands such as Orangina, TriNa and Oasis that are considered to be at the healthier end of the soft drinks market.
EADS rose €0.63 to €28.46 on Friday. The CEO of the company's Airbus unit, Gustav Humbert, announced Thursday that European governments have pledged around €1.5 billion to help launch the A350 aircraft. The governmental financial aid could be seen as an affront by the U.S., who has taken the EU to the WTO on accusations of protectionism. The donor countries include France, Germany, Spain, and the U.K. Meanwhile, UBS lifted its target price on EADS to €38.0 from €32.0 and keeps its buy rating.
PSA rose €1.65 to €53.70 after Merrill Lynch upgraded the shares to buy from neutral and kept its €62 target price. The broker says the replacement of the company's flagship 206 model with the 207 in spring 2006 should mark the turning point in the company's product cycle and should support rising volumes and margins through fiscal 2008. AXA rose €0.24 to €21.79. CEO Henri De Castries has said that the company has its eye on Italy but declined to name any specific targets. The comment is likely to resurrect rumors of a merger between the company and Generali. Meanwhile, Lehman Bros. increased its target price to €26.0 from €24.0 and kept its overweight rating. SocGen raised its fair value on the shares to €25.5 from €22.5 and maintains its buy rating.
BNP-Paribas gained €0.45 to €59.85. The company is reportedly going to acquire a 20% stake in the capital of Chinese bank Nanjing City Commercial Bank.
IPSOS rose €3.00 to €101.60. Citigroup raised its target to €117.4 from €94.50 and kept its buy rating on a positive outlook from both the company and the sector.
Technip fell €1.37 to €48.50. A joint venture between the company and Chiyoda has been awarded a US$4 billion contract to build two LNG plants for Qatar Petroleum and Exxon Mobil.
Infineon gained €0.04 to €7.79. ABN Amro upgraded the shares to hold from sell, lifting the target to €8.2 from €5.5.
Munich Re gained €1.13 to €89.90. Goldman Sachs sees a trading opportunity in the stock as Hurricane Rita nears Houston. It keeps its outperform rating on the company's stock.
Hanover Re gained €0.78 to €27.46. Merrill Lynch says an industry loss of US$10 billion could produce net losses for ZFS, Swiss Re, Munich Re, Allianz and the company equating to 1% to 2% of embedded value. At Hanover, Merrill estimates a pre-Katrina 2005 capital adequacy ratio (S&P-style) of just over the 175% AAA threshold.
VW fell €0.17 to €49.98. The company has reiterated its 2005 profit forecast of year-on-year improvement in operating profit after special items, pretax. Its board is reportedly reviewing all options for the company's Gedas and Europecar units. On the broker front, noting the recent strong run, CSFB says expectations are clearly very high. It adds that while longer-term upside remains, it can't believe a better entry point will not present itself in the next six months. CSFB downgraded the shares to neutral with the target at €47.
SAP fell €1.08 to €137.50. Key competitor Oracle dropped 4.4 % in after-hours trading Thursday after saying new license revenue in the first quarter rose 9.9%, short of its forecast of as much as 25%. Goldman Sachs reckons SAP should meet its 2005 third quarter license revenue estimate of €537 million (down 7% quarter-over-quarter, but up 9% year-over-year). Goldman expects the strength to continue to be driven from the U.S. business. The broker made no change to its estimates, and maintains its outperform rating.
Trading in shares of Impregilo was suspended for the entire Friday session pending a statement. There is talk that Igli may have increased its exposure to the company by buying a stake in Gemina recently. Officially, Igli has 15.5% in the company while Gemina holds 11.8%. However, there is speculation that Igli has at least another 3%. If true, this would mean a combined stake of 30.3%, triggering a mandatory takeover bid at around €3 a share.
RCS Media fell €0.13 to €4.91. Stefano Ricucci's stake in the company is rumored to carry an average book price of €5.7 per share. Il Sole 24 Ore reports that the property developer and his creditor banks could continue to sell shares in the company. Finanza & Mercati says French group Lagardere could be interested in Ricucci's stake at the current price level. However, yesterday, Il Sole 24 Ore wrote that the French media group is not interested in Ricucci's stake in the company
TNT fell €1.51 to €19.83. The company launched an independent investigation into UK tax matters not originally covered in its August, 2004, report to the UK Inland Revenue, which is expected to reveal illegal tax matters. As previously announced by the company, the findings may have a material impact on the company's results and financial position. Consequently, Rabobank downgraded the shares to neutral from outperform, while cutting the price target to €20 from €24.
Royal Dutch Shell (NL) fell €0.20 to €27.08. West Texas Intermediate crude oil traded below US$66.00 per barrel Friday after settling at US$66.50 on NYMEX overnight. The fall comes as Hurricane Rita is downgraded to a category 4 storm. Rita is expected to reach the Louisiana and Texas coasts tonight.
Fortis gained €0.16 to €23.72. Merrill Lynch says takeover speculation regarding Dexia is not likely to dissipate. The broker adds that, with 54% of Dexia's shares being held by four strategic stakeholders and employees, a hostile bid is out of the question.
Skandia fell SEK0.80 to SEK39.90. The second AP-fund says no to Old Mutual's bid to acquire the company. Additionally, the company's board and Chairman Bernt Magnusson will stay on until shareholders have decided on the US$6 billion offer, says Magnusson. Adds that he, Bjorn Bjornsson and investor Christer Gardell have all been positive to the bid. However, a majority of the board recommends shareholders to say no to the bid. Separately, Old Mutual says the industrial logic of combining these two groups is compelling, providing prospects of enhanced growth with reduced risk for all shareholders.
Nokia fell €0.05 to €13.35. Lehman Bros. raised its global handset forecasts principally due to continued strong subscriber growth trends, notably in the emerging markets. It reiterated its equal weight recommendation on Nokia.
Norsk Hydro fell NOK13.50 to NOK733.50. The company discovered oil or natural gas in a well drilled at the Stetind prospect in the Norwegian Sea, according to Finansavisen. Separately, it is only a matter of time before the company divests its aluminum unit, say analysts to daily Dagens Naeringsliv. Meanwhile, peer Alcoa fell 6.4% overnight after the world's largest aluminum producer warned its third quarter earnings will be as much as 39% below Wall Street's estimates.
Trading in shares of Santander, ACS and Union Fenosa was suspended following reports ACS has offered €32 per share for Santander's stake in Union Fenosa. No one at ACS was available to comment. Friday morning, Cinco Dias reported that a consortium led by Amancio Ortega had offered €30 per share for Union. Santander has confirmed it is in talks but gave no details. Meanwhile, Caixa Galicia says it is not in talks to raise its stake further. Galp has reportedly said that it is not planning to present a bid for the stake. Fortis downgraded Union to reduce from hold. Dresdner KW says a deal with Galp may make sense in the future.
Swiss Re gained CHF0.45 to CHF81.10 while Zurich Financial was up CHF4.70 to CHF218.70. Merrill Lynch thinks when hurricane Rita makes landfall in Texas late Friday or early Saturday it would likely create a significant insured loss. The broker notes that Swiss Re purchases relatively little reinsurance compared with other European peers. In terms of direct property exposure in Texas, says Zurich has the largest exposure, with an 11% share of the commercial multi-peril market. Calculates from the experience of last year's four hurricanes plus Katrina, Munich Re, the company and Zurich each bore about 2% to 3% of the total insured loss. To use a round figure, says an industry loss of US$10 billion could produce net losses for these companies (based on the market shares above) equating to 1% to 2% of embedded value.