From Standard & Poor's European MarketScope
Major European stock indexes finished mixed Friday. Trading volume was low across the continent Friday. Wall Street was open only for half a session after Thursday's Thanksgiving holiday and early performances were positive, especially retailers. Today is Black Friday in the US, the busiest shopping day of the year.
United Kingdom: The FTSE 100 index (+0.23%) had a solid day's trade in light volumes. In London, Tesco (-0.88%) slipped despite in line third quarter sales. Investors felt uninspired by the numbers. BAT (BTI ) (-3.59%) was the biggest FTSE loser on earnings concerns. WPP (+2.03%) gained after confirming it does not intend to make an offer for Aegis (-2.69%). Tate & Lyle (+7.6%) soared following amendments to the EU sugar regime reforms. Numis upgraded the company to add from hold, lifting its target price to £6.00 from £5.52.
The price range for the Britvic IPO has been set at £2.10-£2.50. Conditional trading is expected to take place on or around 9 December. Intercontinental (IHG ) (+2.04%), Pernod Ricard and Whitbread (-0.53%) are selling in aggregate 71% of the total issued capital. Whitbread said it expects to net between £80.30 million and £95.60 million. Kesa (+1.23%) rebounded from Thursday's falls. The stock received a slew of downgrades after disappointing third quarter sales. Lehman lifted its Partygaming (+3.33%) price target to £1.16, and kept its overweight rating.
Germany: The Xetra-Dax index ended Friday's session little changed. In Frankfurt, newspapers reported that the German government plans to sell off €31 billion of state assets. This includes Deutsche Telekom (DT ) (-0.21%) and Deutsche Post (-0.79%). Meanwhile, DrKW downgraded Deutsche Telekom to add from buy, saying 2006 free cash flow is likely to be low and could be less than the anticipated €3 billion dividend payout, 2007 revenue guidance is too ambitious and the cost of job cuts could be another threat to the 2006 dividend.
Deutsche Post has won European Commission approval to buy the UK's Exel for an agreed £3.7 billion to create the world's No. 1 logistics group. Elsewhere, Allianz's (AZ ) (+0.52%) Dresdner Bank unit may trim several thousand jobs as part of a profitability and growth program. VW (-0.23%) may sell its Europcar International car rental unit to financial investors in the next four months, Handelsblatt reported. Suedzucker (+3.31%) has named Thomas Koelbl as new CFO to succeed Kirsch in January. Further on the broker front, HSBC has initiated coverage of ThyssenKrupp (+0.17%) with a neutral rating and €18 price target. The broker thinks steel equities have not yet seen their highs for this economic cycle.
France: The CAC 40 index (+0.30%) closed on a slight gain, after a quiet session in subdued volumes. Brent crude oil steadied at US$55.12 per barrel, with Total (TOT )(+0.32%) stable in Paris. Carrefour (-0.14%) dipped after UK supermarket giant Tesco reported disappointing third quarter core sales. TF1 (-0.56%) lost ground after Euronext confirmed that the stock will be replaced by EdF (+0.95%) in the CAC 40 index, effective December 19. BNP Paribas (+0.67%) was the day's main gainer, bolstered by upgrades from Citigroup, ING, Goldman and SocGen.
The Aegis saga continued with WPP saying it would not make a bid. Contender Vincent Bollore, CEO of Havas (-0.51%), is said to be mulling an increase to his 25% stake; he will not be subject to the same time restrictions as UK peers to launch a bid. In other news, Air France (+2.44%) flew to a new high after Merrill Lynch upgraded the stock to buy from neutral with a price target of EUR 20. Saint-Gobain (+1.10%) gained on a Deutsche Bank upgrade of its target price to €60, rating it a buy. Renault (-0.97%) dropped after an interview in La Tribune in which CEO Ghosn said he expects 2006 to be challenging. He also blamed the recent drop in fiscal 2005 operating margin guidance on the group's over-reliance on the Megane model.
Elsewhere:Spanish stocks finished in the black, though the IBEX 35 (+0.14%) lost some of its earlier gains. Spanish PPI fell to 4.9% year-over-year in October vs. 5.4% in September. Abertis (+0.93%) was said to be favorite to acquire Sanef, while Cintra (+1.79%) is best placed to buy APRR, according to the French press. Fortis commented that Antena 3 (+2.95%) should see greater advertising revenues in the fourth quarter of 2005 than Telecinco (+0.84%) due to the former's improving audience share.
It was not such a quiet session on Scandinavian markets Friday. Despite low volumes and lack of impetus from Wall Street, Nordic stocks performed well, with notable newsflow affecting key blue chips. Scandinavian action concentrated on Denmark, with Danisco (+4.67%) jumping after yesterday's EU decision to cut the price of sugar by 36%. Danske Equities thinks the move will trigger consolidation in the industry, where Danisco will be a key player. Vestas Wind (-3.43%) was the other Danish extreme as the stock extended yesterday's 20% fall, with most brokers cutting targets.
Prepared by Zaida Espana, Valerie Vidal, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, Julien Manrique, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)