On the Move: STM, Telecom Italia, Arcelor Mittal
ALLIANCE & LEICESTER was up £0.24 to £11.28. Panmure cuts target to £10.87 from £11, keeps hold. The company says the company long perceived as safe and steady- if a bit dull- appears to be picking up its pace of top-line growth. Adds that the promotion of FD David Bennett to CEO is no surprise, and does not change view of the company as a valid takeover target. The company says overall performance to date should to boost fiscal 2007 core operating profit to around the top of the current range of analyst forecasts (£571 million-£608 million, with an average of £595 million). Has appointed group finance director David Bennett as CEO, effective 27 July. Adds that retail banking managing director Chris Rhodes will become group finance director.
ANTOFAGASTA was up £0.27 to £5.94. The company expects 2007 to be another good year with good operational performances supported by favorable market conditions and a sound balance sheet. Continues to look cautiously at the exceptionally strong copper prices but says there does seem now to be a consensus these should remain high compared to historical levels well into next year.
STM (STM) was up €0.09 to €14.12. Finmeccanica's CEO Pier Francesco Guarguaglini is prepared to sell its remaining stake in the company to fund a major US acquisition. JP Morgan upgrades Semis to overweight from underweight. Recommends the company among its favored sector stocks.
DEXIA was up €0.09 to €23.79. Rumors of bid from SocGen continue to boost the shares, market sources say.
HEIDELDRUECK was down €1.09 to €35.83. The company expects operating profit to rise 10-15% in the current fiscal year ending March and net earnings to increase by roughly 5% of sales from around 4% last time. It proposes a dividend of €0.95 per share for 2006/07 versus the €0.65 paid in the previous fiscal year.
KARSTADT was down €0.06 to €25.49. Citigroup selling 2.7 million shares at €24.1 apiece, source says.
TELECOM ITALIA (TI) was up €0.20 to €2.054...Bernstein upgrades to outperform from market perform. Ups target to €2.50 from EUR 2.35. Maintains €2.0 price target for savers. The firm says three factors support this: valuation, investor expectations and structural advantages. The company 's new controlling shareholders, Spain's Telefonica and a group of Italian investors, could be delayed by regulators from announcing sweeping plans for the company , writes the FT. Citing people close to the talks, the FT reports that permission, though still expected, may not now be granted until September or October - rather than August has had been hoped. There are delays in Brazil in particular where both the company and Telefonica have a substantial presence, adds the article.
ARCELOR-MITTAL (MT) was up €1.35 to €47.41. The company's CEO Lakshmi Mittal has said he does not rule out further 'large' acquisitions for the company as the steelmaker seeks to consolidate its position as the industry's largest, Bloomberg writes. However, it emerges that Nippon steel has raised its stake in Godo Steel to 15.5%. Nippon is attempting to block any potential bid from the company. John Wood, who runs US$3 billion hedge fund SRM Global, is set to join a legal action against the directors of the company after the company tried to force the minority shareholders to accept much worse terms than it originally offered, the FT reports.
ABN AMRO (ABN) was up €0.25 to €35.35. The FT reports that Barclays has drawn up contingency plans to restructure its all-share offer for the company with a significant cash sweetener in case it is forced into a full-blown battle for control of the company.
In other news, the company is looking to sell its 40% stake in Saudi Hollandi Bank, reports Reuters - quoting Hollandi's chairman Suleiman al-Suhaimi in an interview with al-Riyadh newspaper. The stake is worth around US$1.1 billion, the report continues. A regulatory filing has revealed that ING's voting stake in the company has fallen to 3.65% from an earlier 5.16%.
PHILIPS (PHG) was down €0.08 to €30.47. Toshiba has no plans to buy a stake in flat screen maker LG Philips LCD, reports MarketWatch, quoting a company spokesman. Last week, Chinese newspaper 21st Century Business Herald reported that the company could sell a 14% stake of the LCD specialist to Toshiba.
ERICSSON (ERIC) was up SEK0.32 to SEK25.90. JP Morgan upgrades Euro IT to overweight from neutral. Specifically, within subsectors, broker raises the weights of both Semiconductors and Software to overweight from underweight, while it remains overweight on Tech Hardware. Recommends ASML among its favored sector stocks . Furthermore, according to Cellular news citing El Nacion daily, the company enters an agreement with Costa Rica's telecom company ICE for US$65 million to construct c.300.000 GSM lines.
SWEDBANK was up SEK2.50 to SEK245.00. The company will introduce a new fund marketing tool called FundSquare where it will sell its own and other funds. This means higher competition for online brokers such as Nordnet and Avanza, according to local news reports. Citigroup upgrades to buy vs hold and raises target to SEK300 vs SEK275. The company says Baltic banking is a vital growth driver for the company Expects over 80% of the company's 2006-09 group PBT growth to be driven by its best-in-class Hansabank franchise.
INDITEX was up €0.65 to €45.25... first quarter results beat consensus forecasts - the company delivers first quarter sales up 19% to EUR 2.039 billion, with net profit up 33% to €200 million, ahead of consensus. Adds gross margin reached €1.15 billion, +20% and representing 56.4% of sales vs 55.7% year-over-year. EBITDA rose 27% to €397 million and EBIT 31% to €281 million. the company 's eight formats opened 114 new stores in the quarter, taking total to 3,245 worldwide. Maintains forecast of 440-520 net store openings in fiscal 2007 and capex of EUR 850 million-€950 million. A local broker describes the results as much better than expected, noting the improved gross margin. A second broker says the one flaw is that the pace of store openings is a little slow.
NH HOTELES was up €0.42 to €16.47. Sark Master Fund has bought a 1.257% stake in the company This acquistion has generated rumours of a prospective break-up between the company and its main shareholder, Hesperia. Sark Master Fund has acquired 1.9 million shares at €30 million. Caja Madrid upgrades to hold from reduce with increased €16.50 fair value. The company says this follows the better-than-expected first quarter07 results in the Hotel Division and incorporates the new size after having acquired Jolly Hotels and Framon. Notes the company's trading reflects not only the good fundamentals present in the sector in general as well as the company , but also the speculation regarding sector concentration.