German Stocks Little Changed as RWE Unit Receives OffersTrista Kelley
German stocks were little changed as RWE AG climbed following a report that the utility has received at least three bids for one of its businesses.
RWE rose 2.7 percent. ThyssenKrupp AG added 1.5 percent after Swedish steelmaker SSAB AB offered to buy Finland’s Rautaruukki Oyj to cut its costs and improve competitiveness. Allianz SE lost 1.2 percent after Mohamed El-Erian resigned from Pacific Investment Management Co., the insurer’s specialist bond-management business. Siemens AG slid 1.5 percent after ABB Ltd. booked charges for delays to offshore wind projects.
The DAX Index lost 0.1 percent to 9,720.11 at the close in Frankfurt. The equity benchmark had climbed as much as 0.4 percent and dropped as much as 0.5 percent today. The broader HDAX Index also decreased 0.1 percent.
“We’ve had some poor earnings, but that wasn’t enough to shift away from the fact that German investors are quite confident,” said Ishaq Siddiqi, a market strategist at ETX Capital in London. “German corporates are still doing better than other corporates in Europe.”
Fifty-seven percent of investors in a Bloomberg poll said that Europe’s bond markets have stopped deteriorating, the first time in two years that a majority of investors said that the worst of the debt crisis has finished. Forty-nine percent of the respondents said the euro-zone economy is now improving, up from 16 percent a year ago, according to the poll.
RWE advanced 2.7 percent to 27.61 euros after Dow Jones reported that the utility has received bids for its DEA oil and gas unit. Russian billionaire Mikhail Fridman’s L1 Energy made the highest bid, valuing the division at as much as 5 billion euros ($6.8 billion) including debt, according to the report, which cited unidentified people familiar with the matter.
ThyssenKrupp, Germany’s largest steelmaker, added 1.5 percent to 19.03 euros. SSAB offered to acquire the Finnish company for 10.1 billion kronor ($1.56 billion). SSAB and Rautaruukki surged 12 percent and 33 percent, respectively.
Allianz lost 1.2 percent to 130.95 euros. El-Erian, widely regarded as the successor to Pimco’s Bill Gross, will leave his dual roles of chief executive officer and co-chief investment officer after six years at the firm, Allianz said yesterday.
Siemens, Europe’s largest engineering company, declined 1.5 percent to 98.51 euros. ABB said the project delays and operational difficulties at its Power Systems division led to $260 million in charges. Chief Financial Officer Eric Elzvik said on a conference call that profit probably reached $525 million in the fourth quarter, missing the $923 million average prediction of analysts.
Aixtron SE, which makes semiconductor-production equipment, gained 4.3 percent to 11.78 euros. Cree Inc., a U.S. semiconductor company, reported earnings that beat analysts’ estimates compiled by Bloomberg.