MILAN (Thomson Financial) - Share prices were higher at midday, led by Finmeccanica, after the company won a significant US military deal, and Pirelli, as the sale of its controlling stake in Telecom Italia overcomes a regulatory hurdle.
At 12.24 pm, the Mibtel index was up 0.92 pct at 33,058 points and the S&P/Mib gained 0.93 pct to 42,318.
Finmeccanica up 2.49 pct at 23.47 eur. After the L-3 team, of which it is a member, won a supply contract from the US government, worth an estimated 6 bln usd over 10 years, to provide cargo planes for the military.
A broker estimated that Fimeccanica could obtain up to 2 bln eur in orders over the 10 period, representing 6 pct of its order book.
The deal adds at least 5 pct to Finmeccanica's valuation, he added.
Pirelli jumped 2.41 pct to 0.878 and Telecom Italia added 1.14 pct to 2.077 after the EU said that it does not need to be notified about the sale of Pirelli's 18 pct in the telecom operator to a group of investors including Telefonica.
Broker Centrosim said the closing of the transaction remains uncertain because it could be linked to clearance by the Brazilian authorities, where Telecom Italia and Telefonica control about 50 pct of the mobile market.
It added that the closing would lift some of the uncertainty surrounding Telecom Italia's future.
Fiat was up 2.20 pct at 20.89 after EU car registration figures for May showed a 5.7 pct jump in new car sales for the Italian group with a rise in the market share to 8.3 pct.
Piaggio gained 1.73 pct to 3.75 lifted by government incentives to scrap old motorcycles and replace them by more fuel-efficient ones.
Bulgari added 0.86 pct to 11.51. Kepler rates the stock a 'buy' with a 13 eur target price, on the belief that the company could be taken over, a dealer said.
Terna was down 0.02 pct at 2.65, Enel down 0.36 pct at 8.29 and AEM down 0.64 pct at 2.86 as utilities suffer from higher interest rates, a dealer said, noting that such companies, which usually offer high dividends, are hit by rising bond yields.
Nevertheless, Exane BNP Paribas rates Enel an 'outperform' with a 9.8 eur target price.
Intesa Sanpaolo was up 1.08 pct at 5.57 as the group is expected to decide by the end of the month the fate of its insurance and asset management unit Eurizon. According to a newspaper report, the bank could scrap plans to float Eurizon in order to extract greater value from it.
Prysmian rose 2.50 pct to 18.40 after ABN Amro initiated the stock with a 'buy' recommendation and a 20.4 eur target price.
L'Espresso dropped 0.73 pct at 3.865, retracing after yesterday's gains. Yesterday, Goldman Sachs had upgraded the stock to 'neutral' from 'sell'.
Telecom Italia Media dropped 2.21 pct to 0.2835. Goldman Sachs recommends to sell the stock and cut its target price to 0.24 from 0.29.
Parmalat added 0.09 pct to 3.185. Collins Stewart rates the stock a 'buy' with a target price of 3.8 eur.
Gemina was suspended today and tomorrow pending a statement. The group has reportedly made an offer to buy the 45 pct stake owned by Macquarie in Aeroporti di Roma SpA, the company that runs the Rome airports, of which Gemina already has a 51 pct stake.
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© 2007 AFX News
