PARIS (Thomson Financial) - Share prices were firmer midday, buoyed by positive newsflow on French corporates, with LVMH firmly in focus after a strong set of third quarter and nine-month sales figures.
At 12.30 pm the CAC-40 index was up 5.71 points or 0.10 pct at 5,849.66.
On the Matif, October CAC-40 futures were trading at 5,854.50.
The euro was quoted at 1.4236 usd versus 1.4164 usd late Friday.
Investors snapped up LVMH shares after the luxury goods group reported above-forecast organic sales growth for the third quarter and first nine-months of the year.
At lunchtime, shares were up 2.84 eur or 3.32 pct at 88.34.
According to Oddo analysts, third quarter sales rose 15 pct like-for-like, which compares favourably with a consensus forecast for a 11.8 pct rise.
Nine-month sales were up 13 pct like-for-like, exceeding Oddo's forecast for 11.8 pct growth.
Merrill Lynch analysts reiterated their 'buy' stance and price target of 95 eur, saying all divisions at the luxury goods group had surpassed their expectations, adding weight to their scenario of 11.8 pct EBIT growth for the full year.
French utilities GdF and Suez were firmly in focus over the morning, posting strong gains in the wake of encouraging comments on the forthcoming merger.
In a pre-market announcement, the groups said the merger should be completed in the first half of 2008 and will generate 1 bln eur of operational synergies per year.
EBIDTA is seen rising to 17 bln eur by 2010, and capital expenditure should totaL 10 bln eur per year.
Oddo analysts upped their price target to 43 eur from 41 for GdF and to 48 eur from 45 for Suez, saying 'even if there's nothing fundamentally new in today's announcement, we think it's high time to bet on this project.'
Despite the bad memories left by other major French mergers, investors should feel reassured in this case, as the deal is likely to create value on a number of levels, with minimal execution risk, they said.
Elsewhere among blue chips, Alstom climbed 2.23 or 1.45 pct to 156.30 following a positive note from Cheuvreux.
The broker raised its target price to 175 eur from 155 eur, citing the increased likelihood the company will be merged or bought out rather than remain a stand-alone entity.
The broker sees a 75 pct chance Alstom will be combined with parts of Areva or Bouygues, especially since Bouygues now holds around 30 pct of the company.
'In the case of a combination with Areva NP, we believe that at least a minimal amount of synergies can be expected, amounting to 12 eur per share,' Cheuvreux analysts said in a note to clients.
Oil giant Total provided a strong lift to the index, rising 1.15 or 2.07 pct to 56.74. Oil prices continued to rise today after closing at a new record in the previous session, buoyed by worries that supplies are insufficient for coming winter demand and concerns over the conflict between Turkey and Kurds in northern Iraq.
Chemicals group Air Liquide was boosted by M&A talk, rising 1.33 or 1.39 pct to 96.72 on rumours of acquisition interest from Dow Chemicals.
Shares rose to a high of 97.85 before falling back slightly as dealers expressed scepticism over the bid talk.
'It's perfectly possible but Air Liquide rumours are common currency,' on local dealer commented.
Among today's fallers, Peugeot shed 1.78 or 2.96 pct to 58.29 following a downgrade to 'sell' from 'neutral' at UBS.
In a note on European carmakers issued today, the broker said Peugeot is one of the most likely to miss its 2008 targets.
'In a highly competitive sector and weaker macro environment we are becoming increasingly worried that Peugeots targets may simply not be attainable,' the broker said.
'Someone has to miss and Peugeot looks vulnerable in our view,' UBS added.
In the banking sctor, Societe Generale fell back 1.97 or 1.60 pct to 120.83, after rumours emerged it may be mulling a bid for Comemrzbank.
A bank analyst said talk of an acquisition was undermining the takeover premium currently integrated into SocGen shares.
'Societe Generale currently trades at a premium because it's the only French bank that is seen as a potential takeover target,' a bank analyst commented.
'Now we're hearing talk that the bank could turn buyer rather than target, which means the share could go from a premium to a discount,' he explained. tfn.paris@thomson.com vb/jlw COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
At 12.30 pm the CAC-40 index was up 5.71 points or 0.10 pct at 5,849.66.
On the Matif, October CAC-40 futures were trading at 5,854.50.
The euro was quoted at 1.4236 usd versus 1.4164 usd late Friday.
Investors snapped up LVMH shares after the luxury goods group reported above-forecast organic sales growth for the third quarter and first nine-months of the year.
At lunchtime, shares were up 2.84 eur or 3.32 pct at 88.34.
According to Oddo analysts, third quarter sales rose 15 pct like-for-like, which compares favourably with a consensus forecast for a 11.8 pct rise.
Nine-month sales were up 13 pct like-for-like, exceeding Oddo's forecast for 11.8 pct growth.
Merrill Lynch analysts reiterated their 'buy' stance and price target of 95 eur, saying all divisions at the luxury goods group had surpassed their expectations, adding weight to their scenario of 11.8 pct EBIT growth for the full year.
French utilities GdF and Suez were firmly in focus over the morning, posting strong gains in the wake of encouraging comments on the forthcoming merger.
In a pre-market announcement, the groups said the merger should be completed in the first half of 2008 and will generate 1 bln eur of operational synergies per year.
EBIDTA is seen rising to 17 bln eur by 2010, and capital expenditure should totaL 10 bln eur per year.
Oddo analysts upped their price target to 43 eur from 41 for GdF and to 48 eur from 45 for Suez, saying 'even if there's nothing fundamentally new in today's announcement, we think it's high time to bet on this project.'
Despite the bad memories left by other major French mergers, investors should feel reassured in this case, as the deal is likely to create value on a number of levels, with minimal execution risk, they said.
Elsewhere among blue chips, Alstom climbed 2.23 or 1.45 pct to 156.30 following a positive note from Cheuvreux.
The broker raised its target price to 175 eur from 155 eur, citing the increased likelihood the company will be merged or bought out rather than remain a stand-alone entity.
The broker sees a 75 pct chance Alstom will be combined with parts of Areva or Bouygues, especially since Bouygues now holds around 30 pct of the company.
'In the case of a combination with Areva NP, we believe that at least a minimal amount of synergies can be expected, amounting to 12 eur per share,' Cheuvreux analysts said in a note to clients.
Oil giant Total provided a strong lift to the index, rising 1.15 or 2.07 pct to 56.74. Oil prices continued to rise today after closing at a new record in the previous session, buoyed by worries that supplies are insufficient for coming winter demand and concerns over the conflict between Turkey and Kurds in northern Iraq.
Chemicals group Air Liquide was boosted by M&A talk, rising 1.33 or 1.39 pct to 96.72 on rumours of acquisition interest from Dow Chemicals.
Shares rose to a high of 97.85 before falling back slightly as dealers expressed scepticism over the bid talk.
'It's perfectly possible but Air Liquide rumours are common currency,' on local dealer commented.
Among today's fallers, Peugeot shed 1.78 or 2.96 pct to 58.29 following a downgrade to 'sell' from 'neutral' at UBS.
In a note on European carmakers issued today, the broker said Peugeot is one of the most likely to miss its 2008 targets.
'In a highly competitive sector and weaker macro environment we are becoming increasingly worried that Peugeots targets may simply not be attainable,' the broker said.
'Someone has to miss and Peugeot looks vulnerable in our view,' UBS added.
In the banking sctor, Societe Generale fell back 1.97 or 1.60 pct to 120.83, after rumours emerged it may be mulling a bid for Comemrzbank.
A bank analyst said talk of an acquisition was undermining the takeover premium currently integrated into SocGen shares.
'Societe Generale currently trades at a premium because it's the only French bank that is seen as a potential takeover target,' a bank analyst commented.
'Now we're hearing talk that the bank could turn buyer rather than target, which means the share could go from a premium to a discount,' he explained. tfn.paris@thomson.com vb/jlw COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2007 AFX News
