AFX News Limited Euroshares outlook - higher as falling crude prices, M&A news offset Dow slip 06.19.2006, 03:02 AM
LONDON (AFX) - Europe's largest exchanges are expected to move higher in opening deals as falling oil prices and M&A hopes offset modest small losses on Wall Street on Friday, dealers said.
The DJIA lost 0.64 points to 11,014.55, having jumped 198.27 points on Thursday. The Nasdaq fell 14.20, or 0.66 pct, to 2,129.95.
Friday's US economic data was robust. The deficit in the broadest measure of foreign trade showed an unexpectedly large improvement during the first three months of this year, but soaring global oil prices are expected to limit such gains.
Inflation-wary traders chose to hang on to Thursday's comments by Federal Reserve Chairman Ben Bernanke that record energy and commodity prices could account for some of the recent uptick in core prices but that inflation expectations have remained within historical ranges.
In Asia, the Nikkei ended the morning down 68.55 points at 14,810.79 while the Hang Seng Index finished the morning down 80.89 points at 15,761.76.
Oil prices fell in Asian trading hours as signs emerged that Iran may be willing to compromise on its controversial nuclear program and reach a diplomatic settlement with the West, dealers said.
In Europe, M&A news and rumours look set to dominate trade, with Nokia and Siemens in focus as industry sources confirm reports the pair are to merge their phone equipment businesses in a deal worth 25 bln eur.
Nokia will be the stronger partner in a new company based in Finland, according to the Wall Street Journal.
The combined company would have a 21 pct share of the 65 bln eur wireless equipment market, second only to Sweden's Ericsson AB. Siemens CEO Klaus Kleinfeld sold the German engineering company's handset business and plans to pull out of unprofitable units after earnings dwindled during his 16-month leadership.
And Veolia Environnement said favourable market conditions in the year has led it to raise its full-year sales guidance slightly to 'over 10 pct' growth from 6-8 previously.
In a statement Saturday announcing the failure of its bid to merge with Vinci, the group also said it expects 'faster' growth in operating profit over 2006, but gave no precise details.
Deutsche Boerse AG is planning to write directly to Euronext NV shareholders, presenting the details of its takeover proposal, Die Welt newspaper said, citing sources.
Separately, the Frankfurter Allgemeine Zeitung said Deutsche Boerse AG is considering increasing by 10 pct the cash component of its takeover offer for Euronext NV.
And NYSE Chief Executive Officer John Thain said his company may open an exchange in London if plans to merge with Euronext don't deliver enough share listings, according to a report in the Financial Times.
A raft of leading private equity houses are weighing up bids for beleaguered UK healthcare software company iSoft Group PLC, according to a report in the Observer.
Permira, Carlyle and Blackstone are all thought to be running the rule over iSoft, which has suffered a 90 pct collapse in its share price over the last six months amid a number of major set-backs to its contract with the UK's National Health Service.
And Private equity giant Kohlberg Kravis Roberts is once again considering launching a takeover bid for ITV PLC, the UK largest commercial broadcaster, according to the Mail on Sunday.
In an unsourced report, the newspaper said KKR has re-visited an old plan to buy ITV, which has seen its share price fall substantially since it turned down a 130 pence per share offer from a consortium spearheaded by ex-BBC director general Greg Dyke. ITV closed at 102-3/4 pence on Friday.
Telecom Italia SpA is interested in AOL's operations in Germany and France, daily Il Sole 24 Ore said Saturday in a report, citing Telecom Italia's chairman Marco Tronchetti Provera.
A report Friday in daily Finanza & Mercati said Telecom Italia had mandated an investment bank to study the purchase of AOL's broadband operations in the two countries.
The acquisitions could cost a total 600-700 mln eur, according to the newspaper.
But BT may be under pressure as the Times said it is to be fined millions of pounds by UK authorities by the end of the month for alleged anticompetitive behaviour over pricing high speed Internet access.
And PPR will announce the sale of its Printemps department store chain midway through this week, with Unibail and Rodamco the two remaining candidates, Les Echos reported.
PPR has yet to confirm it had decided to sell Printemps, but according to press reports its banking adviser ran an appeal for buyers which closed last Wednesday and a source close to the matter told Agence France-Presse Friday as deal might be days away.
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