Bloomberg: Stocks Climb in Europe, Asia; Emerging Markets Erase 2008 Loss
By Adria Cimino
May 19 (Bloomberg) -- Stocks rose in Europe and Asia as higher metals prices lifted commodity producers and investors speculated takeovers will increase. The MSCI Emerging Markets Index erased its 2008 loss, while U.S. index futures were little changed.
Anglo American Plc and Vedanta Resources Plc led gains by mining companies as gold reached a three-week high and Citigroup Inc. recommended the shares. Yahoo! Inc. rose in Germany after Microsoft Corp. said it revived the possibility of a deal, while Enodis Plc advanced in London as Manitowoc Co. raised its offer for the catering-gear maker. Falling profit and sales at stockbroker Collins Stewart Plc weighed on financial shares.
The MSCI World Index added 0.2 percent to 1,559.03 at 11:54 a.m. in London as nine of the 10 industry groups increased. The MSCI Emerging Markets Index rose as much as 0.5 percent. Futures on the Standard & Poor's 500 Index gained less than 0.1 percent.
Basic-resources companies ``are still our favorite sectors,'' said Christian Gattiker, head of research at Bank Julius Baer & Co. in Zurich. ``There is still a case in place'' to buy the stocks, he said.
Raw-material and energy stocks are the only two industry groups that have posted gains this year in the MSCI World gauge of 23 developed markets. They are also the best performers in emerging markets as record-breaking rallies in oil, coal and soybeans boosted equities from Rio de Janeiro to Moscow.
Gerdau SA, PT Bumi Resources and OAO Lukoil led the rebound in developing countries as rising global demand and the falling dollar pushed oil above $127 a barrel. Stocks in Brazil, Taiwan and Russia have propelled the MSCI Emerging Markets index, which lost as much as 16 percent this year, to within 7.5 percentage points of a record.
Europe, Asia
Europe's Dow Jones Stoxx 600 Index advanced 0.2 percent as more than six stocks rose for every five that fell. Austria's ATX Index briefly erased its 2008 loss.
The MSCI Asia Pacific Index increased 0.6 percent, gaining for a sixth day.
Anglo American, the world's second-largest mining company by sales, added 3.2 percent to 3,653 pence. Vedanta, India's biggest zinc producer, climbed 4.3 percent to 2,670 pence.
Gold for immediate delivery climbed as much as 0.4 percent to $906.24 an ounce, the highest since April 24. Copper gained on the London Metal Exchange on expectation rebuilding in China's quake-hit region will boost demand for the industrial metal.
Citigroup lifted its recommendation on Anglo American and Vedanta to ``buy'' from ``hold.''
Yahoo, Enodis
Yahoo, owner of the second-most popular Web search engine, gained 3.8 percent to $28.71 in Germany. Microsoft, the world's biggest software maker, said yesterday it's exploring an agreement with Yahoo that stops short of a full takeover. Redmond, Washington-based Microsoft didn't elaborate on the proposal and said it ``reserves the right'' to reconsider its bid to buy all of Yahoo.
Enodis advanced 2.4 percent to 305 pence after Manitowoc, the biggest ice-machine maker in the U.S., raised its offer to buy the U.K. company to 1.08 billion pounds ($2.11 billion), trumping a rival offer from Illinois Tool Works Inc.
``It's normal that we have a sustained level of M&A this year,'' said Emmanuel Soupre, a fund manager at Neuflize OBC Asset Management in Paris, which oversees about $15.6 billion.
Billionaire Warren Buffett meets today with business owners in Frankfurt as he looks outside the U.S. for acquisitions to spur profit growth at his $200 billion Berkshire Hathaway Inc.
``It's a positive sign,'' said Salah Seddik, a fund manager at Richelieu Finance in Paris, which oversees $6.2 billion.
Collins Stewart
© Copyright 2007 Collins Stewart - all rights reserved.
Collins Stewart fell 6.1 percent to 100 pence. The company said profit declined this year amid ``difficult'' market conditions and forecast no improvement in 2008.
Revenue in the four months ended April 30 dropped to 57.6 million pounds ($112.7 million), said the company, which didn't disclose profit. Sales totaled 73.1 million pounds in the year- earlier period.
Bradford & Bingley Plc tumbled 10 percent to 119.75 pence. The U.K.'s biggest lender to landlords sank to the lowest since its shares began trading as Panmure Gordon & Co. said the economic outlook has worsened ``significantly.''
HBOS Plc, Britain's biggest mortgage lender, slid 2.7 percent to 456.75 pence. Royal Bank of Scotland Group Plc, the U.K.'s second-biggest bank, sank 5.6 percent to 251.5 pence.
Infineon Technologies AG, Europe's second biggest semiconductor maker, climbed 1.9 percent to 7.03 euros. ASML Holding NV, Europe's largest maker of semiconductor equipment, added 1.6 percent to 19.38 euros.
Goldman Sachs Group Inc. raised its view on U.S. chipmaker stocks, saying a reduction in excess supply of semiconductors will drive a rebound in the shares. The recommendation is part of a bullish stance on semiconductor companies worldwide, according to a report dated yesterday.
British Airways
The airline ``is losing its ability to price up while maintaining volumes, and while a strong management team is taking measures to reduce capital spending and cut capacity, the earnings per share impact is significant,'' analysts including Chris Reid wrote in a note.
PV Crystalox Solar Plc surged 10 percent to 182.75 pence. The U.K. maker of silicon products that went public in June rose after saying sales of silicon products in the first six months of the year will be ``significantly'' ahead of the same period in 2007.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
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