Economic Analysis and Indicators

The French Groupama is close to concluding an agreement to acquire a minority stake in Italian Premafin, Ligresti family holding that controls the insurer Fondiaria-SAI, reports the daily Il Sole 24 Ore on Friday.

Premafin Fondiaria and were temporarily suspended from trading on the Milan Stock Exchange.

The purchase of an interest by the French mutual insurer will be the first step in a broader agreement, "wrote the Italian newspaper, citing unidentified French sources.

Neither nor Premafin Groupama were immediately available.

It is unclear whether the operation will be conducted via a reserved capital increase or through a repurchase of shares from existing shareholders, said Il Sole 24 Ore that considers less likely to buy back shares on the market.

ABB announced the figures down for its third quarter 2010, but its results still fell less than expected, and he sees with bright prospects.

Net income fell to $ 774 million against 1.034 million in the same period a year earlier, said the group of Swiss-Swedish engineering in a statement. Analysts polled by Reuters on average expected a net profit of 670 million.

Operating profit (EBIT) declined from 19% to 1.156 million, 1.419 million instead of the collapsing margin to 14.6% against 17.9% a year earlier.The markets were anticipating an EBIT of 978 million.

Turnover has remained stable 7.9 billion, exceeding expectations which saw 7.8 billion, while orders have expanded from 16% to 8.2 billion against 7.06 billion ago one year. In local currencies, it shows an increase in turnover of 18%.

Analysts had forecast new orders of 7.87 billion.

The outlook remains cautious, however footprints."Spending on equipment remain sluggish current, a trend expected to continue until next year," admitted the chief Joe Hogan said in the statement.

If the group still believes that its short and medium business cycle will continue to fuel its growth until early 2011, it believes the outlook remains mixed for the rest of the year in its long cycle activities, thus echoing its September forecast.

"We still see growth opportunities, particularly in the areas of renewable energy and manufacturing efficiency as well as in emerging markets," added the chief, noting that this quarter has seen a "significant increase in demand especially in those countries. "

ArcelorMittal anticipates a fourth quarter well below expectations due to anemic demand, falling prices and a rise in commodity prices.

Analysts had expected a modest improvement on the contrary accounts.

"What emerges from this is the weakness in demand is expected to continue in the fourth quarter of this year," said chief financial officer, Aditya Mittal, during a conference call.

The action ArcelorMittal abandoned at 5.48% to 23.65 euros at 14:50 on the Paris Stock Exchange, making it the largest drop in the CAC 40 and the biggest contributor to the decline in the index.

At this price level, the title lost 26.5% since the beginning of the year and more than 30% from its peak in April.The European index of raw materials has gained 10.4% since January and down 5% from its peak in April.

The world's largest steel, whose production is more than double its nearest competitor, said that deliveries would increase slightly, as average selling prices of steel would be lower than the third quarter and that costs of coal and iron ore would be higher.

"In the third quarter, the company achieved a performance close to our lowest expectations in a context of declining volumes for seasonal reasons, a slowdown in physical market price and higher costs," said the CEO Lakshmi Mittal said in a statement.

"Our outlook for the fourth quarter remains cautious for the foreseeable rise in input costs continue to impact production and demand will remain sluggish, however, differences according to region," said Aditya Mittal.

He said world demand should increase by 6% next year, according to forecasts from the World Association of steel, after rising 13% this year.

ArcelorMittal said its EBITDA was 1.5 to 1.9 billion dollars (1.07 to 1.36 billion euros) in the fourth quarter, down 25% from the third quarter.The Reuters gives 2.4 billion dollars.

The EBITDA for the third quarter was $ 2.27 billion, down 25% over the third quarter of 2009 but above the consensus was 2.26 billion.

SLOWING DEMAND FOR CHINESE

The steel sector, which weighs 500 billion, has benefited in the second quarter from a strong automotive sector and a booming demand in China, both of which have been well mitigated.

The price of coal and iron ore have also increased, but not those of steel.

In China, the total demand, with the effects of storage and release, contracted in the third quarter as a result of monetary tightening, even if economic growth and effective demand remains fundamentally sound.

ArcelorMittal reported a lower rate of capacity utilization to 71% in the third quarter, against 78% in the second.He said that the rate would remain at about that level over the last three months of the year, albeit with a slight increase in shipments.

The rate of capacity utilization does not improve is a big black spot, "said Ingo-Martin Schachel, analyst at Commerzbank, adding that investors are troubled by the lack of visibility to an improvement in the first quarter of 2011.

"It seems negative estimates for 2010 and 2011," he said.

Competitors such as Nucor and POSCO have already published results below expectations in the third quarter, the first reviewing its 2010 targets downward, while the second has warned against an uncertain environment.

U.S. Steel, which also published its accounts on Tuesday for his part reported a reduced loss in the third quarter – down to $ 51 million against 303 million a year earlier – but noted that his business had slowed in most of its markets over the second quarter.

Strikes against pension reforms have already cost more than 4 billion euros to the French economy, said Monday CGPME.

The economy minister, Christine Lagarde, had previously estimated the cost of social movements to 200 to 400 million euros per day.

"Already, we can reasonably quantify the cost of strikes and their effects induced more than 4 billion euros for the French economy," writes the employers' organization CGPME in a statement.

Essilor International has confirmed its objectives by announcing Friday a growth of 21.4% of its turnover in the third quarter, in line with expectations, driven by a positive impact from currencies and emerging Asia.

The group's turnover reached € 977 million (+3% organic growth) against the consensus of 978.8 million made by the editor of Reuters. Over nine months, it amounted to 2,903.8 million euros (+17.6%).

In a statement, the world leader in ophthalmic optics confirmed for the full year 2010, its growth target of sales between 5% and 7% excluding foreign exchange and strategic acquisitions, and that its rate contribution margin should be stable.

"We're in a context of fragile recovery, slow and variable from one month to another.(…) We see that European economies are distributed, others are not, "said chief financial officer, Lawrence Vacherot during a conference call.

"In Europe, it's pretty erratic with good months, some not so good.The trend is going in the right direction, but it is heterogeneous, "he added, pointing at the same time have found signs" encouraging "the U.S. market in September, but the trend remains lower than previous years.

In the third quarter, the structure effect was positive by 10.9% while the weakening of the euro against all other currencies billing group has generated a positive currency impact of 7.5% .

Around 10:15, the Essilor share fell by 0.90%, to 48.50 euros, compared with a decline of 0.3% of the CAC 40.The stock gained 16% since the beginning of the year, after rising about 25% in 2009.

An analyst with CM-CIC said in a note that European performance of the group is below expectations, and the Exchange may sanction Essilor on this point, despite the strong activity in Asia.

DROP THE DEBT

In Europe, sales totaled 339.4 million group euros (+4.7% as reported, -0.4% organic).

In Asia, Essilor's sales jumped 48.3% (+9.1% organically) to 119.4 million euros.

"India and China maintain their high level of activity, like the ASEAN countries where there has been an increase in product mix.However, markets remain difficult in Japan and Australia, "observes Essilor.

Asked to comment on the group's performance in emerging markets during a conference call, the Director General Hubert Sagnières said: "In these countries, our growth is above 20%, but our installed base today is relatively low. "

The group's turnover amounted to 386.4 million in North America (+15.9% and +1.8%).In Latin America, the group recorded an increase of 33.3% as reported (+21.7% organic growth) to 52.8 million.

Since the beginning of the year, Essilor made 18 acquisitions (excluding FGX International and Signet Armorlite) representing an additional revenue of approximately EUR 92 million in a full year.

In addition, between July and September, the group acquired 1.63 million shares on the market for an amount close to 78 million euros.

Essilor finally sold its stake in Sperian Protection to Honeywell for a net realizable value of 132 million euros.

Asked about the anticipated level of debt by the end of the year, the finance director said: "It depends on how many companies will join us."

"We have every certainty that our operating cash generation (…) works. We have a complete control of our working capital needs. For profitability, we have maintained our guidance. This will make the difference, c ' Perhaps the dollar and the number of acquisitions we have made, "he detailed.

In total, at the end of September, cash flows have reduced the amount of net debt Essilor to 332 million euros against 638 million at end June

Gemalto has declared Thursday "in line" with expectations of results for the year and in 2013, after reporting a third quarter sales growth above expectations, driven by the whole its major divisions.

The manufacturer of smart cards grew its quarterly revenues by 25% to 500 million euros, also benefiting from the integration of Cinterion, its latest acquisition in the segment of the communication between machines.

"We are in line with our growth plan and increase income for the year," said Olivier Piou, its chief executive, in a statement.

Gemalto, confirmed Thursday that operating profit target of 300 million euros in 2013, told Reuters in August that he considered "realistic" estimate of 200 million euros in operating profit advanced by analysts for current fiscal year.

A Paris-based analyst said that the acceleration of growth recorded in the third quarter should benefit the action, as he considers reasonable valuation of the title.

Around 9:35, the action progressed from 2.99% at 31.04 euros.

At this price level, the Gemalto share gained 1.8% since early 2010, after surging 70% last year.The sector index of technology stocks gaining on him more than 8% since the beginning of the year.

"This resumption of growth, which has no reason not to continue in the fourth quarter, will create operating leverage sufficient to meet or exceed the expectations of consensus on annual results of operations", commented on his side an analyst at CM-CIC in a note.

In the third quarter of 2010-2011, only the sales activity has declined payment terminals, having suffered from tensions in the supply of components, said Gemalto.This branch, less significant, was less than EUR 14 million in quarterly revenue.

Gemalto announced Wednesday night to be entered into exclusive negotiations with the American VeriFone, specializing in secure electronic payment, with a view to selling its payment terminals.

The French group said Thursday it had partnered with VeriFone, whereby both groups will promote U.S. credit cards with a chip, the cards are still many U.S. technology-based magnetic tape.

Wall Street fell nearly 1.5% on Tuesday, weighed down by both the decline in banking shares amid concerns about the outcome of the investigation on foreclosures and the folds of Apple and IBM after disappointing trial results.

The Dow Jones industrials lost 30 of 1.48%, yielding 165.07 points to 10,978.62 points. The S & P-500, wider, lost 18.81 points, or 1.59% at 1165.90 points.The Nasdaq Composite fell on its side of 43.71 points (-1.76%) to 2436.95 points.

The KBW Bank Index dropped 1.20% because of fears that some institutions be forced to repurchase billions of dollars of mortgages in cases where the irregularity of certain procedures of seizures is proved.

Bank of America, the first collector of mortgages in the U.S., fell 4.38% to 11.80 dollars after an article by the Bloomberg news agency as saying the funds PIMCO and Blackrock, and the Federal Reserve New York tried to force the bank to buy back $ 47 billion worth of mortgage-backed bonds.

This information has completely reversed the effect of quarterly results better than expected.Goldman Sachs has instead used the publication of performance exceeded expectations, gaining 1.96% action to 156.72 dollars.

Other big names in the banking sector, JPMorgan Chase has sold 1.39% to 37.69 dollars, Citigroup 2.64% to 4.06 dollars and Wells Fargo 1.29% to 24.55 dollars.

Shortly before the close of Wall Street, Robert Gibbs, spokesman for the White House has announced a government meeting Wednesday of the foreclosure crisis – and its possible consequences on the housing market in particular and the economy General – stressing that banks found guilty of irregularities were at risk of federal fines and lawsuits from homeowners.

The technology sector also weighed on the side, Apple has declined from 2.68% to 309.49 dollars and IBM of 3.36% to 138.03 dollars after investors were disappointed by the performance of selected field activity of both groups.

Coca-Cola has moved against the trend, closing up 0.57% to 60.34 dollars after the publication of a quarterly profit above expectations.

In contrast, Johnson & Johnson's share declined from 0.89% to 63.29 dollars after the group of consumer products has reported a quarterly revenue was disappointingly low.

Harley-Davidson has seen its share drop from 6.74% to 30.30 dollars after investors realized that the announcement of a better than expected quarterly profit was mainly related to the performance of the manufacturer's financing division motorcycles, whose sales have remained weak.

The European Commission referred France and Germany back to back in the record of Germany's Siemens trains selected by Eurostar to the detriment of the French Alstom for the Channel Tunnel, officials said Monday source community.

On the one hand, Brussels considers that the tender made by Eurostar does not, at this stage, no issue under EU rules on the matter.

On the other, the EU executive estimates that the component related to safety in the tunnel and their modification is not within its purview.

"The Commission received a letter of Alstom UK and responded this weekend.At this stage, on the basis of information provided, there is no problem in the bidding process, "the source told Reuters, but said that Alstom UK had not formally entered the Commission.

"There is apparently an issue related to safety in the tunnel," the source added."On this point, I do not see exactly what is the European dimension."

Saturday, the Frankfurter Allgemeine Zeitung had reported that Paris considered the tender contrary to European law and wanted to refer the matter to the Community authorities, that a French source denied on Monday.

"France has not grasped the European Commission and does not intend to do," said this source with knowledge of the case.

"We have no interest to the European Commission," the source said, arguing that the current safety rules did not allow Siemens to roll in driving the tunnel under the English Channel.

"NOTHING IS PLAYED"

Contacted by Reuters on Friday, Ministry of Transport had indicated that the government had not initiated proceedings before the Community authorities.

France, had been added, said that the contract can not be signed until an Anglo-French intergovernmental commission has completed its review of safety conditions.

Eurostar has launched a review of these rules and this change must now be endorsed by the States.

If this change did not intervene or was blocked by France, the contract could not be performed, consider another source community.

On Thursday, French State Secretary for Transport Dominique Bussereau, had argued that proposed by Siemens trains were not long enough and pose risks in terms of safety, especially in case of fire.

The Minister for Industry, Christian Estrosi, hit hard and held on Monday that "the case (was) not over."

"I say very clearly, in this case, nothing is played.Nothing is played, "he said on RTL radio, adding that the specifications were not met safety.

The railroad company Eurostar, which provides commercial links between Paris, Brussels and London since the opening of the Channel Tunnel in 1994, announced Oct. 7 that it intends to purchase high-speed trains to the detriment of Siemens incumbent supplier Alstom some 800 million euros, a move that has angered the French government.

Deutsche Bahn wants in particular to use the tunnel in 2012 at the London Olympics.

Enel announced Friday a narrow price range for the IPO of its renewables subsidiary PGE, the largest made in Europe in three years.

This range is 1.8 to 2.1 euros per share, confirming the figures given by Reuters on Thursday a source close to the deal, instead of pre-placement price of EUR 1.9 to 2.4 had been selected by Enel.

The final values range Enel Green Power (EGP) nine to 10.5 billion euros, said the utilities company Enel, the most indebted of the "utilities" in Europe, which hopes to raise at least three billion euros to reduce its debt and maintain its credit ratings.

The second European utility by installed capacity has put up 33% shareholding in its subsidiary in order to avoid loss of control during the EGM.

Sources said that the capital of Enel Green Power was composed of about five billion shares.If Enel sells third, the IPO will bring him 3.46 billion euros if it is the top of the price range that is selected.

Enel wants to reduce its debt to 45 billion euros by the end of the year against 53.894 billion at end June

Enel, which has received all necessary approvals for the transaction, expected to begin presentations to investors on Monday.

The final price of the transaction should be determined at the end of the month and the first listing in stock exchanges of Milan and Madrid is expected in early November, added the sources already mentioned.

The action Enel lost 0.25% to 3.96 euros in mid-morning while European utilities index combining the advanced 0.37%.

China will mainly rely on quantitative measures to tighten monetary policy in the coming months because its flexibility does not allow it to raise its interest rates, an economist said on Thursday close to the government.

The central bank ordered this week to six major banks increased their reserves, a measure intended to curb lending.This decision has relieved investors who see it as a less brutal alternative to higher interest rates.

"This shows that the central bank prefers to use quantitative tools and has therefore delayed the moment of a possible use of measures such as changes in interest rates," said Ba Shuson, senior economist of the Center Research on Development, a think tank run by the Government.

He told reporters on the sidelines of a conference that China should not consider an increase in interest rates by the end of this year.

He added that the increase in bank reserves was to maintain the volume of new bank loans under the ceiling of 7.500 billion yuan (800 billion euros) for 2010 set by the government, a ceiling could be increased to 8,000 billion for 2011.

People's Bank of China began this year back to normal monetary policy, relaxed during the crisis last year, but has not raised its rates in order to, inter alia, to avoid widening the gap between Chinese and U.S. and attracting more speculative capital.

Capital flows in China have continued to increase in recent months, a move favored by the gradual appreciation of the yuan and rising stock markets.

Another economist "official" spoke Thursday against a rate hike: Wang Jian, a senior official of the National Development and Reform, an influential organization of central planning, said that Beijing should allow an acceleration of inflation.

The general price rise in China is mainly due to changes in those food products and raw materials, "he said.

"In these circumstances, raising interest rates would not help fight inflation but could only lead to increased business costs," he said according to comments reported by the Xinhua news agency.