(BN) Europe Stocks Rebound From Five-Day Drop as Crisis Concern Eases

(BN) Europe Stocks Rebound From Five-Day Drop as Crisis Concern
Eases

Ion-Marc Valahu répond à Bloomberg – 11.07.2014

“We are looking for a rebound after a sharp selloff in the European markets over the last week,” Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail. “Portugal is down over 8 percent in a week on banking fears. The move looks overdone. Banco Espirito Santo appears to be an isolated incident.”

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Europe Stocks Rebound From Five-Day Drop as Crisis Concern Eases
2014-07-11 09:23:52.247 GMT

By Jonathan Morgan
July 11 (Bloomberg) — European stocks rose, rebounding
from a five-day slump, as takeover activity increased and
investors bet the financial troubles of Banco Espirito Santo SA
won’t spiral into an euro-area banking crisis. U.S. index
futures also climbed, while Asian shares fell.
Imperial Tobacco Group Plc advanced 3.2 percent after
confirming talks with Reynolds American Inc. and Lorillard Inc.
to buy some assets and brands. Symrise AG gained 1.5 percent
after a report that Japan’s Ajinomoto Co. may be interested in
buying the German maker of flavors and fragrances. Indesit Co.
added 2.6 percent after Whirlpool Corp. agreed to pay $1 billion
for a controlling stake in Italian appliance maker.
The Stoxx Europe 600 Index rose 0.4 percent to 337.71 at
10:21 a.m. in London. The benchmark gauge has lost 3 percent
this week as investors weigh valuations near the highest level
since 2009. Standard & Poor’s 500 Index futures climbed 0.2
percent today, while the MSCI Asia Pacific Index slid 0.3
percent.
“We are looking for a rebound after a sharp selloff in the
European markets over the last week,” Ion-Marc Valahu, a co-
founder and fund manager at Clairinvest in Geneva, wrote in an
e-mail. “Portugal is down over 8 percent in a week on banking
fears. The move looks overdone. Banco Espirito Santo appears to
be an isolated incident.”
The Stoxx 600 lost 3.6 percent in the past five days and
Portugal’s PSI 20 Index plunged to a nine-month low yesterday
after the parent of Banco Espirito Santo delayed making payments
on some short-term debt. The lender disclosed an exposure of
1.18 billion euros ($1.6 billion) to group companies. The bank’s
shares were suspended from trading yesterday, after plunging 32
percent this week.

‘Limited Impact’

The Espirito Santo group’s financial troubles are unlikely
to have systemic implications for the euro area, Goldman Sachs
Group Inc. said in a note. Portuguese bank assets account for
only 1.6 percent of the region’s total, foreign banks’ exposure
to Portugal is low and the European Central Bank stands ready to
support all banks, Goldman said.
Portugal has sufficient bank-recapitalization funds and
Espirito Santo is not a threat to the country’s financial
system, Barclays Plc analysts led by Antonio Garcia Pascual
wrote in a note.
“Notwithstanding any further bad news, we think that the
sovereign financial implications are rather limited,” they
said.

Tobacco Acquisitions

Imperial Tobacco gained 3.2 percent to 2,744 pence.
Reynolds, the producer of Camel cigarettes, is closing in on a
purchase of Lorillard and the two partners are considering which
parts of the combined business to sell to allay antitrust
concerns. Imperial Tobacco today confirmed it is in talks to buy
some of those assets and brands.
British American Tobacco Plc, which owns 42 percent of
Reynolds and must approve any deal, rose 1 percent to 3,554.5
pence.
Symrise climbed 1.5 percent to 39.74 euros. Platow Brief
reported that Ajinomoto hired an investment bank to prepare a
deal to buy Symrise. Archer-Daniels-Midland Co. agreed earlier
this week to buy Wild Flavors GmbH for 2.3 billion euros,
spurring speculation of consolidation in the industry.
Indesit added 2.6 percent to 10.80 euros. Whirlpool, the
American manufacturer of Maytag and KitchenAid appliances,
agreed to buy a 60 percent stake that represents about 67
percent of the Italian company’s voting rights.

For Related News and Information:
Developed Markets View: DMMV
World Stock Indexes: WEI
Stoxx 600 Market Map: SXXP IMAP
Top Stories on Stocks: TOP STK
Equity Screening: EQS
Graphing: GRAPH
Feature Stories on Stocks: TNI STK GREET

–With assistance from Anna Hirtenstein in London.

To contact the reporter on this story:
Jonathan Morgan in Frankfurt at +49-69-92041-207 or
jmorgan157@bloomberg.net
To contact the editors responsible for this story:
Cecile Vannucci at +44-20-3525-7032 or
cvannucci1@bloomberg.net
Srinivasan Sivabalan