Business & Financial News

The Tokyo Stock Exchange closed slightly lower Friday, the expiry of futures and options at a price higher than expected have encouraged profit taking.

The Nikkei lost 0.72% or 73.93 points at 10,211.95 and the Topix broader yielded 3.38 points (0.38%) to 888.22.

Since the beginning of November, the Nikkei was up 12%. After touching a high of seven months in the morning at 10,373.70, it fell as a result of profit taking.

The Nikkei remains behind other major international indices.

According to analysts, technical signs that the market is overvalued.Coupled with the approaching end of the year, this should be downward pressure on the Nikkei.

Sovereign risk is the biggest danger to which the financial system of the euro area is exposed, said the European Central Bank (ECB) in its biannual report on financial stability published Thursday.

She added that if banks were to seek more assistance than what is currently planned, the situation could worsen significantly.

The ECB also states that authorities and the ECB must take care not to withdraw too quickly their exceptional support measures.

"A small number of schools … excessively dependent on the liquidity of the central bank and represents a significant portion of the total volume of refinancing," says the ECB."The fears vis-à-vis the banks and the difficulties they will face when the ECB will proceed again to the gradual withdrawal of its support measures for credit remains high."

"The main concern comes from the interaction between the problems of sovereign debt and the fragility of certain segments of the banking sector in the euro area," explained his side of the vice-president of the ECB's Vitor Constancio.

"I make no recommendation.From a technical standpoint, increasing the European Financial Stability (FESF) could facilitate (easing tension on the markets for sovereign debt).

Asked why the ECB did not provide a quantitative forecast for future writedowns that banks will still be, Constancio said that the reason was that the worst phase of the cycle was over.

Asked whether the ECB considered likely a new wave of big write-downs, he replied: "No, of course not."

The ECB finally observes that the financing needs of public finances in some countries of the euro area remain high in coming years and that therefore "there is a risk of increased competition for funding."

Such loans must by their promoters allow the pooling of risks in the euro zone government debt, and reduce the pressure on countries in financial difficulty.

Germany, which thanks to its robust economy enjoys great rate to borrow, is opposed to the idea, defended the contrary by the countries of southern Europe, the most abused currently on the market.

Berlin opposes "without even looking under the skirts of this proposal," said Mr Juncker in Die Zeit.

The major indexes on Wall Street were closed Monday in a disorganized, but still with small spreads, investors preferring to remain cautious in anticipation of what the Europeans decide to hold the debt crisis.

Responses of medium and long term planned to end the debt crisis in effect divide the members of the eurozone, amid continuing tensions on the markets.

The chairman of the Eurogroup Jean-Claude Juncker said at the end of the meeting of finance ministers from the euro area, no new decision would be announced.

He said that the Eurogroup and the IMF had discussed Spain and Portugal, two countries that have provided explanations on their programs and austerity measures taken and future.

The decline of the euro has otherwise exercised some pressure on prices.

The Dow Jones lost 19.90 points (0.17%) to 11,362.19 and the S & P-500 yields 1.59 point (0.13%) to 1223.12. The Nasdaq Composite gained 3.46 points (0.13%) to 2594.92.

Nevertheless, analysts are hopeful to see the S & P 500 quickly exceed the highest of the year a little longer than 1,227 reached on November 5.They believe that 1228 is a bar of resistance of primary importance to this index.

"Many elements of short-term play for the market," said John Kosar (Asbury Research), observing that the VIX volatility index moving almost 18 indicates that the market feels no fear.

Jim O'Neill, chairman of Goldman Sachs Asset Management, has also delivered an optimistic view for equities. Speaking at the Reuters summit on investment opportunities in 2011, he said that stock markets were likely to post gains of up to 20% next year.

Values, Kraft Foods sells 0.1% to 30.29 dollars.The food group said Monday it had sought an injunction to prevent against Starbucks coffee chain in its "attempt to unilaterally terminate" their trade agreement.

In addition, William Ackman, the hedge fund manager Pershing Square Capital, has offered financial assistance to the American chain bookstores Borders Group in its attempt to buy its rival Barnes & Noble for $ 964 million.

Barnes & Noble jumped 10.6% to 14.69 dollars, while Borders flames from 28.7% to $ 1.39.

3M has finally announced Monday a friendly takeover bid of 448 million dollars on the Swiss Winterthur Technologies, specializing in systems sanding operation which will expand even further its abrasive segment.

3M lost 0.07% to 86.88 dollars.

The technology has limited the losses after Oppenheimer had raised its recommendation on Cisco Systems to "outperform." Cisco gained 1.87%. Similarly Goldman Sachs became buyer Cognizant Technology Solutions, which advances from 0.71%.

Siemens signed a contract worth over 700 million euros to provide Eurostar trains, it was learned Friday from source familiar with the matter.

The operator of the Channel Tunnel traditionally commanded far its French rival Alstom TGV.

On 29 October the British courts had rejected a request by the French group seeking an injunction against the signing of the contract between Siemens and Eurostar.

No comment could be obtained immediately from Alstom.

The state has asked Alstom to participate in a second stage of the fundraising Areva planned next year, said Thursday the Financial Times.

Sovereign wealth funds from Qatar and Kuwait, and Japan's Mitsubishi Heavy Industries (MHI) were arguing for several months with the state to participate in this capital increase, decided in June 2009 and before end 2010 under a timetable this summer by the Elysee.

But Economy Minister Christine Lagarde said on Wednesday that the French state would take the time necessary to reach a satisfactory agreement on the capital increase of the public group.

According to the Financial Times, Alstom has been invited to participate in the capital increase during the second phase of this fundraising, to be held in 2011, along with Qatar and MHI.

Nobody was immediately available from Alstom for comment, while Areva declined to comment on the subject.

Initially, the Financial Times, the state plans to inject 250 million euros and 500 million in Areva Kuwait as part of an agreement "could be announced next week."

The second phase of fundraising, which would cover a minimum of 750 million euros, would take place within three to six months, according to the British daily.EDF could also be involved, "he adds.

"The state looks favorably its participation at the opening of Areva capital together (…) negotiations are ongoing with a number of investors, one of them well in advancing the short term with Kuwait Investment Authority, "Christine Lagarde said on Wednesday the press.

Patrick Kron, Alstom's chief executive, had called last month for "bad idea" to bring the event MHI, its competitor in turbines for power plants, capital of Areva.He also said in early November was not involved in Alstom's capital increase of Areva.

In 2008 he defended several times the idea of a global reconciliation with Areva "to create a world champion in the power generation and rail transport," a project that aroused opposition from the front of Anne Lauvergeon , president of Areva.

The timing of the fundraising Areva has lagged in recent weeks, Qatar has conditioned its participation in the possibility of converting its interest in the mining division of the group.

The state had also introduced a new parameter in the proposed capital increase in late July asking to Areva and EDF to forge a strategic alliance that could lead to a rise in public capital electrician manufacturer of engines, he now owns 2.4%.

Airbus announced Wednesday the launch of a version of its remotorisée A320 Family aircraft which will offer more fuel-efficient aircraft, a market for which Airbus sees a market for 4,000 aircraft.

This new version of the A320, Airbus called NEO, must also allow Airbus, a subsidiary of EADS, to withstand competition from new entrants to this market as Canada's Bombardier as well as that of his longtime rival, American Boeing.

This project represents an investment of just over one billion euros, "said Airbus Chief Operating Officer John Leahy said in an interview posted on the website of Airbus.

"Our goal is to make the most of a unit known for its operational reliability and maturity, and make it more efficient and environmentally friendly," said Tom Enders, the CEO of Airbus , in a statement.

The new version of the A320, one of the great industrial successes of the European aircraft manufacturer, will be equipped by 2016 engines for the latest short and medium haul created by Pratt & Whitney and CFM International, a joint venture combining General Electric and the French Safran.

By launching this new version of the A320, Airbus intends to respond to the emergence of new competitors, both Bombardier and Russian and Chinese aircraft manufacturers seeking to challenge his supremacy and that of the Boeing aircraft market more than 100 seats.

This decision is also in a context of greater competition among manufacturers of engines, a segment of highly profitable industry.