Business & Financial News

Greece still has no government. The risk of bankruptcy and the issue of leaving the euro area is raised again. Result: the stock prices fall and investors flock to German bonds, even if they yield nothing. The Eurogroup meeting will be devoted to Greece and Spain

After a difficult week, the stock markets reopened on Monday sharply lower against the backdrop of prolonged political stalemate in Greece, epicenter of the debt crisis, while be held a meeting of the Eurogroup.

Monday morning, Paris was losing more than 2% in early trade, London 1.33%, 1.31% Frankfurt. In Milan (-2.02%) and Madrid (-2.47%), the decline was more pronounced after banks have announced they will place new provisions because of subprime mortgage they hold in their portfolios. The day promises to be difficult, while "the risks to the euro area are still very real," said Chris Weston of IG Markets.

More than a week after the parliamentary elections, Athens still has no government. But the prolonged absence of government raised concern among investors in a delay or suspension of financial aid promised in Athens to enable it to meet repayment dates and ensure payment of arrears.

Monday, the Greek President, Karolos Papoulias, will try to snatch a coalition government during the final meeting between the country's political leaders. But many observers believe the country is moving towards new elections in June as the positions between pro-and anti-austerity diverge.  

Another sign of market nervousness, the 10-year rate of German bond (Bund) fell Monday morning at their historic low (1.47%). The political situation seems to push investors to turn to these securities deemed safe. "Investors plébiscitent increasing security even if the debt did their German report anything," said Nordine Naam, bond strategist at Natixis. He added: "Fears of an output of Greece of the euro are strong and, in case of persistent political deadlock in that country, the Bund interest rate expected to fall further in the coming days".

It was in this tense situation the finance ministers of 17 member countries of the euro area shall meet this afternoon in Brussels. A signal strength should be sent to Athens, to push the Greek authorities to put in a faster end to this in-between chaotic. Spain will, too, part of the program. The Spanish Minister of Finance, Luis de Guindos, will try to reassure, giving an overview of the reforms that Madrid will set up to consolidate its public finances. Is that Spain is in the viewfinder markets. The rate of its 10-year government bonds is back above 6%.

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Even before the inauguration of the second Socialist president of the Fifth Republic, the president of MEDEF multiplies the signals conciliatory address.

Laurence Parisot and Francois Hollande said on Friday, already engaged in consultations with European leaders, was right to put the topic of growth on the table.

"We want to work to ensure that as soon as possible our country finds the path of sustained economic growth," she said on RMC and BFM-TV. "We have some impatience to meet the government or the president."

The chairwoman of the main French employers' organization believes, however, should not oppose this issue to that of fiscal discipline, which was one of the axes of attack of the outgoing president Nicolas Sarkozy against Francois Hollande during the presidential campaign.

"Obviously we need, all European countries today, methods, disciplines to manage our budgets," she said.

One position it defended in an interview with Les Echos, in which she wondered, however, also on how to complete the "budget package" signed in January by 25 of the 27 countries of the European Uni ; enemies by a "growth package". 

"We must also ask how to create a confidence shock that would be a growth shock without exacerbating the deficit," said the president of MEDEF. "In other words, we support a growth initiative, a 'compact growth' but not renegotiate the 'tax compact'."

It is in this context a series of proposals – hire a general review of European policies, define priorities in infrastructure to be financed by public-private partnerships or "project bonds" – bonds related to investment programs, etc..

CALL TO THE ECB AND BERLIN

"The chamber is clearly European. We join the call by Jacques Attali and Pascal Lamy for a government and an economic growth of European budget ", says she

……. .. The former collaborator of François Mitterrand and the current Director General of the World Trade Organization are deemed close to the Socialist Party

.. Laurence Parisot ……. Les Echos also develops in any argument that would not have denied the candidate Holland

. "We want Europe to have a clear doctrine and assumed in terms of competitiveness, that is better coordination between monetary policy, fiscal policies and an investment policy that could be decided at EU level, "she said. 

The chamber also wants the European Central Bank "to make sure that the euro is not so high against the dollar, which depends on interest rates but also the speech of his pre President ", and that Germany," who has no interest that the euro zone into recession, has a more cooperative approach and a policy based more on demand ".

These convergences with the program of Francois Hollande do not erase important differences, including the fate of the pension reform, corporate taxation and a possible "boost" to the minimum wage (SMIC).

But on these subjects, Laurence Parisot is rather conciliatory. She says well prepared to discuss the calculation of the minimum wage, wants the introduction of such a minimum wage in Germany and does not reject the idea of ​​framing the high salaries in the public enterprises.

CONTACT

"I can not tell you if a scale of 1 to 20 is good or not," she told BFM-TV and RMC. "But (…) I expect a lot from the President on this point (…) There is a balance to find." And estimate, again, that Francois Hollande is right to put the subject on the table, "because it is the social bond is at stake."

She confirmed on BFM TV and RMC officials that Medef already working with employees of successor Nicolas Sarkozy, who takes office Tuesday.

"I myself have met several members of the team of Francois Hollande," she added. "We are sweeping all subjects and at the same time (…) we are already working with the unions."

During the campaign, the candidate Holland announced his intention to convene in mid-July a national conference for growth and employment.

"The approach of Francois Hollande on social dialogue is very much that we have long advocated," said in Les Echos Laurence Parisot, who even considers "interesting" sound idé e of "generation contract". 

Nicolas Sarkozy, after betting on dialogue with unions to ensure social peace, has only had its share of stops during the presidential campaign to denounce the "intermediate bodies" charged tied up and threaten to appeal directly to the "people" by means of referendum.

Vallourec has revised downwards its growth forecast Thursday in turnover this year after beginning the exercise penalized by a demand remained weak markets as electrical energy and the automobile.

The producer of seamless steel tubes are now waiting for the current year to grow by about 5% of its turnover, while initially provided an increase of order of 10%.

In the first three months of the year, sales came out at 1.199 million euros, up 4% from first quarter 2011 but a contraction of 23% over the last quarter of 2011.

Its operating profit margin stood at 12.7% at end-March 2012, against 16.4% in the fourth quarter and 17.7% in Q1 2011. 

"What we see today is that the macroeconomic environment in Europe remains very uncertain and demand in markets outside oil and gas remains low," said Olivier Mallet , CFO of Vallourec in a conference call.

"(Demand) is well below our expectations at the beginning of the year," he added. "And if there was a slight rise in orders since January, it is below what was expected and visibility remains limited."

The group warned last February, on the occasion of the presentation of its annual results, expect a further decline in margin in 2012 due to the costs of de ; boot of his new plants.

Vallourec says still expect a "slight improvement" of its gross operating margin over the next three quarters, reaching a 15% margin over the full year.

At the Paris Bourse, the Vallourec share price closed before the quarterly earnings release, to 42.865 euros, up 1.46%.

General Motors announced Wednesday consider selling its manufacturing plant in Strasbourg gearboxes and be looking for potential investors.

The U.S. automaker, which has taken an investment bank, said in a statement it had committed a "strategic review" concerning both the production as engineering and development of this plant.

He was willing to explore the internal and external solutions to find "viable alternatives and potential solutions to secure the future of the site".

GM intends to favor buyers who will continue the work site with the current force is about 1,000 people.

Last year, the plant produced 280,000 six-speed automatics, mainly for customers outside of Europe. 

GM announced in February an alliance with French carmaker PSA Peugeot Citroen.

French banking stocks opened sharply down Monday on the Paris Stock Exchange, after the results of parliamentary elections in Greece and the presidential election in France.

In early trade, the shares agricultural, heavily exposed to Greece because of its local subsidiary Emporiki weighed down by losses, falling nearly 6%.

BNP Paribas and Societe Generale fell by more than 3.5%, underperforming the European banking index down by 1.18% at the same time. 

In Greece, voters, angered by the recession and austerity, were heavily penalized Sunday the two main parties, New Democracy (ND, right) and the Party Socialist (PASOK), and offered to the radical left a spectacular breakthrough in the risk of boosting debt crisis and questions about maintaining their country in the euro area.

In France, Socialist Francois Hollande, who plans to reform the banking system to protect customer deposits and make the market less risky activities, has won Sunday's presidential election, marking the return of the left in power.

European shares move in a disorganized mid-session after opening up while Wall Street is expected to have eased slightly.

In Paris the CAC 40 was down 0.15% (-4.99 points) to 3,418.82 points. In Frankfurt, the DAX rose 0.29% and London, the FTSE is virtually unchanged. The pan-European index Stoxx 50 was down 0.40%.

The index futures point to a New York opening spreads from Wall Street while the purchasing managers' index for manufacturing (ISM) will be published at 1400 GMT.

In Paris, Total continues to rebound and earn 1.27% after the announcement that British authorities will receive Monday representatives of the company to consider a proposal to send a team of experts on its platform of Elgin in the North Sea which had to be evacuated due to gas leak. The revelation of the leak on March 26 led to a drop of nearly 7% of Total's share price, the last week, despite a rebound of a , 06% Friday after the announcement of the termination of a flare which casts a risk of explosion of the installation.

PSA Peugeot Citroen fell by 3.77% after announcing a fall of 33.2% over twelve months of its new car registrations in France in March, while Renault sells 1 76% after a decline of 29.8% over the same period against -23.5% for the whole French market.

Cimpor jumped nearly 9% in mid-session after the announcement Friday by the second group of Brazilian Camargo Correa construction of its intention to launch a bid for 68.1% capital of the Portuguese cement that does not already own. 

Originally worn by an official index of purchasing managers in China better than expected and reassuring thought on the growth of the first Asian economy, some European equity markets are ironed in led by the red squares of the peripheral countries of the south.

Information from press reports that the Bundesbank planned to take over the paper in several countries, including Portugal, have weighed heavily on the places of southern Europe, before being denied by the Institute of German issue.

The acceleration of the contraction of manufacturing in the euro area in March, reinforcing fears of a recession within the bloc while the slowdown has spread to Germany and France, has also affected the trend.

The gas leak on a Total deposits in the North Sea will be expensive to French oil group, but the situation seems out of proportion to the oil spill in 2010 in the Gulf of Mexico after the explosion of a BP platform.

Analysts polled by Reuters, the cost for Total could be limited to $ 150 million (113 million) if the leak was quickly clogged, or otherwise be at least $ 10 billion if the platform of the Elgin-Franklin field eventually explode.

Total has not ruled on Tuesday that the repair takes several weeks or up to six months, and keen Wednesday the exact cause of the leak. 

The prospect of a distant deadline for resolving the industrial crisis, the worst that Total has seen since the sinking of the Erika in 1999 and the explosion at the AZF factory in 2001, brutally brought down the stock market as Tuesday. The stock has lost 5.96%, leading to the Group's market capitalization plunge of about six billion euros.

Total lost the title still nearly 1% to 38.23 euros on Wednesday afternoon.

"Although it is far too early to make a reliable assessment of the impact of the leak (…) for Total, one can estimate a minimum cost of 150 to 200 million dollars in the best case (limited to two weeks off) or even more if the current situation was to last several months, "CM-CIC Securities.

While the field of Elgin-Franklin alone accounted for 2.5% of total production in 2011, the intermediary also assesses the shortfall for the group between 3 , 6 and 5 million per day shutdown of operations. 

LESS STRICT LAWS IN THE UK

Drilling a relief well could cost him only $ 44 million, assesses his side Exane BNP Paribas.

Analysts at Bank of America Merrill Lynch, if an explosion had finally held, "the impact could reach $ 10 billion" for Total.

This amount includes the loss of deposits and the platform and nearly deus billion to clean up environmental damage, but excludes any fines.

Most observers point out however that the situation on the Elgin-Franklin field is not nearly as critical as that of the Deepwater Horizon, in the Gulf of Mexico, including the explosion and sinking had made eleven dead in April 2010 and resulted in a serious oil spill. 

In total, the British BP has had to make provision for $ 37.2 billion deal with the consequences of this accident.

While nine million barrels of crude oil escaped from the Macondo well drilled on behalf of BP after the accident, analysts point out that only gas and products "light" is e ; chappent the Elgin wells, which should significantly reduce pollution.

Some further notes that the economic activity of the British coast is less important than the U.S. states bordering the Gulf of Mexico and the United Kingdom has not yet introduced legislation involving sanctions as severe as those imposed by the United States in case of water pollution.

"We do not expect major Total incur fines or provisions that must pass (…) As important as those of BP in the case of Macondo, "estimated the Exane BNP Paribas analysts

." This kind of accident is often unpredictable and difficult to resolve. Nevertheless, we think the probability is low to see the leak reach crisis proportions comparable to Deepwater Horizon, "he wrote on his side Fitch ……. According

.. rating agency, Total should maintain its AA credit rating even in the event of complete closure of the deposit of Elgin.

Wall Street finished slightly higher Friday, supported by buoyant energy stocks in the face of surging oil prices, but the gains of the day do not allow the S & P 500 finished the week in the green.

This index, which is the benchmark for fund managers, posted a weekly decline of 0.5%, thus interrupting a series of five consecutive weeks of growth. However, since the beginning of the year, he won about 11%. Compared to a low of October, its progress is more than 25%.

The Dow Jones industrials gained 30 0.27% or 34.59 points, to 13,080.73. The S & P-500, wider, took 4.33 points, or 0.31%, to 1397.11. The Nasdaq Composite Index was up 4.60 point turn (0.15%) to 3,067.92.

For the week, the Dow has sold 1.1% while the Nasdaq posted a gain of 0.4%.

Despite the magnitude of the upward cycle bringing Wall Street for several months, most market participants do not believe the decline this week is the prelude to a more pronounced downturn.

They believe instead that the U.S. stock market should benefit next week cleanings portfolio at quarter end, which are usually fund managers trade shares with the sub- performed against those that have outperformed the market.

"Generally, people are well disposed towards the shares. They are ready to enter the market whenever there is a slight decline, "said Michael Matousek, a broker at Global Investors

.. Rising ……. daily was the fact the oil compartment, with the sector index gained 0.96%

…. ….. This is mainly due to the 1.5% jump in oil prices after the information saying that Iranian oil exports were down in March, the tightening of Western sanctions to against Tehran have led some customers to stop or reduce their purchases of Iranian crude

. values ​​related materials first turn have been supported by the good results of the largest copper producer Codelco. The sector index has been 0.98%.

The new home sales fell 1.6% in February to return to 313,000 on an annualized basis, said the Commerce Department, which has downgraded statistics January, to 318,000 against 321,000 originally announced. Economists polled by Reuters had expected 325,000 sales.

This indicator has sealed property values, the PHLX sector index yielded 0.57%. The action of KB Home fell 8.45% to 10.29 dollars after the number five in the construction of individual houses in the United States has reported a widening of its losses the first quarter.

The title Monster Worldwide has been 7.69% to 10.22 dollars after the agency offers online job, which has a market capitalization of approximately one billion dollars, has says ready to sell all or part of its capital.

Nike reported Thursday a profit above expectations for the third quarter of fiscal offset and an increase in its future orders.

But the title of the sporting goods company has closed down 3.22% to 107.42 dollars.

The objective of the British government to eliminate the budget deficit within five years is still valid, said Wednesday the finance minister, presenting a tight budget for the third consecutive year.

This budget, however, reduce the income tax and to accelerate the reduction of corporate tax (IS). These measures will be funded from the taxation of banks and wealthy landowners.

George Osborne added that the UK economy should avoid recession, says a new anticipate an acceleration of the recovery next year.

The growth rate of the UK economy is projected at 0.8% this year to 2.0% in 2013 to 2.7% in 2014 to 3.0% and the next two years.

The OBR had planned in November to 0.7% growth this year, 2.1% in 2013 and 3.0% in 2015 and 2016.

In terms of fiscal measures, the tax bracket of 50% for taxpayers whose annual income exceeds 150,000 pounds (180.000), introduced by the previous Labour government, will be reduced to 45% from April 2013, a move that will cost a maximum of 100 million pounds, said the Chancellor.

The minimum tax is increased to 9205 pounds of annual income (11,000 euros), an increase higher than expected, from April 2013 also.

The rate of corporation tax will be narrowed down from 26% to 24% next month and to 22% by 2014.

To fund these measures, a stamp duty of 7% will be levied on sales of land and property, above the two million pounds. In addition, the bank tax will be increased to 0.105% effective January 2013, so that the reduction of the SI does not benefit the banks.

DECREASE IN LOANS

The Office for Budget Responsibility (OBR) of the government projects a decrease in net borrowings to bring them back to 21 billion pounds for the year 2016-2017 as they totaled 126 billion over the year 2011 to 2012.

The new projection of the OBR is somewhat more optimistic than in November, when Chancellor of the Exchequer had to extend the package of austerity beyond the e elections of 2015.

The public sector debt and must reach a peak of 76.3% of GDP in 2014-15 before falling. 

"We are well positioned to meet this mandate and eliminate the structural current account deficit by 2016-2017," said the Chancellor of the Exchequer to Parliament on the occasion of the budget.

However, this deficit has reached record levels in February, reflecting a lower tax revenues and higher public spending.

Only a narrow majority of 15 out of 29 economists polled by Reuters had expected Tuesday that the coalition government to succeed in reaching its target of reducing the public accounts in balance, in structural terms at the horizon 2016-2017. 

They were 23 to consider that the debt ratio would have declined by that date and provided only a 25% probability of risk for the country to lose its precious triple-A, against 27.5% during a similar survey a month ago.

The Office of Debt Management announced that its part of the state debt would total 167.7 billion pounds in the 2012-2013 biennium, or about ten billion pounds less than when the previous year.

A Reuters poll gave 180 billion.

The Norwegian sovereign fund, the first equity investor in Europe, on Friday urged European leaders to fully address the structural problems of the old continent, but said he voted against the restructuring program of the Greek debt.

Presenting its results in 2011, the Government Pension Fund Global (GPFG), fueled by oil and gas bonanza of the Nordic countries, said he would prefer re a solution to the Greek case which does not favor some creditors over others.

"We voted against for reasons of principle," he told reporters Yngve Slyngstad, CEO of Norges Bank Investment Management (NBIM), a division of the Norwegian central bank manages the SWF. 

"As long-term investor, we believe it is important to stick to principles."

He stressed that the exchange process of debt expected in the second aid plan for Athens had not put all creditors on the same plan since the European Central Bank (ECB) received a preferential status.

The fund has also stressed the need to solve the current difficulties of the old continent.

"Because more than half of the fund is invested in Europe, it is very important to us that the authorities manage to solve their enormous monetary and structural challenges", a de ; Yngve Slyngstad clared in a statement.

The fund had 3.NOK 312 billion (439 billion) at December 31, against 3.055 billion kronor in late September.

The share of the fund invested in equities reached 58.7% at the end of last year, against 55.6% at the end of the third quarter. Yngve Slyngstad said the fund held 2.25% of the total market share in Europe.

He reported the purchase of more than 150 billion kronor (19.8 billion) of European values ​​on the second part of 2011.

In the fourth quarter, the fund posted a return on investment of 4.4% in the fourth quarter, ending on a positive note one year 2011 where the return on investment has reached -2.5 %, a loss of 11.4 billion euros.

In the third quarter, the return on investment reached -8.8%.