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Thursday 18th of September 2008
September 15, 2006

DaimlerChrysler lower on profits warning


by Elaine Frei

The FTSE Eurofirst 300 ended the week up 1.2 percent with a gain of 0.3 percent on Friday to close at 1,373.33. Car and truck makers were the center of attention for most of the week.

DaimlerChrysler dropped 5.6 percent on Friday to €39.18, and fell 2.4 percent over the week, after it cut its prediction for full-year operating profits by €1 billion, due largely to losses in the Chrysler division in the United States. It said Chrysler’s third quarter loss alone could be as high as €1.2 billion due to a decreased demand there for sports utility vehicles.

Elsewhere in the sector, the possibility that MAN will make a bid for Scania sent shares in those companies, and in Scania’s major shareholders, higher. Volkswagen, which votes 34 percent of Scania’s shares, was 4.6 percent higher this week to €65.01. Holding company Investor, with 19 percent of Scania’s shares, was 8.1 percent higher over the week, to SKr153.00. MAN added 7.6 percent to €64.00, while Scania B shares gained 17.6 percent to SKr424.50.

Elsewhere, German tire and auto parts manufacturer Continental was up 7.4 percent to €86.00 after the announcement of a proposed regulation change in the United States called for anti-roll mechanisms in all new cars by 2009 and electronic control stability technology in all cars by 2012.

In the banking sector, rumors that Bank of America is thinking about bidding for ABN Amro sent the Dutch bank 4.6 percent higher to €22.50.

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