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Tuesday 02nd of December 2008
January 11, 2007

European banks higher as bids rumors circulate


by Elaine Frei

The FTSE Eurofirst 300 was up significantly on Thursday, adding 1.8 percent to close the session at 1,503.93.

Banks were higher on bids rumors and broker comments. After Dresdner Kleinwort implied that there was a possibility of merger activity in the Spanish banking sector, Santander and BBVA were both higher. Santander added 1.3 percent to €14.30, while BBVA gained 1.7 percent to €18.73. Swedbank as 5.2 percent higher to SKr262.50 when UBS repeated its “buy” recommendation and upped its target share price from SKr265 to SKr300.

Stock exchanges also did well on the session. Euronext added 3.8 percent to €98.50 on approval of its plans to merge with the New York Stock Exchange. Meanwhile, Deutsche Borse gained 6.3 percent to €150.20 on talk that it could also merge with an exchange operator in the US. The Chicago Mercantile Exchange has been mentioned as a possible merger partner.

Roche was 2 percent higher to SFr230.70 on higher profits in the fourth quarter by Genentech, in which the Swiss pharmaceutical company is majority stockholder. Genentech’s fourth quarter profits were up 75 percent on demand for its cancer drugs and higher sales of a new treatment for blindness in older patients.

In the aerospace sector, EADS added 0.8 percent to €25.26 even though UBS reduced its recommendation from “neutral” to “sell” and warned that shareholders earnings could be diluted by a possible equity issue by the company.

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