Nestle, the biggest company by market capitalization in Europe, will receive 28.1 billion dollars by Novartis in the second half of the year from the sale of its majority stake in Alcon – manufacturer of cleaning products for contact lenses. Thus, Nestle will have more cash than Google, which has had its accounts at the end of March, 26.5 billion dollars. The funds will allow the Swiss company to buy the cash almost every public company in the sector. The only public companies for food and drinks with a market capitalization of more than 28.1 billion dollars are Coca-Cola, PepsiCo, Unilever, Kraft and Groupe Danone SA. Nestle will invest the proceeds in his business or make acquisitions, said last week Jim Singh, chief financial officer of the company. Investors want the company to undertake expansion of emerging markets to catch up with Unilever, which realized about half of its sales in developing countries. “They’re definitely behind in these markets,” said Wendy Treviso, fund manager at Thornburg Investment Management, whose investment in the company amounted to 700 million dollars. Nestle Forecasts indicate that over the next 10 years about 1 billion users in emerging markets will be able to afford her products. Nestle gets about a third of their revenue from these markets, Chief Executive Paul Balk aims to increase this share to 45% within a decade.
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Extremely poor sales figures of new homes in the U.S. in May, with sales of shares covered the stock exchanges in Asia and Europe, U.S. indexes drowned at the beginning of today’s session. Trading was volatile and in anticipation of the interest the Fed decision, which will be released at 21:15 am local time. The majority of economists expect the U.S. base rate to remain at historically low levels in the range of 0 to 0.25% for the fragile state of the economy. Even more important will be updated projections of the U.S. central bank for the country’s economic prospects, which will provide guidance on the direction of U.S. economy. The index of 30 largest companies and traded on Wall Street Dow Jones Industrial Average lost 0.3 percent to 10 266.62 points and a half hours after the start of the session. Broader S & P 500 in turn sank by 0.5% to 1 089.65 points, mainly under the weight of sales in the extractive and energy sectors. Technology companies fell 0.6 percent to 2 points 247.8 index for all companies by the exchange Nasdaq – Nasdaq Composite. Yesterday’s session brought three index decreases due to poor performance of the energy sector. The reason for this was the news that the administration of President Barack Obama plans to introduce new rules to regulate the sector because of the accident with BP oil rig in the Gulf of Mexico.
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The investor confidence in Eastern Europe rose in May by region seemed remains untouched by concerns about euro in Western Europe, where levels of government obligations generally exceed those in EU member countries with developing economies. Index reflecting the expectations of analysts and investors in Eastern Europe over the next six months rose by 7.2 points to 35.2 points in May. This study shows the institute ZEW and Erste Bank, quoted by Bloomberg. In January, the index had reached its highest level at 59.1 points. “The region of Central and Eastern Europe seems to be the only one who is only partially affected by the uncertainty relating to the debt crisis of some countries using the euro as their currency,” the report said the two institutions. On May 19, the euro fell to a four-bed against the dollar, reflecting investor concerns about expansion of the Greek debt crisis among other countries of the Old Continent. For the initiated in previous days crash of the single currency and then contribute the decision by Germany to limit short sales in the country, which increased the negative sentiment against the single currency. Greece (which the report is not considered part of Eastern Europe, or at least not as countries with developing economies in the region), Spain and Portugal, logically raise the greatest concerns among investors. Conversely, as the indicator, the fastest growing confidence in Poland, the index for the country increased by 15.9 points in May to 37 points after a fall of 15 points the previous month. Slovakia indicator grew by 10,3 percentage points to 38.3 points and a Republic is an increase of 8.3 points to 40.4 points.
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The pessimism of investors returned with full force on stock exchanges in Greece and Europe, after fears that Greece will go bankrupt, have increased the yield of ten-year Greek government bond to 7.6 percent. This is a record of the creation of the euro zone 11 years ago. This raised the risk premium and a ten-year Greek government bond to a new highest historical value of 448 basis points. This means that Greece has to pay interest on its bonds by 4.48 percentage points above that which the German government pays on its government bonds. The main measure ASE Greek stock slid 3.1 percent to 1 926 points, after swaps from bankruptcy protection in the country jumped to a record 430 basis points. Greek banks were among the losing stocks, led by the largest representative sector, National Bank of Greece, whose shares fell more than 7 percent. Falling prices of Greek government bonds is problematic for Greek banks because they are an essential tool used by them as collateral for refinancing operations of the European Central Bank. Selling stock exchange index dropped significantly in the Old continent, the common European index Dow Jones Stoxx Europe 600 lost 0.9 percent to 266.28 points. This is the strongest its decline for the past six weeks, but the beginning of this year, he still added 4.9 percent to its value. The index of blue chips in Britain’s FTSE 100 fell 0.9 percent to 5 712 points despite good news for British industry, which has seen significant growth in February. Were encouraging and the data for the appreciation of homes in March, whose prices are 5% above last year’s levels.
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Largest car company in the world, Toyota has found a defect in the brake pedal to accelerate to around 1,8 million of its cars in Europe, cited by New York Times. The Japanese company will withdraw the problematic vehicles over the next few months from market. A similar problem was found with models of Toyota in the U.S. and China, the total number of affected cars is outnumbered 9 million. Among the models in Europe, where defects are established, enter Yaris, Corolla and RAV4. Yesterday it became clear that Toyota will withdraw from the sale even 1,1 million cars in the U.S. and will stop production of eight popular models in the U.S. market in the U.S. and Canada. Previously, the management of Toyota said that 2,3 million vehicles in the U.S. have a problem with the pedal to accelerate. Another 5 million cars have a manufacturing defect resulting in the accelerator can be blocked.
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Unemployment in the euro area rose to its highest value of establishing a monetary union in January 1999, says statistics from Eurostat. The indicator for September increased by 0.1 percentage points to 9.7%, as were the expectations of analysts. A year ago, unemployment was 7.7%. Across the European Union level indicator has also increased by 0.1% to 9.2%, a record since 2000 when the statistical office has begun to report aggregated data. The number of unemployed is the EU grew by 286 per month to 22.123 thousand million euro only people without permanent employment for 15.324 million, as compared to August the number rose by 184 thousand
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Volkswagen has announced that sales for September, and globally have increased by 11.9% over the same month last up to 615 thousand cars. As best present in the home markets of Germany and China, where in September were first sold more than 1 million cars per month. The company announced that next month plans to hold a meeting of shareholders to seek approval to issue 135 million new preferred shares to the value 10 billion as part of taking over Germany’s group for production of luxury cars, Porsche. Under the deal with Porsche Volkswagen will pay 3.3 billion euros for 42-percent stake in the manufacturer of sports cars.
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The European stocks today reported the strongest decline in a week following the unexpected drop in investor confidence in Germany. Shares in Barclays fell by 3,4 percent after analyst Meredith Whitney lowered its assessment of Goldman Sachs Group to “neutral” and spoke favorably about the banking sector. Total banking sector represented in the index Dow Jones Stoxx 600 fell with 1,3 per cent. Dow Jones Stoxx 600 fell 1% to 241.94 points as all 19 industry groups in the pan-European index retreated. Analysts commented that, once achieved, high levels of the indexes, any disappointing economic statistics could upset the market. Investors will look for signs of recovery in sales data in corporate reports. The CEO of Deutsche Bank Josef Ackermann told a news conference yesterday that the global financial industry and the economy remained “fragile” because of the risk of corporate bankruptcies and rising unemployment.
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The Bankruptcy in practice banks and financial institutions and consumer debt will be a strong brake to the U.S. economic recovery. That said billionaire and founder of the foundation Open Society Institute George Soros. The Economic recovery will be very slow, “said renowned investor who participated in the meeting of the International Monetary Fund and World Bank in Istanbul. Banks in the U.S. quasi lost 1.1 trillion. dollars since the financial crisis began in late 2007. Soros’ expectations are that Europe will achieve faster economic growth, which opinion differs with that of the IMF. Last week, the fund said growth in the U.S. will be 1.5 percent for 2010 while the euro area – five times less. Severe recession even more easily pass through Europe, the ECB can be more quickly completed with the policy of stimulating than the Fed added the economist, even as the U.S. is too early to speak.
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Gazprom may ask users in Europe to pay fines because of reduced consumption during the year. According to the rule enshrined in the treaties “take or pay”, the countries which receive gas from Russia, may be penalized if their consumption falls below agreed levels. Industrial demand for natural gas in Europe has fallen sharply because of economic crisis. The overall decline, including in Bulgaria, nearly 30 percent. According to Russian Economic edition of Kommersant, Gazprom may seek penalties of European consumers totaling 2.8 billion dollars, BNR. The penalty is enshrined in the treaties that govern what amounts previously natural gas wants to buy each country. When the difference between stated and actual consumption, the Russian gas monopoly has the right to impose fines. According to Kommersant, all European companies are against the payment of penalties, while motivated by concessions to Russia to Ukraine and Turkmenistan. At the beginning of this month, Vladimir Putin and Yulia Timoshenko Kiev agreed to pay only the actual consumption, and Russia get away with penalties after suddenly reduced by 90 percent purchases of Turkmen gas.
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