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Good morning,
Markets are called to open flat this morning. This is what's happening today:
Companies in Europe reporting results today: ABB, Zurich Insurance, BNP Paribas, Nestle, EDF, Air Liquide, Pernod-Ricard, Renault, Rio Tinto, KBC Groep, Clariant, Aurubis, Gjensidige Forsikring, Actelion, Oriflame, Solvay, SBM Offshore, Coca Cola Hellenic, Shire, AMEC, Rolls-Royce, Halma, Pennon, Mobimo, Petroleum Geo, Suez Environnement, Imerys, Publicis, Iberdrola, Randstad, Hufvudstaden, Legrand, Rheinmetall, Gerresheimer, Puma, Carl Zeiss Meditec.
BNP Parisbas just reported results. Unlike Societe Generale, the Company reported a profit however, the results were disappointing. BNP, France’s largest bank, posted a 33 percent decline in fourth-quarter profit, missing estimates, on a goodwill writedown at its Italian branch network and an accounting charge tied to its own debt.
Looking at the positive side of the results, BNP posted net income even as competitors such as Deutsche Bank AG, Barclays Plc and Societe Generale reported losses on reorganization costs and litigation expenses. In 2012, BNP Paribas also increased deposits from mid-size and large corporate clients by 18%. BNP Paribas’s core Tier 1 ratio under Basel III rules hit 9.9% at the end of December, up from 9.5 percent three months earlier. Societe Generale, France’s second-largest bank by market value, yesterday confirmed that it intends to reach between 9% and 9.5% by the end of this year. The Company plans to increase its dividend to 1.50 euros a share from 1.20 euros a year earlier.
BNP Paribas shares advanced 34% to 45.85 euros in the past 12 months in Paris trading, giving the bank a market value of about 57 billion euros. That compares with a 14% gain in the Bloomberg Europe Banks and Financial Services Index of 40 companies.
Rio Tinto Group, the world’s second-largest mining company, swung to its first full-year loss in at least in 21 years after taking a $14 billion one-time charge on the value of its aluminum and coal businesses. The loss was $3 billion in the 12 months to Dec. 31, from $5.8 billion profit a year ago. However, the result beat the average forecast loss of $4 billion of seven analyst estimates.
Rio rose 2.3% to A$72.07 at the close of trading in Sydney. The key S&P/ASX 200 Index gained 0.7%. Rio’s shares rose 9.5% last year, compared with a 7.8% gain for BHP, the biggest mining company.
Barclays are overweight on Rio with a price target of GBP40. This is what they said after the results, 'We believe investors should remain Overweight for now due to our positive view on iron ore near term combined with the potential for the company to return capital at the FY12 results in mid-Feb. We believe Rio has the ability to re-rate itself by taking its dividend yield above 4% and attracting income funds via a convergence of FCF and dividend yield. This has been aided by the moves in the iron ore
price: as such Rio’s spot earnings has risen 54% since the start of December. Meanwhile the company is delivering some attractive near-term organic growth, bringing capex and costs down and de-gearing rapidly. The risk remains essentially around the iron ore price.'
ABB Ltd., the world’s largest maker of power transformers, reported earnings which beat analyst estimates and said it will continue to focus on cutting costs this year amid an uncertain economic outlook.
For more information on BNP, Rio Tinto and ABB or other stocks and bonds, contact our offices on 25688688.
Good day and happy trading!
Kristian Camenzuli
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