Financial News Headlines

The European Central Bank Thursday raised its growth forecast for 2010 and 2011 and revised slightly upward its projections for inflation in the euro area for two years.

The new forecast of the change in gross domestic product (GDP) Sixteen this year is between 1.4 and 1.8% from 0.7% to 1.3% previously, which gives mid-range a projection of 1.6%, 0.6 percentage points better than the previous estimate in June

For 2011, the forecast has also been revised up, but less sensitive.The new range gives 0.5% to 2.3% growth, or a midpoint of 1.4%, against +0.2% +2.2% (+1.2%) previously.

Last month, the European Commission said he expected growth of 0.9% in 2010 and 1.5% in 2011.

"The range of real GDP growth this year has been revised upward due to stronger than expected rebound in economic growth in the second quarter and better than expected trends observed during the summer months," he said ECB president Jean-Claude Trichet at a press conference.

"For 2011, the band has also been revised up to reflect mainly the lingering effects of the stronger growth expected in late 2010," he added.

The ECB also revised up slightly its forecast for inflation, but even in the new situation it would still be under control in 2010 as in 2011.

Inflation is now expected between 1.5% and 1.7% this year and between 1.2% and 2.2% in 2011. In both cases, higher prices would remain consistent with the ECB target of inflation below but close to 2% of that figure.

The previous range gave +1.4% to +1.6% in 2010 and +1.0% to 2.2% in 2011.

The estimate of 25 billion euros for the final bill of Anglo Irish Bank bailout is essentially correct, Reuters said Tuesday its chief executive.

Anglo Irish was the third listed bank in the country before the financial crisis. The state was saved from bankruptcy last year, which led him to view the last year the largest deficit of the European Union. Since then, the bill continues to rise.

The solution that favors the government in Dublin is to separate the "good" "bad" assets of the group.These activities allow the healthiest to recover while relegating some of the risky assets (which accounted for half of its balance sheet approximately), in an ad hoc and the other party in the "bad bank" created by the state, the NAMA (National Asset Management Agency).

Transfers to the NAMA could be done with a discount of over 50%, acknowledged Tuesday the Director-General Mike Aynsley.

"We think it is probably fair to return to a level of 60-65% haircut on the assets of the NAMA given the level of provisions," he said.

Anglo Irish on Tuesday reported a loss of 8.2 billion euros in the first half, which includes 4.8 billion of impairment charges and a loss of 3.5 billion related to the transfer of 10.1 billion in assets the NAMA negotiations.

BHP Billiton Sunday downplayed the likelihood of an increase in its offer to purchase approximately 30 billion euros in Potash saying he chose to launch its offensive, a period during which her main rivals are weak.

The mining group finance director, Alex Vanselow, interviewed by Australian TV channel ABC, has said the group had also taken into account to improve access to credit.

"The opportunity that Potash was the fact that we are now in a situation such that our balance sheet allows us to increase the funds necessary to buy as valuations and that are, in essence, if we look at the situation of competitors, they are not in the same situation as us, "he said.

"So, after taking into account all these factors, we find that the time is right to make an offer."

BHP on Wednesday its biggest first-half profits for two years and its debt ratio should not exceed 6%, which puts him in a strong position to raise its bid if necessary.

Potash was trading action this weekend 14% above the offer price, investors believed that BHP will raise its prices to convince their target or another pretender to the redemption will occur.But Alex Vanselow said that BHP did not need to increase its offer to $ 130 per share.

"There is an offer on the table, why we would enter into competition with ourselves?" He concluded.

Rio Tinto, BHP's chief competitor in the world, is considered poorly positioned to embark on the adventure because of the huge debts incurred to buy Alcan three years ago.Since this operation of 38 billion dollars, Rio says he will only consider acquisitions of limited size.

As for the Brazilian Vale, that also shows its ambitions in potash, he assured not to be interested in Potash.

Some observers believe that cons-offer could come from China, world's largest importer of potash, one key component of fertilizer.

Thursday Sinofert Holding, the largest distributor of fertilizer Chinese expressed concern about the proposed BHP but did not specify whether its parent company, Sinochem, was considering a bid-cons.

* Data on StarMine potash producers:

r.reuters.com/meh36n

* Data on StarMine major mining groups: r.reuters.com/dyc27n

* Graph of recovery of the offer from BHP:

r.reuters.com/ruv65n

Mergers and acquisitions announced this month totaled 200 billion dollars but this is not enough to trigger a sustainable rebound major exchanges, gained by strong fears of a significant slowdown in global growth.

At best, mergers and acquisitions – aided by interest rates fell to record low, stocks cheap and well furnished corporate treasuries – could limit the decline in equity markets, investors seeking to take positions in the securities of potential targets.

Another factor militating against an increase in mergers and acquisitions: the risks of job losses in a context of high unemployment and their possible impact on demand for those same companies.

The slowdown in the United States was confirmed Friday by publishing a revised estimate of GDP in the second quarter well below the previous, or 1.6% annualized 2.4% cons.

The companies comprising the U.S. Equity Index S & P 500, which have cut costs dramatically since the beginning of the economic crisis in late 2007 and early 2008, ended the second quarter with record cash – 1,630 billion dollars in total, according Thomson Reuters Worldscope.

"The balance sheets of companies have seldom been filled," said Alain Bokobza, head of global asset allocation at Societe Generale.

Those companies looking to boost their sales in an anemic economy, have caused turmoil in the month of August, usually the quietest of the year in terms of M & A.

CHINA ALSO

According to Thomson Reuters data, the transactions announced in August totaled $ 200 billion, the third best month of the year in terms of funds committed.

Among the most important, there are hostile bid from BHP Billiton on the Canadian Potash (39 billion dollars), the supply of Intel on McAfee ($ 7.7 billion) and equity of Vedanta Resources for 9.6 billion in Cairn India.

Added to the battle waged between Hewlett-Packard and Dell to capture 3PAR, offers now reached two billion dollars.

If at this stage this year, the total amount of M & A is greater than 20.6% that of 2009, it is less than half that of 2007 when stock markets were up sharply.

The crisis of sovereign debt in the eurozone and the return of concerns for global growth have saddled the equity markets and boost bonds whose yields have fallen to record low.

"For now, the dominant factor for the markets is the slowdown in growth in the United States and China," said Alain Bokobza, who notes that mergers and acquisitions are mostly limited to the mining and technology sectors.

Analysts point out that if the transaction amounts are significant, they were few in August – 1863 against 2961 in August 2009.

According to the professionals interviewed, the new wave of M & A reflects a concern among companies on the growth of their sales and also raise fears of negative effects on the employment situation.

"When I hear 'M & A', I think loss of jobs," said Kim Caughey, analyst at Fort Pitt Capital Group in Pittsburgh.

"When you see the size of current acquisitions, I would not be surprised to see unemployment rise," he added.

Publicis entering the final phase of its negotiations to buy a share in the Brazilian advertising agency Talent, number one in his country, the Financial Times reported Thursday.

The agreement, in the form of a joint venture that could be finalized in early September, adds value to Talent approximately 200 million dollars (157 million euros).

WPP, the world of advertising sales, considered investing in talent but should present no cons-offer, the FT added.

The agreement would give Publicis, world number three, access to the 200 employees of talent and clients including Sony and Santander.

Publicis could not be reached immediately.

The values of the day on Tuesday when the Paris Bourse's CAC 40 closed down 1.75% to 3491.11 points:

* TOTAL (-1.64% to 37.40 euros), BNP PARIBAS (-2.13% to 50.57 euros) and SANOFI-AVENTIS (-2.36% to 44.745 euros) were the main contributors to the CAC 40 down.

* The values of the building showed the largest declines the CAC 40, affected by a "profit warning" of the Irish CRH. SAINT-GOBAIN, largest decline, fell 4.71% to 28.955 euros and Bouygues backed off from 3.26% to 32.045 euros.

LAFARGE has lost 4.35% to 36.465 euros, BofA-ML has lowered its recommendation to "underperform" cons "hold".The European index Stoxx 600 Construction (-4.12%) registered the largest decline sector.

Also related to the industry, Schneider Electric has dropped 3.95% to 84.19 euros.

* LAGARDÈRE signed the strongest of the few increases in the ACC and made 0.9% to 27.945 euros while the media group to publish its interim results after market close Thursday. According to several analysts, the title could be sought because of the good surprises awaited by the market at this publication.

* Danone has advanced 0.66% to 41.77 euros.The group confirmed it had acquired the company Immédia number three French juice mixed with fruit (smoothies), whose turnover is around four million euros to complete his fruit cluster.

* Accor has also advanced (+0.3% at 23.43 euros), following the announcement of the sale of walls 48 of its hotels in Europe for $ 367 million in Predica insurance subsidiary CREDIT AGRICOLE (-1.18% to 10.045 euros) and ESTATE OF WALLS (-0.99% to 17.03 euros), a subsidiary of ESTATE OF REGIONS (1.76% to 70.72 euros).

* EDF ENERGY NEWS (-4.77% to 30.155 euros) registered the largest decrease of DTH.Ministries of Economy and Ecology announced Monday a 12% decline in the price at which EDF will acquire photovoltaic electricity, except for individuals, from 1 September.

France will do "everything necessary" to bring its deficit to 6% of GDP in 2011, said Christine Lagarde in an interview with the Financial Times.

The economy minister told the newspaper of the City dated August 23 that the revision from 2.5 to 2% growth forecast will be based on which the budget in 2011, which was recorded at a meeting last Friday around Nicolas Sarkozy in the south of France, was "feasible and prudent" and not too optimistic as claimed by many economists.

The government, she said, is determined to do "everything necessary" to reduce the deficit in France from 8 to 6% of GDP in 2011 despite the revised growth down, with its implications on revenue state.

"It's a commitment very, very strong from the president and the government," said Christine Lagarde.

The objective is to reduce the deficit to 3% of GDP in 2013, five points below the level expected in late 2010.

The effort required on costs to compensate for lower tax revenue will be 10 billion euros in 2011, which will blow a plane to loopholes in the tax and social rather than by increases in existing taxes.

In an interview with Le Figaro to be published Monday, the budget minister Baroin confirms that the public deficit back to its level before the crisis is a priority and the planing of tax and social niches will save the public and preserve the fragile family policy.

The titles of the biggest names European food and beer fall sharply down due to soaring grain prices caused by the decision of Russia to stop its exports.

The European index combining the values of agribusiness is one of the few to be down, falling 1.64% to 10:20 GMT, the pan-European index Stoxx Europe 600 0.29% gain.

"The industry is declining due to wheat prices, which will weigh on corporate profits," said a broker.

The Brewers are most affected by the surge in: Danish Carlsberg fell 4.7%, Dutch Heineken 3.4%, Belgium's InBev AB of 3.2% and Britain's SABMiller lost 1.81%.

The big names in the food are much better off: 1.27% yield Nestle, Danone and Unilever 1.27% 1.79%.

The current drought in Russia, one of the worst in the history of the country, devastated crops in many regions, causing a surge in wheat prices on international markets.Thursday, Moscow had announced a temporary suspension from the August 15 grain exports and agricultural by-products due to poor harvests.

Investors fear of severe stress on the grain markets over the coming months in the absence of a major world exporters.

In one week, the price of wheat in Chicago recorded a jump of 25%.

On the occasion of the publication of its quarterly results Thursday, Unilever has rightly said that the second half would be more difficult because of the cost of raw materials.

The Franco-Belgian bank Dexia publishes a net profit decline of 12.4% in the second quarter of 2010 at 248 million euros but is superior to the expectations of analysts thanks to lower provisions and a deferred tax.

The group said in a statement that its provision for credit losses were reduced by more than two in the period and quarterly accounts have received a tax credit of 30 million euros, offsetting a decline of 16 , 5% of its revenues.

The consensus reached by Inquiry Financial expected a general decline in net profit by 28% to 205 million euros for the second quarter.

With a decline in earnings, the results of Dexia contrast with those of other European banks, which have generally reported sharply higher profits even if investors are skeptical about the quality of bank accounts.

Last February, Pierre Mariani, managing director of the group, warned that 2010 would be a more difficult exercise for Dexia as 2009.

The bank had at that time that it would focus on controlling costs to maintain profit margins.

Forced to restructure after being rescued from bankruptcy in fall 2008 by the Belgian State, French and Luxembourg, the bank has been out since late June of the machinery of government guarantees for its financing needs.

In return for the aid received during the financial crisis, it also agreed to divest subsidiaries in Italy, Spain and Slovakia as well as its insurance activities in Turkey.

This weight loss program should enable it to fulfill its commitment to reduce by 35% the size of its balance sheet by 2014.

The Dexia share closed Thursday at 3.965 euros (+0.2%). Year over year, it is down 26.54% and shows a decline of 7% since January 1, underperforming the Stoxx 600 index of European banks (3.25%).

Time Warner raised its earnings forecast for the whole year after recording the largest increase in sales over the past two years thanks to a recovery in advertising revenues and success in films like the "Clash of Titans.

The revision of targets and the media giant's quarterly earnings above expectations could help to alleviate short-term fears about the uncertainties on the economic rebound affect the advertising market.

"The third quarter looks solid even if the economy seems fragile," said Tom Egan, an analyst at Collins Stewart.

Time Warner has seen its sales grow 8% in the second quarter to $ 6.4 billion while analysts were waiting to 6.2 billion according to Thomson Reuters I / B / E / S.

Earnings per share (EPS) adjusted for the quarter stood at 50 cents, five cents more than expected.

Advertising revenue grew 14% and 11% higher spring solely for the activities of cable television, which include CNN, HBO and TNT.

Investors remain cautious, however, for 2011 on the media sector, which will face the bases of comparison on a year less favorable.In 2010, advertising revenues have been boosted in particular by the Winter Olympics, and analysts expect that the U.S. enjoys in the fall campaign for the midterm elections.

"We believe that we should not overly excited yet," warns Fred Moran, an analyst with Benchmark. "The question of sustainability of the overall economic situation and consumer demand remains unresolved."

EMBELLIE FOR CINEMA AND MAGAZINES

On Wall Street, the Action Time Warner gained 1.3% to 4:20 p.m. GMT, the Dow Jones up 0.5%. In the media sector, took CBS and News Corp. 2.7% 1.5%.He was to publish its own results after the close of U.S. markets.

Time Warner now expects growth of at least 20% of its current earnings per share throughout 2010 compared to $ 1.83 posted for 2009. Previously, he spoke up about 15%.

Analysts expect an average annual EPS of $ 2.22 according to Thomson Reuters I / B / E / S.

In the second quarter, the entertainment division of the group, which includes Warner Brothers, saw its revenues grow 8% to 2.5 billion.Time Warner highlights the success of "Clash of the Titans" and the "Sex and the City 2".

The turnover of magazines that include People, Time has remained stable at $ 919 million, but advertising revenue in the division rose by 4%.

"The resumption of advertising, of course, helped to restore momentum to the growth of Time Warner," said Fred Moran (Benchmark) to buy on value.

The second quarter net for Time Warner net income of $ 562 million (425 million), or 49 cents per share, against 524 million (43 cents / share) for the same period last year.