Tuesday, 26 November 2013

European Stocks Decline as Remy Cointreau, Pernod Retreat

By Jonathan Morgan - Nov 26, 2013 6:31 AM PT

European stocks dropped, following a two-day gain, as Remy Cointreau SA (RCO) and Pernod Ricard SA dragged food-and-beverage makers lower.
Remy sank the most since March 2009 after forecasting that annual profit will decline by at least 10 percent. Repsol SA advanced 5 percent after the governments of Spain and Argentina reached a preliminary agreement to compensate the Madrid-based oil company for its stake in YPF SA. Algeta ASA rallied the most in more than two years after saying that Bayer AG has started talks to buy the Norwegian company.
Frankfurt Stock Exchange Financial traders monitor data on computer screens at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
The Stoxx Europe 600 Index slipped 0.4 percent to 323 at 2:29 p.m. in London. The equity benchmark has surged 15 percent this year as central banks around the world pledged to leave interest rates near record lows for a prolonged period.
“A small consolidation is taking place on the back of a few disappointing earnings reports in the beverage sector,” Ion-Marc Valahu, a co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail. “So far it only looks like a short-term pull back.”
U.S. equity markets will close on Nov. 28 for the Thanksgiving holiday. The VStoxx Index, which measures expected volatility on the Euro Stoxx 50 Index using options prices, slid 1.2 percent today.
National benchmark indexes declined in 13 of the 18 western-European markets. The U.K.’s FTSE 100 retreated 0.5 percent, France’s CAC 40 slipped 0.2 percent.Germany’s DAX decreased less than 0.1 percent.

Remy Slumps

Remy slumped 8.6 percent to 65.78 euros after the maker of Remy Martin cognac forecast that profit will drop in its financial year through March, with trading worsening in the next six months, because of lower sales in China. The company said that its distribution network in the world’s second-largest economy had high levels of inventory. Chief Executive Officer Frederic Pflanz said on a conference call that profit may fall 20 percent.
Pernod Ricard and Diageo Plc, Remy’s larger rivals, retreated 2.8 percent to 84.16 euros and 1.5 percent to 1,970.5 pence, respectively.
Banca Monte dei Paschi di Siena SpA slid 5.7 percent to 18.4 euro cents after its board decided to increase a rights offer to 3 billion euros ($4.1 billion). The bank had planned to raise 2.5 billion euros through the share sale, which it intends to complete by the end of of the first quarter of 2014.
Hugo Boss AG slipped 1.9 percent to 97.23 euros after the German luxury-clothing maker controlled by buyout firm Permira Advisers LLP predicted that it will miss a 2015 target to achieve a 25 percent margin based on earnings before interest, taxes, depreciation and amortization.

Repsol Gains

Repsol climbed 5 percent to 19.37 euros after ministers made a new offer to compensate the oil producer for the 51 percent stake in YPF seized by Argentina in April 2012. The Spanish oil company in June rejected an offer of assets valued by Argentina at $3.5 billion plus a further $1.5 billion to develop the project, according to a regulatory filing.
Algeta ASA surged 32 percent to 350.30 kroner after the Oslo-based drugmaker said it has received a preliminary acquisition proposal from Bayer AG for 336 kroner ($54.87) a share. Algeta said in a statement that the German company’s proposal does not guarantee a deal will take place. Bayer slipped 0.1 percent to 95.98 euros.
In the U.S., the S&P Case-Shiller index of property prices in 20 cities rose 13.3 percent in September, more than the 13 percent forecast by economists surveyed by Bloomberg. The gauge of house values increased 12.8 percent in August.
A separate report at 10 a.m. may show that confidence among U.S. consumers increased in November. The Conference Board’s index rose to 72.6 from 71.2 in October, according to the median forecast in a Bloomberg survey of economists.
To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net
To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net