Danish shares close higher led by Danske Bank, DSV UPDATE |
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COPENHAGEN (Thomson Financial) - Share prices closed higher led by Danske Bank
after it was added to Goldman Sachs' 'conviction buy' list, and by DSV on sector
M&A talk.
The OMXC20 index closed 3.36 points higher at 495.83 and the OMXCB Benchmark
index added 3.61 points to 479.22.
The OMXC All Share index closed 2.96 points higher at 485.40 on turnover of
5.06 bln dkr.
Danske Bank closed 8 dkr higher at 239.25. The bank was added to Goldman Sachs'
'conviction buy' list, as the brokerage sees high earnings prospects combined
with a low valuation for the Danish bank.
Danske Bank is currently valued at its lowest one-year forward price/earnings
multiple in almost four years, Goldman Sachs said in a note to investors, adding
it sees a 28 pct upside to its 12 month price target.
Goldman Sachs said it expects Danske Bank to report a 7 pct quarter-on-quarter
growth in net interest income, driven by the full consolidation of recently
acquired Sampo Bank, and by strong underlying growth, when it reports second
quarter results on August 9.
Dealers said the comments benefited bank shares generally, with Nordea Bank
adding 1.25 to 88.5. Sydbank was up 5.5 at 270 and Jyske Bank rose 13.5 to 407.
Insurers Topdanmark rose 5 to 940 and TrygVesta added 2 to 435.
DSV rose 3.75 to 116. Yesterday, shares in peer TNT gained 2.44 pct amid market
speculation that the package delivery group is being eyed by its much larger US
peer FedEx. Dealers said this has lifted sentiment for the Danish stock.
AP Moller-Maersk A was up 500 at 66,900 and the B-shares rose 500 to 68,000
after Asian peers rose overnight on expectations of higher rates for container
traffic and by news that the Danish group's Odense Steel Shipyard Group has
agreed to sell its shipyard Volkswerft Stralsund GmbH to Germany's Hegemann
Group for an undisclosed sum.
But dealers said the rises were tempered by news that Societe Generale has
initiated coverage of AP Moller-Maersk with a 'sell' recommendation and a
12-month target price of 53,000 dkr, saying it sees the transport group as
expensive and sensitive to various risk factors.
AP Moller-Maersk's share price has increased by 50 pct since the past summer
and 'looks expensive on conventional measures', the brokerage said, adding its
estimates for the group are sensitive to changes in freight rates, oil prices
and foreign exchange rates.
Lundbeck was unchanged at 139.75. The pharmaceutical company is ready to make
acquisitions to compensate for its weak pipeline ahead of the patent expiry of
blockbuster depression drug Lexapro/Cipralex in 2012-2014, chief executive Claus
Braestrup told Danish daily Jyllands-Posten.
Lexapro/Cipralex makes up over 60 pct of Lundbeck's sales, and analysts have
previously called for the group to strengthen its pipeline through acquisitions
after it discontinued development of the drug candidates Gaboxadol and
Desmoteplase earlier in the year.
Braestrup admitted to the daily that his group is currently in a crisis, and
said it will buy drugs if they fit the group and can be bought for a fair price.
Novo Nordisk B fell 13 to 605 on profit-taking following recent rises.
Coloplast added 4.5 to 455.5.
Carlsberg B shed 5 to 667. In a note to investors today, Merrill Lynch repeated
that it sees Carlsberg buying its UK peer and BBH partner, Scottish & Newcastle.
It says a combination of S&N and Carlsberg is 'inevitable'.
The broker says a share price ratio above 115 seems to make sense, compared to
the current ratio of 107 - so, for example, if the S&N share price is 650 pence,
a bid only becomes likely at a Carlsberg price above 750 dkr a share.
'We calculate that Carlsberg could enhance its EPS by 22 pct if it acquires S&N
at a 700 pence price, raising the maximum amount of equity and assuming 1.25 bln
dkr synergies,' Merrill Lynch said.
Dealers said there was little new in the note.
Novozymes fell 2 to 677 following a steady share price increase in recent days.
The RB-Boersen news agency said, citing Nordea, that the current focus on
bioethanol has increased investor interest in the enzymes maker, but added that
the potential for bioethanol looks somewhat overvalued in the short run.
Danisco rose 6.5 to 421.5.
Among other stocks traded today, Vestas Wind Systems was 1.5 higher at 370.5,
William Demant Holding added 3 to 553, GN Store Nord was up 1.25 at 66.25 and
FLSmidth rose 2.5 to 442. michael.delaine@thomson.com mdl/lam
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