Business News & Financial News

Fitch Ratings said Wednesday it lowered its rating on Cyprus of "A-" to "BBB", but considered likely that the country has to rely on outside help to ensure its funding needs.

The rating agency said its new rating, which is attached a negative outlook, taking into account the fiscal slippage and expectations of seeing the country no longer have access to capital markets during the second half of 2011.

Fitch added that it could deteriorate further note of Cyprus about new fiscal slippage and a lack of political will to implement austerity measures.

Fitch is the decommissioning of a few weeks after those of Moody's and Standard & Poor's.

The new Cypriot government on Wednesday introduced an austerity plan of 600 million euros, consisting mainly of tax increases, to reduce the public deficit to 2.5% of gross domestic product (GDP) in 2012.

The slide in equity markets was confirmed in the U.S. where the indices showed pronounced declines Thursday in the wake of European stock markets and in response to the publication of an indicator credence to the claim of an economy at a standstill .

The New York Stock Exchange ended down 4.31%, the Dow Jones industrial yielding 30 512.76 points to 11,383.68 points.

The S & P-500, wider, lost 60.27 points, or -4.78% to 1200.07 points.

The Nasdaq Composite fell on its side of 136.68 points (-5.08%) to 2556.39 points.

The volatility index, sometimes called fear index, jumped 35.41%.

"There is a major correction," said Joseph Cangemi, managing director of BNY ConvergEx in New York.

The S & P 500 posted its worst performance since a meeting on February 10, 2009.

The discussions in Washington on controlling the fiscal deficit through a reduction in public spending and the publication of unemployment figures are bad to fear a new market into recession the world's largest economy.

The jobless claims in the week to July 30 fell by only 1,000 units compared to the previous week during which they had registered at 401,000 (revised from 398,000).

The remarks by the President of the European Central Bank Jean-Claude Trichet, who believes that the latest data indicate some deceleration in the pace of economic growth, have also produced a negative effect on the markets.

The fears weighing on demand had a negative first groups related to energy and raw materials.The S & P energy and materials that have plunged over 6% each.

The title General Motors sold 4.34% after publishing its results.

The action also AIG tumbled 6.34% as the group publishes its results after the close of Wall Street.

A reverse trend, the giant U.S. food Kraft Foods announced plans to split into two separate companies, while posting better than expected results and raising its forecast for 2011.

All these ads allowed under Kraft to break his fall and yield only 1.5% after jumping nearly 3% earlier in the session.

Company well established in France and in all the capitals of energy, Technip is the ideal partner to help us meet these major tenders, "said Keith Anderson, president of the offshore division of Iberdrola.

Areva was committed to the end of June to become the exclusive supplier of turbines powering offshore wind farms developed by Iberdrola.

Technip has in turn opened Monday the head of its operations offshore wind farms near Aberdeen, Scotland, joining other market players like Gamesa, Vestas and Siemens.

The new center will accompany the offshore wind projects in Britain and Europe, said Technip.

Faurecia has identified its goals Tuesday in 2011 after a first half marked by strong growth as the automotive supplier will maintain the second half through its investments outside Europe and in countries at low cost.

The specialist for exhaust systems and car seats, including the manufacturer PSA owns 57.4%, achieved a consolidated turnover of 8.15 billion euros in the first six months of the year, a up 19.4%.At constant scope and exchange rates – it has gained particular outside the specialist German automotive Plastal – the growth was 15.5%.

Faurecia's operating profit rose 57% to 340 million, giving a margin of 4.2% against 3.2% a year earlier, and net income, group share, increased by 82% to 185.8 million euros.

"With the strong growth recorded by the group in the first half and improved profitability (…), Faurecia is now a year ahead of its business plan 2010-2014 presented in June 2010," said the equipment in a statement."Growth should remain strong in the second half in all regions and medium term supported by a high level of acquisition of new programs."

In a presentation to analysts, Faurecia said to expect in 2011 a new record in terms of new contracts expected between 13 and 14 billion euros against 13.1 billion in 2010.

The group also raised to 450 million its investment objective for this year, against an initial assumption of 350 million.On behalf of the profitability and international expansion, priority is given to low cost countries, where investments will increase by 89% against 16% for countries where the cost base is higher.

Faurecia has 42 industrial projects under way, eight in Central America and the North – including five in Mexico – twelve in the European area – including nine in Eastern Europe, Russia and Turkey – and twelve in China.

ONE YEAR AHEAD OF PLAN

As part of its strategic plan in the medium term, the equipment is a turnover of 16 billion euros by 2014, driven by an expected average annual growth of 12%, 8% organic growth.Faurecia is also an operating margin of 4 to 4.5% in 2012 and then 5 to 6% in 2014.

In June 2010, he had also set a goal of doubling the share of sales outside Europe makes it to 42% within five years, against 23% in 2009.In the first half, the share of sales – excluding monoliths for catalytic converters that Faurecia bought out – carried out in Europe reached 34%.

For the year, the Group has revised upwards its target of consolidated net sales to 15.7 to 15.9 billion euros, against 14.8 to 15.3 billion expected so far, an increase from 13.8% to 15.2% compared to 2010, and refined to increase its target for operating profit to 620-650 million euros, against a previous range of 580-640 million.

"The results are in line with consensus," said JP Morgan Cazenove in a note."The forecast EBIT is revised up slightly, but remains in line with consensus, while the increase in capex reduced cash flow prospects."

Faurecia has revised down to 100 million euros its forecast net cash flow in 2011, against 200 million euros expected so far.

The action Faurecia closed Monday at the Paris Stock Exchange to 30.34 euros, giving a market capitalization of around 3.2 billion euros. Since the beginning of the year, the stock jumped 40%.

Volvo has maintained its forecast for Friday sales of trucks in 2011 while posting a result almost in line with expectations, which has helped jump title at the opening of the Exchange.

"During the second quarter, sales of Volvo continued to grow as a result of a steady recovery in mature markets and strong demand from emerging markets," said CEO Leif Johansson.

The Swedish group has reported an operating profit up 60% to 7.65 billion Swedish crowns (840 million) in the second quarter, against a forecast 7.67 billion in a Reuters poll.

Volvo still expects to sell this year between 230,000 and 240.000 trucks in Europe, and North America.

It also anticipates a recovery of the Japanese market after a decline of 26% in first half due to the earthquake that struck the country in March.

"Over the year, about 23,000 heavy goods vehicles should be sold in the Japanese market, representing a decline of 6%," announced the group.

Title Volvo opened up almost 5% at the Stockholm Stock Exchange.

Volvo has instead lowered its outlook for its second largest division, construction equipment, a growth of between 20% and 30% growth between 15% and 25%.

"The Chinese market is weakening due to the actions taken by the government to control inflation", said the group, adding that he has also strengthened its dominant position in this market.

The possibility of a default part of Greece, triggered by a redemption or exchange of debt securities, is at the heart of discussions between leaders of the euro area in Brussels, where a summit decisive for the future of the single currency s is open.

According to a draft statement obtained by Reuters, the 17 Heads of State and Government also advanced to an overhaul of the fund to support the euro area (EFSF) to enable it to act preventively, to recapitalize banks or buy bonds on the secondary market to stop the contagion.

In preparation for this summit, German Chancellor Angela Merkel and French President Nicolas Sarkozy Wednesday identified a common position on a new bailout Greek, which includes private sector, after seven hours of talks "very tight, "according to members of the French delegation.

Angela Merkel and Nicolas Sarkozy have called mid-term to Jean-Claude Trichet to join them in Frankfurt, suggesting that the compromise has the support of the President of the European Central Bank.

Several diplomatic sources said that if the question of a defect Greek – very short – is not fully resolved, the principle is accepted by all.

"It will not be made clear but it will be induced by the measures to be presented in the final declaration," said a source following the talks.

For its part, the Dutch Finance Minister Jan Kees de Jager, told his parliament that this possibility was not excluded.

"The demand to avoid a default selection is no longer on the table.We can continue on the path of a banking plan, which remains confidential, "he said.

REDEMPTION OF BONDS

According to the draft final statement, the fund will support euro area could now be used by countries in need loans of up to 15 years and at rates of about 3.5%, against seven and a half years and between 4.5 and 5.8% today.

It could also lend money to proactively country through a crisis of liquidity and recapitalize banks via loans to governments, even if they do not have a plan to help the EU and the Fund International Monetary Fund (IMF).

Finally, it could also be involved in the secondary market, provided that the European Central Bank does not declare an "emergency situation".

All these measures were presented for the first time in the spring but Germany had blocked when considering that they went too far.

The IMF, which is represented in Brussels by its new CEO Christine Lagarde, has previously recommended to the leaders of the euro area to replenish the EFSF and make it more flexible.

This redesign, however, require an amendment to the articles of EFSF and ratification by national parliaments, and could take several months.

It is also not clear whether the Permanent Mechanism for stability (MES), which will follow the EFSF July 1, 2013, will also perform these operations.

NO TAX CREDIT

According to several sources, the option to buy back Greek bond at a discount to face value is favored over an exchange or a "rollover" of bonds as it would greatly reduce the total amount of government debt, which is around 350 billion euros.

The new aid plan in Athens, which should amount to some 115 billion euros, against 110 billion for the first, will include participation estimated at 30 billion euros from the private sector.

The modalities of this participation of the banks had to be a presentation of Baudouin Prot, BNP Paribas – the bank most exposed to French Greek debt – and Josef Ackermann, chief executive of Deutsche Bank and the Institute of International Finance (IIF), which represents banks.

However, the solution of taxing the banking sector, which the banks were strongly opposed because they felt it unfair to those of them who are not exposed to the Greek debt was excluded.

The euro rose Thursday morning after having returned and was finally up sharply in the afternoon, boosted by the prospect of an agreement.

European shares have resumed their so-early in the afternoon after playing on a hesitant note before.

In the bond market, the yield spread between German debt – seen as a safe haven investment – and the debt of peripheral countries in the euro area has narrowed.

Imerys The French got the green light Friday to the European Union for the acquisition of Talc de Luzenac, owned by Anglo-Australian mining group Rio Tinto.

Rio Tinto announced the sale for $ 340 million in February as part of its focus on its most important assets.

The European Commission, which acts as an agency competition for the 27 countries of the European Union said Friday that the transaction did not raise any particular problem of competition.

Talc, the softer rock that is, is mainly used in animal feed, ceramic tiles, chewing gum and powdered to make care of the same name.

EuropaCorp, the production company of Luc Besson announced Thursday a loss of 30.2 million euros for 2010-2011, mainly due to the failure of the international two items of the saga "Arthur and the Invisibles "and the costs associated with the reorganization.

The group of film production and distribution, established in 1999, table, however a return to growth "sustainable and profitable" due to the increased presence of international films and lower overhead.

"The realization of the strategic action plan allows us to renew our confidence in the goal of returning to profitability for the year 2011-2012," said Group Chief Executive Christopher Lambert in a statement.

The studio, who has produced "Taxi," "The Fifth Element" and "The Transporter", introduced in May a three-year strategic plan which should enable him to return to profit after exceptional losses Arthur saga.

"This plan led in particular to the increase in the share of recurrent and our international sales," said Christophe Lambert.

The studio recording the rise of television production, which in 2010-2011 accounted for the first time to revenue, amounting to 16 million euros, or 9% of 178.7 million euros income group.

Around 24:30, the action is up 2.85% to 3.97 euros on Thursday, bringing its market capitalization to about 80.6 million euros.The title has sold nearly 12% since the beginning of the year, after losing about 30% in 2010.

The French dairy group Lactalis to take control Tuesday of his Italian rival Parmalat, after months of battle against the Italian government, which wanted to keep one of its flagship food in domestic capital.

The entity resulting from merger-Lactalis Parmalat is the world leader in dairy products.

"Lactalis will take control of the board, allowing it to impose its policy to the group," said an analyst in Milan, on condition of anonymity.

"There was a verbal battle in Italy, but the market has won," he added.

Lactalis has launched a bid for all of Parmalat, and the share of 28.97% of the capital accumulated since March should give sufficient weight in the General Assembly on Tuesday to win a majority on the board.

The fact remains that the subject is sensitive in Italy in March after the absorption of the jeweler Bulgari by LVMH, and with the prospect of a possible takeover of Edison by EDF.

In addition, the press has mentioned an interest in BNP Paribas for Banca Popolare di Milano.

A PATRON OF DEPARTURE

The General Assembly on Tuesday will also be a turning point for Parmalat in that it marks the end of the reign of seven years of the CEO Enrico Bondi, the Italian employers figure regarded as a Rectifier of ailing companies.

76 years old, Enrico Bondi is expected to leave the company, having lost the support of the shareholder Intesa Sanpaolo, which has no opposite-Italian offer against the application filed by Lactalis.

Enrico Bondi was criticized for its conservative policy with regard to dividend, and for not having spent the cash reserves of 1.4 billion euros to acquire new targets.

Among the potential replacements, the Italian press and analysts spoke of Franco Tato, former CEO of Enel, and Antonio Sala, head of Lactalis Italia.

Promising to guarantee jobs and maintain the seat of Parmalat in Italy, Lactalis has secured the support of unions Alps.

The French offered 2.6 euros per share to acquire 71% of Parmalat that it lacks, for a total of 4.3 billion euros. The offer runs until July 8, but the board of Parmalat was found to be unfair.

Take control of the board considerably simplify the task of the French group.

The president of OPEC maintains there is no need to put more oil on the market Monday and deplored the initiative in this direction taken by the International Atomic Energy Agency (IEA).

The IEA last week announced the release of emergency reserves, the Organization of Petroleum Exporting Countries had decided earlier not to increase production to compensate for the lack of Libya.This is only the third time that the IEA takes such a decision 37 years of its existence.

"The market is in normal (…) There is no need to increase supply," said Iranian Oil Minister Mohammad Aliabadi, who holds the rotating presidency of OPEC to the end of the year.

He was speaking in Vienna where he met officials from the European Union for an annual exchange of ideas, regularly since June 2005.This meeting could be much more animated than usual, at least behind the scenes, given the divisions within OPEC and tensions between the cartel and consuming countries, especially since the use of reserves.

Mohammed Aliabadi wondered why major consuming countries do not have adhered to the principles of free trade they advocate. "Why do they not respect these principles, it's really a big issue for us.We think prices should be determined by the market itself, "he said.

Iran is one of the OPEC countries to have this month blocked a proposal to increase the production promoted by the Saudis.

The price of Brent crude for August delivery touched a session low of 102.28 dollars a barrel on Monday, down about 10% from its close of Wednesday, the eve of the announcement of the IEA .

"The big problem is that Iran has the presidency of OPEC in 2011 and is a political instrument," said Olivier Jakob of Petromatrix. "The news emanating from the current OPEC is irrelevant because Iran has kidnapped the OPEC and we will have to wait for 2012, perhaps, see OPEC again work as an institution."