Citigroup Downgrade Pushes Apple Shares Near $500

Shares of Apple (AAPL), one of the most popular stocks among retail investors and hedge funds alike, broke through a psychological level this morning by falling to $499 in premarket trading. The stock is down 28 percent from its all-time high of $702 two months ago (but it’s still up more than 25 percent on the year).

Some of the movement is due to a Citigroup (C) report, published today, that downgrades Apple to a “neutral” rating over concerns that it has scaled back orders from its Asian suppliers. At least four other banks have lowered their guidance on Apple this month, according to Bloomberg data, although 84 percent of analysts still rate the stock a buy. Fewer than 5 percent label it a sell.

Plenty of Apple bulls still exist—one example being Brian J. White, an analyst at Topeka Capital Markets, who this morning reissued his Apple price target of $1,111 per share. White cited record iPhone 5 sales in China of 2 million, in the device’s first three days in stores.

View the original article here

Sears Shares Plunge on Store Closings

December 28, 2011, 3:54 AM EST By Cotten Timberlake

(Updates shares price in fifth paragraph.)

Dec. 27 (Bloomberg) -- Sears Holdings Corp. tumbled the most in 8 1/2 years after saying it will close as many as 120 stores, with a deeper-than-expected sales decline casting doubt on Chairman Edward Lampert’s efforts to turn around the chain.

Lampert has tried several strategies since merging Sears with Kmart in 2005, none of which have reversed falling sales. His latest push involves moving toward smaller stores and licensing the Craftsman, DieHard and Kenmore brands. As a result, the larger stores have received less investment and prompted customers to shop elsewhere, according to Gary Balter, an analyst with Credit Suisse Group AG in New York.

Same-store sales at the largest U.S. department store chain fell 5.2 percent in the eight weeks ended Dec. 25, Sears said today. By contrast, such sales in the department-store sector as a whole will climb an estimated 4 percent in November and December, compared with the same period a year ago, according to the International Council of Shopping Centers, a New York-based trade group.

“Results were much worse than anticipated,” Balter said. The share price also was artificially high because of a very limited number of shares outstanding, he said. Today’s news also “scares” investors who are long on the stock, said Balter, who rates the shares “underperform.”

Sears fell 27 percent to $33.38 at the close in New York, the biggest decline since April 29, 2003. The shares have fallen 55 percent this year.

Bond Prices

The chain’s $987.4 million of 6.625 percent notes due in October 2018 declined 4.6 cents to 76 cents on the dollar to yield 11.9 percent today in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. That’s the lowest price since the notes were issued in exchange for other debt in August, Bloomberg and Trace data show.

Closing the Kmart and Sears stores will generate $140 million to $170 million of cash from inventory sales and leasing or sales of the locations, the Hoffman Estates, Illinois-based company said today in a statement. Sears will incur non-cash expenses of as much as $2.4 billion in the fourth quarter to write down the value of potential tax benefits and goodwill.

The company plans to reduce fixed costs by $100 million to $200 million, according to the statement.

“There is not enough value in the real estate to do much with,” Balter said. “Who is going to buy the stores? There are no buyers. There is no one growing in U.S. retail.”

Hedge Fund

Lampert, who along with his hedge fund owns 60 percent of Sears, has presided over 18 consecutive quarters of declining sales. Before today’s announcement, Sears had closed 171 of its large U.S. stores since 2005. Besides turning to smaller stores and franchising, Lampert also has been leasing space to other retailers and trying to boost Web sales.

Instead of reviving growth, Sears has lost customers and market share to discounters such as Wal-Mart Stores Inc. and Target Corp., which are attracting budget-minded consumers.

Earnings before interest, depreciation and amortization in the fourth quarter will be less than half of last year’s $933 million, Sears said.

“There is this philosophy that you don’t need to make as much of an investment in the stores if you have a brand,” Balter said in a telephone interview. “That has not worked.”

Sears didn’t identify which stores will be closed. In his annual investor letters, Lampert has identified the smaller Hometown and Sears Outlet stores as sources of growth and profit. The company opened 122 of those “specialty” stores last year, he said in his 2011 letter, and now has 945 -- less than a quarter of the total.

Biggest Exposure

Landlords with the biggest exposure to Sears are Simon Property Group Inc., which has Sears as a tenant at 137 of its 190 malls, and General Growth Properties Inc., with Sears as a tenant at 110 of its 167 malls, according to Andrew Johns, an analyst at Green Street Advisors Inc. in Newport Beach, California.

“Generally, when Sears decides to close, it’s the lower productivity stores with lower sales per square foot,” Johns said in a telephone interview. “Sears has good real estate at some malls.”

The company is allowing other retailers to sell its DieHard, Craftsman and Kenmore products. Sears has also cut deals with such retailers as Costco Wholesale Corp. and Ace Hardware to sell Craftsman tools in their stores.

“If they can just create enough cash flow to get through the downturn, at some point there is going to be a huge uptick in appliance sales,” Paul Swinand, an analyst with Morningstar Inc. in Chicago, said in a telephone interview. “They just have to make sure that when that happens they are not cut off at the knees, and that it doesn’t all go to Home Depot and Best Buy.”

Sears is to report fourth-quarter earnings on Feb. 23.

“The market is assuming there’s more bad news to come,” Swinand said.

--With assistance from Lauren Coleman-Lochner and Tim Catts in New York, and Daniel Taub in Los Angeles. Editors: James Callan, Robin Ajello

To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

View the original article here

JPMorgan Shares Rise After Earnings Beat Analysts’ Estimates

July 14, 2011, 12:55 PM EDT By Dawn Kopecki

(Updates with Dimon’s comments on Europe in 12th and 13th paragraphs.)

July 14 (Bloomberg) -- JPMorgan Chase & Co. rose the most in eight months in New York trading after earnings beat analysts’ estimates and revenue unexpectedly climbed on gains from underwriting stocks and bonds.

JPMorgan shares jumped as much as 4.1 percent after the New York-based bank reported its highest half-year profit ever, at almost $11 billion. Second-quarter net income increased 13 percent from a year earlier, to $5.43 billion, or $1.27 a share, six cents higher than the average estimate of analysts surveyed by Bloomberg.

Trading and investment-banking fees bolstered results as the retail bank labored under bad mortgages, low interest rates and litigation over loan-servicing and foreclosure practices. JPMorgan, led by Chief Executive Officer Jamie Dimon, was the first of the six-largest U.S. banks to report earnings, topping estimates for the 13th straight quarter, according to data compiled by Bloomberg.

“They’ve set a high bar for the rest of the industry in a very difficult environment,” Michael Holland, who oversees more than $4 billion in assets at New York-based Holland & Co., said in an interview with Bloomberg Radio. The firm’s $26.8 billion in revenue was “a blow-away number,” Holland said.

JPMorgan rose $1.17, or 3 percent, to $40.79 at 11:51 a.m. in New York Stock Exchange composite trading, after reaching $41.24 earlier today, the biggest gain since Nov. 4. The shares were down 6.6 percent this year through yesterday.

Fixed Income

Second-quarter revenue jumped 7 percent, beating the highest estimate among 18 analysts surveyed, as fixed-income and equity markets revenue climbed to $5.5 billion from $4.6 billion a year earlier, a 20 percent gain. Revenue was projected to be $26 billion, according to the survey.

JPMorgan’s fixed-income and equity trading results beat the estimates of $5.29 billion from Chris Kotowski, an Oppenheimer & Co. analyst, and $4.95 billion from Keith Horowitz, a Citigroup Inc. analyst.

The bank was able to boost trading results by increasing leverage and making bets on safer securities, according to Paul Miller, a former examiner for the Federal Reserve Bank of Philadelphia and an analyst at FBR Capital Markets in Arlington, Virginia.

Trading gains were “pretty broad-based,” Dimon said on a call with reporters.

Fee Revenue

The investment bank posted its second-best quarter for fee revenue out of the last 14 quarters and revenue outside the U.S. climbed 11 percent from the same quarter last year, Chief Financial Officer Doug Braunstein told reporters on the conference call.

The investment bank and trading desk are “carrying the bank right now, and the bank continues to struggle,” Miller said. “This was all driven by the broker-dealer side of the business.”

The bank’s outstanding loans and contracts in Portugal, Ireland, Italy, Greece and Spain total about $15 billion, which “bounces around by several billion,” after taxes and after taking into account hedges against that risk, Dimon said. In the worst-case scenario, the bank may lose about $3 billion, he said.

“We’ve not dramatically reduced those exposures,” Dimon said. “We’re still doing a lot of business in Europe. We hope the Europeans appreciate it.”

Credit Cards

JPMorgan’s credit-card division, which lost money for all of 2009, generated $911 million in profit, or 17 percent of the bank’s net income for the quarter. The investment bank’s $2.06 billion of earnings accounted for 38 percent of the total.

Fewer consumers fell behind on their credit-card payments in the second quarter. Thirty-day delinquency rates dropped to 2.98 percent from 4.96 percent in the same quarter of 2010 and 3.57 percent in the first quarter of 2011. The rate of credit cards charged off as bad debt also fell, to 5.82 percent from 10.2 percent the prior year and 6.97 percent in the previous quarter.

“Within our wholesale credit portfolio, credit trends appear to have normalized,” Dimon said in a statement.

Provisions for credit losses dropped 46 percent to $1.81 billion from $3.36 billion as defaults and late payments declined. The bank released $1.2 billion of reserves held against future losses back into earnings.

Beating Estimates

“You continue to get reserve releases, which mean that your headline earnings-per-share numbers beat” estimates, Miller said. “Investors see that as poor quality and instead look at the underlying fundamentals, pretax pre-provision profits or your underlying revenue numbers.”

The retail bank, which includes mortgages, consumer bank accounts and small business lending, posted a $582 million profit, from a $1.04 billion gain a year before and a $208 million loss in the first quarter.

The division benefited from a $587 million reduction in provisions to $1.13 billion, JPMorgan said.

The bank added $1.27 billion to litigation reserves, mostly for mortgage-related issues, and took a $1 billion charge to clean up foreclosure matters, according to a slide show accompanying the earnings report. Repurchase losses were $223 million, JPMorgan said.

Dimon told reporters that the $1 billion charge covered some of the costs to settle charges by U.S. and state officials that the bank improperly foreclosed on borrowers.

Delaying Foreclosures

“I would do anything to get it done today, but my counsel advises us that it could take a while,” Dimon said of negotiations with 50 state attorneys general and the Justice Department. “Delaying foreclosures is not a good thing for the economy.”

The reserves don’t cover liabilities from loans made by Washington Mutual, the lender JPMorgan acquired during the financial crisis. JPMorgan said those liabilities are the responsibility of the Federal Deposit Insurance Corp., adding that the “FDIC has contested this position.”

The outstanding balance of loans related to Washington Mutual was approximately $70 billion as of March 31, with about $24 billion overdue by 60 days or more, according to the company’s first-quarter regulatory filings.

JPMorgan and other large banks, which have benefited from record low costs of funding mortgages and other assets, face a squeeze on net interest margins -- the difference between what they pay to borrow money and what they get for loans and on securities.

Interest-Earning Assets

The net yield on interest-earning assets -- what the bank collects on interest on loans and securities minus what it pays out on deposits and other borrowings -- fell to 2.72 percent in the second quarter, from 2.89 percent in the first quarter and 3.01 percent a year earlier.

Citigroup, the third-biggest U.S. lender behind JPMorgan and Bank of America Corp., may report a second-quarter profit of $2.95 billion when it releases results on July 15, the survey of analysts shows. Charlotte, North Carolina-based Bank of America may report a profit of $3.08 billion excluding mortgage-related costs on July 19. San Francisco-based Wells Fargo & Co. may say it earned $3.75 billion when it announces results the same day.

Capital One Financial Corp., this year’s best-performing major U.S. bank stock, said yesterday that net income rose 50 percent to $911 million as it set aside fewer provisions for loan losses.

--With assistance from Erik Schatzker, Michael J. Moore, Rick Green, Brooke Sutherland and Lindsey Rupp in New York. Editors: Steve Dickson, William Ahearn

To contact the reporter on this story: Dawn Kopecki in New York at dkopecki@bloomberg.com.

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

View the original article here

Abu Dhabi Shares Rise to 7-Month High on MSCI Upgrade Optimism

June 19, 2011, 10:27 AM EDT By Zahra Hankir

June 19 (Bloomberg) -- Abu Dhabi’s benchmark stock index advanced to the highest since November on speculation the United Arab Emirates will be upgraded to emerging market status by MSCI Inc. this week. Egypt’s stocks increased.

Abu Dhabi Commercial Bank PJSC climbed 1.9 percent after it said it will make a profit of about 1 billion dirhams ($272 million) from the sale of its stake in RHB Capital Bhd. Emirates Telecommunications Corp., the U.A.E.’s biggest phone company, gained for a 10th day, the longest winning streak since 2005. The ADX General Index climbed 0.5 percent to 2,775.44, the highest since Nov. 1, at the 2 p.m. close in Abu Dhabi. Dubai’s DFM General Index fell 0.1 percent after rising 2.8 percent last week.

MSCI, which classifies six of the seven Gulf markets as frontier, will decide on whether to raise the U.A.E. to emerging-market status on June 21. Bourses in the country said May 29 that market participants are ready to use an upgraded trading system, the so-called delivery-versus-payment, meeting one of the criteria for an upgrade at MSCI.

“In the coming days, all investors are eyeing the MSCI decision to include the U.A.E.” in the emerging market index, said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai. “All the positivity in the market is related to that.”

Citadel Gains

Exchanges in the U.A.E. may attract $1.5 billion if the nation secures the upgrade, Sebastien Henin, who helps oversee $110 million at The National Investor in Abu Dhabi, said in April. Frontier-market is a designation that applies to economies and financial markets that are less developed. Saudi Arabia’s market isn’t classified at MSCI. Qatar is also under review for a reclassification this week. The nation’s benchmark index gained 0.2 percent.

In North Africa, Egypt’s EGX30 Index advanced 1.6 percent to the highest level since January 27. Citadel Capital SAE climbed 4 percent to 6.32 Egyptian pounds, the highest since March 23.

Abraaj Capital Ltd., a Dubai-based private-equity firm, may hire Morgan Stanley as an adviser on the planned acquisition of a stake in the Egyptian private-equity company, two people familiar with the situation said June 16 after markets closed.

Abu Dhabi Commercial Bank added 1.9 percent to 3.29 dirhams, the highest since October 2008. The U.A.E.’s third- biggest bank by assets on June 17 agreed to sell its 24.9 percent stake in Malaysian lender RHB Capital to Abu Dhabi’s state-owned Aabar Investments PJSC for 10.80 ringgit a share, or about 5.9 billion ringgit ($1.9 billion).

Israel Bonds Fall

Etisalat rose 1.4 percent, the most since Feb. 8, to 11.10 dirhams.

The Bloomberg GCC 200 Index dropped 0.5 percent and Saudi Arabia’s Tadawul All Share Index retreated 0.9 percent. Bahrain’s BB All Share Index fell 0.2 percent and Oman’s benchmark stock index was little changed. Kuwait’s gauge slipped 0.4 percent.

Israel’s benchmark TA-25 stock index gained less than 0.1 percent and the Mimshal Shiklit government bond due January 2022 fell, pushing the yield three basis points higher to 5.38 percent.

Delivery-versus-payment is a securities industry procedure in which payment for a security must be made when the security is delivered. Usually, the payment is made to a bank, which in turn pays for the security.

--Editors: Claudia Maedler, Shanthy Nambiar

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

View the original article here

General Motors Said to Weigh Buying Shares From U.S.

June 03, 2011, 5:15 PM EDT By David Welch

(Updates with closing share price in fifth paragraph.)

June 3 (Bloomberg) -- General Motors Co. executives have discussed buying shares from the U.S. Treasury Department to reduce the government’s 33 percent stake in the automaker, three people familiar with the matter said.

No decisions have been made on a share purchase, said the people, who didn’t want to be identified revealing internal discussions. Detroit-based GM is weighing uses for its cash, such as shoring up its underfunded pension plans, paying off debt and funding new vehicle programs, the people said.

Using some of the $30.6 billion in cash and marketable securities GM had at the end of the first quarter to reduce the government’s stake would relieve investors’ concerns that a share sale by the U.S. Treasury Department would hurt the stock, said David Whiston, an analyst with Morningstar Inc. in Chicago.

“There is an overhang on the stock because of government ownership,” Whiston said in a telephone interview. “GM may think that buying down Treasury’s stake will remove some of the overhang.”

GM fell 48 cents, or 1.6 percent, to $29.12 at 4:15 p.m. in New York Stock Exchange composite trading after earlier dropping as much as 2.4 percent. The shares have declined 12 percent since their initial public offering in November.

The government’s 500 million shares in Detroit-based GM would be valued at about $14.6 billion at today’s closing price.

‘Immediate Priorities’

“In terms of uses of cash, we have clear, immediate priorities, which include further strengthening our balance sheet and fully funding our pensions,” Jim Cain, a GM spokesman, said in a telephone interview. “Our objective is to fund our operations with cash and then return any excess cash to our shareholders. Nothing has been ruled in or out.”

Mark Paustenbach, a spokesman for the U.S. Treasury, declined to comment.

GM’s U.S. hourly worker pension plan was underfunded by $11.2 billion at the end of the first quarter. The company also had $5 billion in debt and $5.5 billion in preferred stock outstanding. The company may decide to use its cash for those obligations first, so no buyback is imminent, the people said.

While GM would want to buy the shares because the stock is cheap, President Barack Obama would be criticized for selling at a significant loss, one of the people said.

The Treasury has decided to wait until at least July 1 to prepare for a secondary offering, a person familiar with the matter has said. By filing an S-3 after July 1, the government would be able to sell shares more quickly and with a less- thorough review. In that case, the Treasury likely would wait until GM reports second-quarter earnings before selling more stock, delaying the sale until August, the person said.

The Treasury may make a third offering in November or December and doesn’t need to sell all of the shares this year, the person said.

The U.S. Treasury Department yesterday announced an agreement with Fiat SpA to sell the government’s remaining 6 percent stake in Chrysler Group LLC. The sale would bring Fiat’s stake in Chrysler to 52 percent.

--With assistance from Craig Trudell in Southfield, Michigan. Editors: Kevin Orland, Jamie Butters.

To contact the reporter on this story: David Welch in Southfield, Michigan, at dwelch12@bloomberg.net.

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net

View the original article here

Egypt Shares Rise on Speculation Drop Overdone; Gulf Stocks Drop

June 05, 2011, 11:38 AM EDT By Zahra Hankir and Ahmed A Namatalla

June 5 (Bloomberg) -- Egypt shares rose the most in a week on speculation the recent drop was overdone as the exchange said a government plan to impose capital gains tax applies only to dividend distributions and not to profit from stocks trading.

Orascom Construction Industries, Egypt’s biggest publicly traded property builder, jumped 2.5 percent. Commercial International Bank Egypt SAE advanced the most in a week. The EGX 30 Index gained 1.6 percent, the most since May 29, to 5,445.01 at the 2:30 p.m. close in Cairo. The measure slumped 2.7 percent on June 2 after the government unveiled the capital gains tax on dividends and higher corporate tax bracket to curb the budget deficit. In the Persian Gulf, the Bloomberg GCC 200 Index declined 0.3 percent.

“The negative effect we saw last week from the capital gains tax announcement was very short-lived because the market is still trading at a discount and small investors now see that their trading profits will not be affected,” said Ashraf Akhnoukh, senior equity sales trader at Cairo-based Commercial International Brokerage. “There still remains a growth story here.”

The bourse is studying the capital gains tax plan and will discuss it with the business community and the markets regulator before advising the government, the exchange said June 2. The 24 percent decline in Egypt’s shares this year has left the 30 companies on the benchmark index valued at an average 7.7 times estimated earnings, data compiled by Bloomberg show. That compares with 11.1 times for the MSCI Emerging Markets Index.

Budget Deficit

Egypt is trying to rein in a widening budget deficit as the North African country raises subsidy spending and salaries of state employees to meet public demand for improving living standards after a popular revolt ended 30 years of rule by former President Hosni Mubarak in February.

Orascom Construction advanced the most since May 29 to 268.04 Egyptian pounds. Commercial International, the biggest publicly traded bank by assets, rose 1.4 percent, the most since May 29, to 30.39 pounds.

Qatar’s QE Index retreated 1 percent, while Kuwait’s index dropped 0.8 percent. Oman’s gauge declined 0.6 percent and Dubai’s DFM General Index was little changed. Abu Dhabi’s ADX General Index lost 0.2 percent and Bahrain’s measure slipped 0.1 percent. Saudi Arabia’s Tadawul All Share Index gained less than 0.1 percent.

Israel’s TA-25 measure advanced 0.2 percent in Tel Aviv. The benchmark Mimshal Shiklit government bond due January 2020 declined, pushing the yield two basis points higher, or 0.02 percentage point, to 5.09 percent.

--With assistance from Alaa Shahine in Dubai. Editors: Shaji Mathew, Shanthy Nambiar

To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editors responsible for this story: Shanthy Nambiar at snambiar1@bloomberg.net; Claudia Maedler at cmaedler@bloomberg.net

View the original article here

European Stocks Are Little Changed; M&B Slides, BP Shares Rally

May 20, 2011, 10:33 AM EDT By Giles Broom

May 20 (Bloomberg) -- European stocks were little changed as Greek 10-year bond yields rose to a record high, offsetting speculation that the Federal Reserve will maintain its stimulus.

BP Plc advanced after the oil company reached a settlement with a unit of Mitsui & Co., one of its partners on the Macondo well. Micro Focus International Plc rallied 6.8 percent after saying that Advent International Corp. has made an approach for the U.K. software producer. Mitchells & Butlers Plc, the owner of Harvester and Toby Carvery pubs and restaurants, sank 5 percent after posting reduced fiscal first-half profit.

The Stoxx 600 increased less than 0.1 percent to 280.05 at 3:07 p.m. in London, heading for a weekly decline of 0.2 percent. The gauge advanced 0.7 percent yesterday as companies from Glencore International Plc to LinkedIn Corp. held initial public offerings. Even so, the measure has fallen 3.8 percent since this year’s high on Feb. 17.

“Valuations are cheap and extremely attractive compared with government or corporate bonds,” said Ian Richards, an equity strategist at Royal Bank of Scotland Plc in London. “The economic growth outlook is still okay and the U.S. and European countries are progressively addressing the structural debt problems.”

Federal Reserve Stimulus

Fed Bank of Chicago President Charles Evans said improvements in the economy, labor market and the outlook for inflation aren’t sufficient for the Fed to begin withdrawing its record monetary stimulus.

“Slow progress in closing resource gaps and a medium-term outlook for inflation that is too low lead me to conclude that substantial policy accommodation continues to be appropriate,” Evans said yesterday.

Fed Bank of New York President William C. Dudley said it’s important for the central bank not to “overreact” to the recent pickup in inflation by tightening monetary policy.

The Bank of Japan kept its benchmark interest rate unchanged near zero and refrained from increasing its credit programs at the end of a two-day meeting today, as predicted by all 14 economists surveyed by Bloomberg News.

European shares pared their earlier advance as Germany’s Bundesbank said that the continent’s largest economy will probably lose some momentum. The economy’s 1.5 percent growth rate in the first quarter from the previous three months “considerably overstates the underlying economic momentum. Output growth was clearly lifted during the reporting period by backloading and catching-up effects,” the Frankfurt-based bank said in its monthly bulletin published today.

Greek Debt

Greek bonds slid on speculation that the Mediterranean nation will have to reorganize its debt obligations as it struggles to reduce its fiscal deficit this year.

National benchmark indexes retreated in 14 of the 18 western European markets. The U.K.’s FTSE 100 Index lost 0.1 percent and France’s CAC 40 Index dropped 0.4 percent. Germany’s DAX Index retreated 1.1 percent. Copenhagen’s stock market was closed for a public holiday.

BP surged 2.2 percent to 457.7 pence after saying a unit of Mitsui will pay Europe’s second-largest oil company by sales $1.1 billion after reaching a settlement over last year’s Gulf of Mexico spill. The stock has fallen 30 percent since the Deepwater Horizon oil rig exploded last year, while the MSCI World/Energy Index has risen 13 percent.

Separately, Investec Plc upgraded the shares to “buy” from “hold” today. “We believe CEO Bob Dudley can regain BP’s once fundamentally unique reputation as the industry ‘thought leader,’” Stuart Joyner, an analyst at Investec in London, wrote in a note to clients today.

CGGVeritas, the world’s largest seismic surveyor of oilfields, climbed 3.4 percent to 25.02 euros after announcing it will create a marine joint venture with Elnusa Tbk PT.

Micro Focus Advances

Micro Focus soared 6.8 percent to 395 pence for the largest gain in the Stoxx 600. Advent International has approached the company about a potential takeover, Micro Focus said in a statement.

“At this stage, there can be no certainty that any offer for the company will be forthcoming nor as to the price at which any offer might be made,” the statement said.

Prudential Plc advanced 1 percent to 747 pence after UBS AG said that the “underperformance” by the U.K.’s largest insurer by market value produced “an attractive buying opportunity” in a note to clients today.

Credit Suisse Rises

Credit Suisse Group AG climbed 1 percent to 36.75 Swiss francs after Deutsche Bank AG upgraded the shares to “buy” from “hold.” Switzerland’s second-biggest bank is “not exposed to peripheral Europe” and “is strengthening its capital base,” Matt Spink and Alexander Hendricks, both research analysts at Deutsche Bank, wrote in a note to clients today.

Scottish & Southern Energy Plc rose 1.9 percent to 1,352 pence, bringing the stock’s gain this year to 10 percent. The U.K. power producer posted full-year adjusted profit after taxes that increased 2.5 percent to 1.04 billion pounds ($1.7 billion).

BioMerieux, the maker of HIV and hepatitis tests, soared 3.9 percent to 78.57 euros after agreeing to buy AES Laboratoire Groupe for 183 million euros ($259 million).

Rhoen-Klinikum AG, the German operator of medical clinics, increased 4 percent to 17.29 euros.

“Privatization activity is picking up and Rhoen has enough firepower to participate successfully,” Holger Blum and Gunnar Romer, analysts at Deutsche Bank, wrote in a note to clients today. The bank upgraded the company to “buy” from “hold.”

Mitchells & Butlers Slips

Mitchells & Butlers slumped 5 percent to 319.7 pence, its biggest drop in almost six months. The company reported that net income fell 29 percent in the 28 weeks ended April 9 as revenue declined and the company incurred one-off costs. Profit dropped to 37 million pounds from 52 million pounds a year earlier, the Birmingham, England-based company said today.

Shares in Inditex, the world’s largest clothing retailer, slid 2.2 percent to 61.24 euros. Gap Inc., the largest U.S. apparel chain, yesterday cut its profit forecast 22 percent as the cost of making clothes rose more than it had predicted.

--Editor: Will Hadfield

To contact the reporter on this story: Giles Broom in Zurich at gbroom@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

View the original article here