With scare stories swirling through the markets ahead of Monday's results statement, SAirGroup found itself close to freefall. The group, the holding company for Swiss Air and a collection of lesser airline stakes, has long been expected to run into the red but yesterday sentiment took a distinct turn for the worse.
Broker talk was all about big provisions with some analysts suggesting that overall losses could get close to SFr2.5 billion (against a 1999 profit of SFr273 million) as the newly installed management team attempts to restructure the bigger trouble spots. The shares, which stood at SFr262 in January, crashed SFr168.25 before closing off 8.3 per cent at SFr177.50.
Financials were still in play following the upheavals in the German market earlier in the week. They looked set to create at least one and possibly as many as three new bancassurance groups.
The most advanced pieces on the chessboard are Allianz and Dresdner Bank following their confirmation of merger talks on Thursday. Insurer Allianz rose 4 per cent to €330.80 and Dresdner Bank advanced 4.5 per cent to €51.20 in late trade.
Two other pieces moving into play are Munich Re and HypoVereinsbank, which would become closer via the knock-on effect on cross-holdings of shares. Munich rose 2.1 per cent to €340.15 and Hypo 2.2 per cent to €61.80. Munich Re also reported annual results yesterday. They showed net profit up 54.5 per cent.
Shares in EADS, the pan-European aerospace company that makes the Airbus super jumbo, rose 2.8 per cent to €21.01 after Boeing announced it was abandoning attempts to develop a competitor.
Among techs, Alcatel had a bad day, falling 6.9 per cent to €34.25. Its shares were downgraded by Schroder Salomon Smith Barney and Morgan Stanley Dean Witter.
French foods producer Danone, pounded on Thursday following production cuts, rallied after a target price upgrade at KBC Securities, which has the stock listed as a "buy". The shares regained 2.4 per cent at €143.80.
