05/03/2012

PEERS & MARKETS

The main European stock markets were up in the week from the 27th to the 2nd of March, 2012 (Milan +2.5%, London -0.5%, Frankfurt +0.8%, Paris +1%). Investors reacted positively to the liquidity injection by the ECB into the banking sector (three years, 1% interest rate), which benefited the bond market (EU government bond yields generally retreated in the week).

Auto & Parts stocks were slightly down (Stoxx index -0.6%), due to uncertainties related to rising oil prices (Brent futures $123/barrel).

Pirelli closed at €7.895 (-0.4%, in line with the sector). Broker Mediobanca upgraded the stock’s Target Price from €8 to €10, confirming the Outperform rating. According to the analyst, Q4 2011 results should confirm the good profitability trend, thanks to price/mix growth which should compensate weak volumes.

Tyre peers’ stocks performance was subdued: Michelin (-2%), Nokian (-0.4%). Continental outperformed (+2.6%) after presenting FY11 results and an optimistic market outlook for FY12.