13/12/2010

PEERS & MARKETS

The major international markets rose in the week from 6 to 10 December (Milan +1.8%, London +1.2%, Frankfurt +0.8%, Paris +2.8%), buoyed by recovery in the banking and insurance segments (European index +1.5% and +4.7% respectively).

The Auto&Parts sector remained substantially the same (-0.2%) reflecting the risk that China will abolish car purchase incentives (1.6 litres or less engines) at the end of December (duty on cars has been reduced to 7.5% from 10%).

The news from China and the progressive rise in the cost of natural rubber, with futures reaching maximums of 4.558 $/ton (9/12) in Tokyo, affected share prices in the European tyre segment, which had dipped by the end of the week: Michelin -3.1%, Continental -5.0%, Nokian -1.2%.

Pirelli closed at €6.14, a fall of about 1%. Less trading on average: about 3 million, compared to about 4 million last month. Deutsche Bank resumed coverage of the share with TP €7.6 and a BUY recommendation. According to the broker, exposure on emerging markets and in the premium segment will guarantee above-market growth for the company. Profitability decidedly better, with a forecast of 11.5% for ebit margin in 2013.