7/20 European Stocks Rise, Led by Insurers, Banks, Oil Companies
London, July 20 (Bloomberg) - European stocks rose, led by
Aegon NV, Deutsche Bank AG and other financial companies, amid
optimism for economic growth and low interest rates.
''The environment in Europe remains very good for stocks,''
said Trudbert Merkel, who manages 12 billion deutsche marks
($6.7 billion) at Deka Deutsche Kapitalanlagegesellschaft MBH in
Frankfurt. ''Interest rates are low, economies are expanding.''
The Dow Jones Europe Stoxx 50 Index of leading European
companies rose 12.58, or 0.4 percent, to 3644.71, led by Aegon
and Royal Dutch Petroleum. The Bloomberg Europe 500 Index rose
0.7 to 226.54.
Aegon, the biggest Dutch insurer, gained 8 guilders to
213.7. Axa SA rose 14 French francs to 844, while Allianz AG,
Europe's largest insurer, rose 5 marks to 681. Low interest
rates and rising bond prices benefit insurers, which typically
own large bond portfolios.
''Allianz is one of my main holdings,'' said Merkel. ''It's
going to have good earnings growth to 2000.''
Assicurazioni Generali SpA, Italy's largest insurer, gained
1,931 lire to 71,000, a record. The company was reiterated
''strong buy'' by Morgan Stanley Dean Witter analyst Rob Proctor
last week who set a target price of 85,000 lire.
Deutsche Bank gained 2.8 marks to 159.2. Societe Generale
SA, France's biggest publicly traded bank, gained 33 to 1,483.
The yield on Germany's 10-year government bond, Europe's
benchmark, rose 1 basis point to 4.69. It's down 66 basis points
since the start of the year.
Oil and oil services companies across Europe gained after
Norsk Hydro ASA, Norway's biggest company, said it made $100
million in the second quarter, even though crude oil prices have
slumped 23 percent since the start of the year. Norsk rose 10
kronor to 349, extending its gain during the past three sessions
to 4.8 percent.
''The time to buy oil stocks is when oil prices are low and
the stocks have underperformed,'' said Nigel Cobby, a director
of research at Morgan Stanley, Dean Witter.
France's biggest oil company, Elf Aquitaine SA, rose 4
francs to 841. Royal Dutch rose 1.5 guilders to 109.7. British
Petroleum Plc gained 5 pence to 867.
Bouygues Offshore SA, France's second largest oil services
company, gained 8 francs to 298. French brokerage Cheuvreux de
Virieu upgraded its earnings estimate for the company to 15.3
francs a share from 14.4 for 1998, and to 19.2 francs from 16.8
for 1999.
Siemens AG, Germany's largest electronic and engineering
company, fell 3.25 marks, or 2.4 percent, to 129.75, extending
Friday's 3.6 percent loess. Some investors aren't convinced a
restructuring plan will boost profit.
''With Siemens it depends on whether you believe the new
approach is serious,'' said Merkel. Siemens said last week it
will step up plans to shed weaker units. ''I'll buy Siemens
again if it drops below 120 marks,'' Merkel said.
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