French Stocks Fall, Led by Alcatel, ST; CAC Hits 13-Month Low
By Florence Labedays and Mark Deen
Paris, Feb. 16 (Bloomberg) -- French stocks fell, led by Alcatel SA after rival phone-equipment maker Nortel Networks Corp. halved its 2001 sales forecast amid concern about slowing U.S. economic growth. France's benchmark CAC 40 index touched a 13- month low.
The CAC dropped 109.40 points, or 1.9 percent, to 5595.13. Earlier in the day, the index fell as low as 5583.08, its lowest since Jan. 13, 2000. Alcatel alone contributed about 30 points to the index's decline. The broader SBF120 index fell 67.94 points, or 1.7 percent, to 3828.29, with almost twice as many shares falling as rising.
Alcatel, Europe's second biggest phone-equipment maker, tumbled 5.8 euros, or 10.3 percent, to 50.7 euros, after being suspended for dropping below a stock-market limit, the bourse operator Euronext SA said.
The fall came even after Alcatel said first-quarter sales should rise about 25 percent from the same period a year ago, maintaining an earlier forecast.
Nortel, the biggest maker of fiber-optic equipment, said prospects for sales of wireless equipment dimmed as installation schedules for some European networks were pushed back. It expects network operators to install equipment in the first half of 2002 instead of the fourth quarter of this year.
STMicroelectronics NV, Europe's largest chipmaker, fell 2.72 euros, or 5.9 percent, to 43.3 euros.
``The scenario of a rebound in the second half looks less and less likely,'' said Jerome Ramel and Helene Coumes, analysts at KBC Securities, in a note to investors. ``Sector players are starting to envisage a recession rather than a slowdown.''
Credit Downgrade
France Telecom SA, Europe's second-largest phone operator, fell 3.7 euros, or 5.1 percent, to 69.25 euros, trading at new 18- month lows. France Telecom's credit rating was lowered one notch to ``A-'' by Standard & Poor's on concern the company can't cut its debt as quickly as planned.
Wanadoo SA, France Telecom's Internet unit, shed 0.6 euro, or 6.9 percent, to 8.1, while Orange SA, the mobile phone unit of France Telecom, fell 0.3 euro, or 3.6 percent, to 8.89.
``We've had a lot of profit warnings from the U.S. and bad news on the telecommunications sector in Europe; but let's not take it tragically and rather see the buying opportunities,'' said Michel Dumoulin, who helps manage about 2 billion euros ($1.8 billion) in equities at Fortis Investment Management in Paris. Dumoulin bought shares in Alcatel Optronics and intends to buy more Orange shares considering their ``low price.''
Business Objects SA gained 0.65 euro, or 0.8 percent, to 82.25. The business-software maker's board yesterday approved a three-for-two stock split to improve liquidity.
FI System SA gained 0.66 euro, or 7.3 percent, to 9.66 after losing 33 percent in the previous three days.
Aventis SA, France's largest drugmaker, gained 1.6 euros, or 1.8 percent, to 88.7. Rival Schering-Plough Corp. said approval of the successor to its Claritin allergy drug will be delayed while it fixes manufacturing flaws. The U.S. Food and Drug Administration is withholding approval of the drug, known as Clarinex and a rival to Aventis's Allegra, until the deficiencies are corrected, the company said.
The following stocks made significant gains or losses in French markets today. Stock symbols are in parentheses after the company names.
Cesar SA (CES FP) shed 0.44 euro, or 9.5 percent, to 4.22, extending yesterday's 4.9 percent drop. The company, which sells disguises for Halloween, Carnival and other holiday celebrations, said it posted sales of 135 million euros in 2000, lower than the 156.9 million euros it forecast, hurt by lower-than-expected demand. The company did not provide comparative figures. The information was contained in a statement released on the French government bulletin, known as the BALO.
Expand SA (EXP FP) added 1.15 euros, or 2.3 percent, to 51.8. The French film maker said sales rose 8 percent last year to 188 million euros.
Genesys SA (GENE FP) gained 2.7 euros, or 9.7 percent, to 30.6 after the teleconferencing company said it received the French market regulator's approval to issue shares for the planned acquisition of Vialog Corp. and Astound Inc. Genesys shareholders will vote on the acquisitions at a March 23 shareholders meeting, the company said in a statement released on PRNewswire.
Usinor SA (USI FP): Usinor shares were suspended today. The world's largest maker of stainless steel rods and wires, Arbed SA of Luxemburg and Spain's Aceralia Corporacion Siderurgica SA said they're in talks to merge. A combination would have a market value of about 5.74 billion euros. Usinor shares yesterday shed 0.15 euro, or 1 percent, to 14.05.
Wavecom SA (WVCM FP) fell 20.2 euros, or 40.6 percent, to 39.6, after being suspended for falling below stock exchange limits. Shares could not trade yesterday after the maker of wireless-telecommunications chips said its fourth-quarter operating loss widened to 5.5 million euros from 4.8 million in the same quarter in 1999 and gross margin halved to 13.2 percent from 25.5 percent in the year-earlier quarter.
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