European stocks posted a second week of gains this week, as companies from Alstom SA to GlaxoSmithKline PLC rallied amid mergers-and-acquisitions activity.
Alstom jumped 20 percent after people familiar with the matter said General Electric Co has held talks to buy the trainmaker, while Glaxo rose 6.2 percent after agreeing to sell its cancer drug business to Novartis AG and Meda AB surged 15 percent on a report that Mylan Inc has increased its bid for the Swedish drugmaker.
Falling this week was Royal Philips NV, which slid 7 percent after the world’s largest lighting company on Tuesday said its earnings before interest, taxes, amortization and one-time items fell 13 percent to 368 million euros. The average estimate of analysts surveyed by Bloomberg was 413 million euros (US$571.32 million).
Philips CEO Frans Van Houten attributed the decline to currency swings and challenging market conditions in China and Russia.
The STOXX Europe 600 Index added 0.3 percent to 333.5 this week, with healthcare stocks leading gains.
Equities declined on Friday amid concern that the crisis in Ukraine will spiral, leading to tit-for-tat sanctions between the the West and Russia. However, the benchmark has still climbed to within 2 percent of the six-year high it reached on April 4.
“The increase in deal activity should provide some support to markets,” Hugh Cuthbert, who helps manage about US$1 billion at SVM Asset Management Ltd, said by telephone.
“It’s encouraging to finally see that those with money in their pockets are spending on acquisitions. These companies can see synergy where markets wouldn’t. As an investor, if you’re able to take the industrial approach that these companies do, you can find value in the market,” he added.
European stocks dropped on Friday after US Secretary of State John Kerry warned Moscow that its intimidation of Kiev would cost it dearly.
“If Russia choose the path of de-escalation, the international community — all of us — will welcome it. If Russia does not, the world will make sure that the cost for Russia will only grow,” Kerry said.
National benchmark indices rose in nine of the 18 Western European markets this week.
In London, the FTSE 100 advanced 0.9 percent, while Germany’s DAX slipped 0.1 percent and France’s CAC 40 gained 0.3 percent. Markets were closed on Monday for the Easter holiday, with Iceland also shut last Sunday for a public holiday to celebrate the first day of summer.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
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