ADR Report: Shares Fall On Continued Global-Growth Concerns
August 19 2011 - 5:04PM
Dow Jones News
International companies trading in New York closed lower Friday,
in line with the broader market, due to continued concerns about a
potential global recession and the health of the European banking
system.
The Bank of New York index of ADRs fell 1.5% to 119.24, weighed
by shares of European banks.
Exane BNP Paribas said Friday that investors were being spooked
by a number of factors, including dollar liquidity, worries that
European banks haven't marked down their sovereign-debt exposures
enough, and the risk of an economic recession.
Societe Generale SA (SCGLY, GLE.FR) closed 6.2% lower to $5.94,
Royal Bank of Scotland Group PLC (RBS, RBS.LN) slid 7% to $6.81 and
Lloyds Banking Group PLC (LYG, LLOY.LN) closed 5.6% lower at
$1.84.
The European index lost 1.9% to 108.56.
The U.K.'s competition regulator said Friday it was looking to
make British Sky Broadcasting Group PLC (BSYBY, BSY.LN), the
nation's biggest pay-television operator, change the way it
operates its Sky Movies business to allow rivals such as Virgin
Media Inc. (VMED) and BT Vision to compete on a more equal footing.
Shares fell 2.7% to $40.96.
Meanwhile, Numis Securities upgraded ARM Holdings PLC (ARMH,
ARM.LN) to buy from add, saying the depressed share price following
recent market turmoil represents a buying opportunity. There are
upbeat prospects in consumer computing and a positive read-across
from Hewlett-Packard Co.'s (HPQ) acquisition of Autonomy (AU.LN),
it noted. Shares were up 1.4% to $23.84.
The Asian index slumped 0.9% to 118.58 as shares of solar
companies fell.
China's LDK Solar Co. (LDK) said Thursday its second-quarter and
full-year financial results would be worse than expected, due to
lower prices and higher costs. Shares plunged 23% to $5.06.
Shares of China Sunergy Co. (CSUN) fell 3.2% to $1.22 after it
reported it swung to a second-quarter loss on slumping margins and
as the Chinese solar-products maker's overhead costs nearly tripled
mainly related to its push into new markets.
The Latin American index slid 1.1% to 342.80.
Societe Generale cut Brazilian miner Vale SA's (VALE, VALE5.BR)
target price to $38 from $42 after stress testing its model to take
into account lower iron-ore prices. SocGen said risks to Vale's
target price include low demand for iron ore and iron-ore pellets,
an economic slowdown in China and market volatility. Separately,
business newspaper Valor Economico said Friday that Vale is
planning to set up a logistics company which may be floated on
Brazil's BM&FBovespa stock exchange in 2012. Shares closed 1.6%
lower at $25.63.
The emerging-markets index closed 0.9% lower to 282.85.
South Korea halted the sale process for Woori Finance Holdings
(WF, 053000.SE), the nation's largest financial-holding company,
for a second time Friday due to insufficient interest from bidders,
a fresh blow to the current administration's pledge to reduce the
public sector's influence in the overall economy. Shares fell 4.1%
to $30.94.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;
nathalie.tadena@dowjones.com