AFX TOP STORIES Europe 1605 GMT

March 30th, 2007

LONDON (AFX) - Here are the top stories on AFX News

EU warns Microsoft of further penalties over unreasonable pricing

BRUSSELS (AFX) - The European Commission warned Microsoft Corp that the computer software giant could face further penalties over unreasonable pricing.

The commission said it has sent a statement of objections to Microsoft for failing to comply with some of the obligations under its antitrust ruling in March 2004.

Deutsche Telekom Q4 adj EBITDA drops 12.5 pct as weak domestic ops weigh

FRANKFURT (AFX) - Deutsche Telekom AG’s adjusted fourth-quarter EBITDA fell 12.5 pct as the German telecoms giant continued to struggle with weak business in its home market.

EBITDA adjusted for special factors in the three months to Dec 31 was 4.548 bln eur, down from 5.199 bln in the same period a year earlier, the Bonn-based company said. This fell short of the 4.650 bln consensus forecast of analysts polled by AFX News.

Swiss Re FY net beats forecasts; launches 6 bln sfr buyback, hikes div

ZURICH (AFX) - Swiss Re reported a forecast-beating full year net profit of 4.560 bln sfr, up from 2.304 bln a year earlier, citing a disciplined underwriting approach in its property & casualty business lines, consistent returns from the life & health segment and a rising contribution from its financial services.

Analysts polled by AFX News forecast net profit to reach 3.268-3.882 bln sfr or 3.641 bln on average.

InBev FY net rockets on higher sales driven by Lat America volumes

BRUSSELS (AFX) - InBev SA said its net profit has rocketed year-on-year, in-line with expectations, on higher sales and driven by volume growth in Latin America, with the brewer eclipsing its long-term operating margin target.

Full year net for the Leuven-based group soared to 1.41 bln eur from 904.0 mln last year and in line with 1.35-1.49 bln forecasts. For the fourth quarter, net jumped to 371.0 mln eur from 165.0 mln.

Telefonica FY net up 40.2 pct at 6.233 bln eur vs 4.446 bln; in line

MADRID (AFX) - Telefonica SA said net profit grew 40.2 pct to 6.233 bln eur in the full year to December from 4.446 bln a year earlier, in line with analysts’ forecasts for 4.113-6.898 bln, on revenues of 52.901 bln, up from 37.383 bln.

In a statement, the telecos giant said operating income before depreciation and amortisation (OIBDA) rose to 19.126 bln eur from 15.056 bln, also in line with forecasts for 13.913-20.876 bln.

Aker Q4 EBITDA flat as asset value jumps to 36 bln nkr vs 19 bln

OSLO (AFX) - Aker ASA posted fourth quarter EBITDA of 1.06 bln nkr, broadly level with last year’s 1.04 bln, as the value of the holding company’s listed assets surged to 36 bln nkr from 19 bln a year earlier.

Aker holds substantial stakes in a number of companies, including Aker Kvaerner ASA, Aker Yards ASA, Aker American Shipping ASA and Aker Seafoods ASA.

Merck sees 2008/09 EBIT margin unchanged vs 2007/8

FRANKFURT (AFX) - Merck KGaA said it expects its 2008/09 EBIT margin for its five divisions -

Ethicals, Serono, Consumer Health Care, Liquid Crystals and Performance Life Science - to be unchanged from its expectations for 2007/08.

Allianz plans to enter Japanese life insurance market in 2008

FRANKFURT (AFX) - Allianz SE is planning to enter the Japanese life insurance market next year, a company spokeswoman said, confirming Japanese media reports.

“We are currently launching a 100 pct Allianz unit (in Japan),” she said, adding that business operations are to begin there in 2008.

Italy 2006 unadjusted GDP up 1.9 pct yr-on-yr; public deficit 4.4 pct of GDP

ROME (AFX) - Italy’s GDP, unadjusted to the number of working days, rose 1.9 pct year-on-year in 2006 compared with a 0.1 pct rise in 2005, according to the statistics office ISTAT.

ISTAT added that the public deficit totalled 4.4 pct of GDP compared with 4.1 pct a year earlier.

Swedish Q4 GDP growth 4.7 pct year-on-year

COPENHAGEN (AFX) - Sweden’s calendar-adjusted GDP rose by 4.7 pct during the fourth quarter 2006 compared to a year earlier, Statistics Sweden reported.

Compared to the third quarter 2006, the seasonally adjusted GDP grew by 1.2 pct.

Randstad, Mittal to join AEX index from tomorrow, Getronics relegated to midcap

AMSTERDAM (AFX) - Randstad Holding NV and Mittal Steel Co NV/Arcelor Mittal will join the benchmark AEX index from tomorrow, Euronext said.

Getronics NV will drop from the AEX to the midcap AMX index, with BinckBank NV, SNS Reaal Groep NV and Tele Atlas NV also joining the AMX.

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Briefing: 4 Globe foreign bureaus to be cut, editor says

March 30th, 2007

NEW YORK: 4 Globe foreign bureaus to be cut, editor says

The Boston Globe, a newspaper owned by The New York Times Co., will close its last overseas news bureaus to save more than $1 million a year.

By shutting the operations in Jerusalem, Berlin and Bogota, the Globe’s editor, Martin Baron, said that he would avoid cutting about a dozen jobs in Boston. The four reporters working in the bureaus will be offered places in Boston, Baron said in a memorandum on Wednesday.

The latest cutbacks follow the elimination of 125 jobs in the New England Media Group of The New York Times Co., which also owns the International Herald Tribune.

Separately, The New York Times Co. has refused to list on its proxy a proposal from a Morgan Stanley investment fund that called for putting the company’s two-class share structure to a vote. $@

Telstra fights ruling that gives rivals access

CANBERRA:Telstra, the largest telephone company in Australia, said Wednesday that it planned to challenge rules giving rivals access to its network in the nation’s highest court.

Australia’s competition regulator is acting against the constitution by forcing Telstra to provide services at below cost, the company said.

“It’s an unusual action for a company to take in Australia, representing their frustration,” said Scott Marshall, an analyst at Shaw Stockbroking in Sydney.

Telstra shares have fallen 15 percent since the company’s chief executive, Sol Trujillo, was appointed in July 2005 and began warning that rules were destroying the company’s value.

Telstra has been losing market share as rivals including Singapore Telecommunications use its copper- wire network to offer competing services. $@(Bloomberg)

Adelphia bankruptcy isn’t over, judge rules

NEW YORK:Adelphia Communications, once one of the largest U.S. cable television companies, cannot move ahead with its $15 billion plan to pay creditors and exit bankruptcy protection, the Judge Shira Scheindlin of U.S. District Court in New York ruled.

The delay will further postpone full trading in shares of Time Warner Cable, which Adelphia creditors are to receive as part of their payout. The shares were to begin trading officially Monday on the New York Stock Exchange. $@(Bloomberg)

TelefÑƒnica, the largest phone company in Spain, plans to start cellular operations in Slovakia on Feb. 2, offering prepaid services to clients.

$@(Bloomberg)

European Union regulators ruled that Italian government subsidies for digital television decoders in 2004 and 2005 violated EU rules and said that broadcasters who had benefited most should repay the money. But they cleared separate subsidies granted last year, saying that the later aid had not distorted competition among different transmission platforms. $@ (AP)

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Market report: Friday latest

March 30th, 2007

ICI led blue-chips higher with a rise of 4p to 465p as talk of a bid from Dutch rival gathered pace. The Crown paint group has put its Organon drugs business up for sale instead of floating its separately.

Bids for Organon are expected to reach 5.4bn, providing Akzo with the funding to launch an assault on one of the most famous names in UK business.

Late last year, ICI sold its Quest subsidiary for 1.2bn, enabling it to reduce debts and tackle its growing pension deficit. That has made it attractive to would-be suitors.

Elsewhere in the market, the sell-off continued apace following another lacklustre performance overnight on Wall Street where the absence of an interest rate cut continues to weigh heavily on sentiment. The FTSE 100 index fell 16.5 to 6270.5.

Fashion retailer rose a further 6p to 1862p as brokers continued to reflect on yesterday’s Christmas trading update. Broker ING has raised its recommendation from hold to buy but says that weak sales continue to cause concern. Next still trades at a 29% discount to the rest of the retail sector.

However, rival broker has raised its sights on Next from 2050p to 2170p and repeated its rating.

Despite poor autumn trading conditions, tight control of stocks was achieved. This meant second-half margin performance was significantly ahead of expectations.

Ark Therapeutics’ final-stage trials of an experimental drug to treat brain cancer has been cleared to continue without modification, by Europe’s medicine regulator. Cerepro is already being assessed by the regulators for marketing approval and the outcome should be known by the end of March.

The drug, for the treatment of high-grade glioma, or malignant brain tumour, is the first gene-based medicine to undergo full regulatory scrutiny outside of China. It has been shown in previous trials to extend life by 7.5 months, giving around 15.5 months’ survival in a disease where most patients will live for only eight months. Ark rose 3p to 106p.

, which last week sold its gaming websites to rival marked time at 42p. It emerged late yesterday that chief executive Noam Lanir had bought a further fourm shares at 42.69p, raising his stake in Empire to 101.1m shares, or 34.5%.

Investors were in cautious mood in New York overnight. Even so, shares managed to claw back opening losses with the help of demand for technology stocks. They outperformed blue-chip and oil companies, which had been suffering from the sharp downturn in the price of crude. The Dow closed up just 6.19 at 12,480.69.

In Tokyo today, shares suffered their biggest one-day loss in six weeks as profit-takers moved in, targeting exporters such as Honda and Fanus and steelmakers. The Nikkei 225 shed 262.08 to 17,091.59.

In Hong Kong, profit-taking also took a toll after the market’s record run but the Hang Seng index rallied to end the day up 185.70 at 20,211.28.

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