Brussels shares close up, index over 4,000 points; Belgacom rises UPDATE

BRUSSELS (AFX) – Shares closed higher, boosted by Wall Street gains, with telecoms group Belgacom leading the blue-chips, traders said.

At the close, the Bel 20 was up 50.11 points or 1.26 pct at 4,021.99 — past the benchmark of 4,000 points for the first time.

Belgacom was up 0.98 eur or 3.41 pct at 29.76 eur.

A KBC trader said Belgacom’s performance was boosted by its ongoing share buyback program. The trader also said sentiment on the stock has been boosted by a delayed cut in telecom termination rates.

Healthcare group Omega Pharma was up 0.88 eur or 2.01 pct at 44.67 eur.

For the heavyweight financials, Fortis rose 0.57 eur or 1.84 pct to 31.62 eur, KBC Group was up 1.30 eur or 1.57 pct at 84.30 eur and Dexia was up 0.25 eur or 1.26 pct at 20.08 eur.

Delta Lloyd Securities analyst Carlo Ponfoort raised the broker’s target price on Dexia to 22.00 eur from 20.75.

He said this was due to ‘higher EPS estimates and the new targets we expect at Dexia’s Investor Day next week.’

Supermarket group Delhaize was up 1.10 eur or 1.80 pct at 62.20 eur amid renewed media reports that the company is in merger talks with Dutch peer Royal Ahold, dealers said.

A spokesman for Delhaize said: ‘We do not comment on rumours.’

Delta Lloyd Securities analyst Pascale Nachtergaele pointed to possible difficulties with competition authorities in case of a proposed merger deal, and that large investments would be needed ‘as Ahold needs to refurbish its store network’.

However, Nachtergaele concluded that a merger ‘could (for Ahold) be a way to escape from hedge funds. For Delhaize, it could be an opportunity to strengthen itself.’

Delta Lloyd Securities holds Ahold at ‘accumulate’ with a 8.20 eur price target.

‘We do not believe that ‘big’ is necessarily beautiful,’ said KBC analyst Pascale Weber.

‘A merger of Ahold’s and Delhaize’s food retail activities in the US will lower the average performance… We feel that Ahold will benefit from a potential deal but we fear that it will represent a drain on Delhaize’s managerial and financial resources’.

Utility Suez rose 0.45 eur or 1.30 pct to 35.05 eur. French finance minister Thierry Breton predicted the parliamentary bill to authorise the merger of Gaz de France and Suez will pass with a crushing majority.

He made the comment on France Inter radio, where he also said the risks are ‘very limited’ that there would be a public offer to acquire Gaz de France after its privatisation — referring to the entity generated by the planned merger with Suez, noting that the state would still have a blocking minority of shares.

Brewer InBev climbed 0.08 eur or 0.18 pct to 43.33 eur.

For the fallers, imaging technology and software group Agfa-Gevaert fell 0.05 eur or 0.27 pct to 18.42 eur.

Colruyt dipped 0.30 eur or 0.22 pct to 136.00 eur. The discount supermarket group said it expects net profit of 247 mln eur in 2006/7.

Outside the Bel 20, Van de Velde rose after it published strong first-half profit and sales.

The stock was up 0.69 eur or 2.00 pct at 35.19 eur.

Analyst Natalie Sierens at KBC told AFX News results were ‘slightly better than expected,’ and said she was ‘absolutely’ pleased with them.

The broker will review its earnings model, and currently has a ‘buy’ rating and 37.00 eur target price on the stock.

Van de Velde’s first half EBIT was 21.5 mln eur, up from 19.2 mln last year, and above KBC’s estimate of 21.2 mln.

The group also said that it expects sales growth in the second six months to be around 5 pct, which ‘guarantees annual growth in sales in excess of 8 pct’.

Source- http://www.forbes.com

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