Stock Commentary - Europe - week to Oct 13, 2008

EUROPEAN: bourses extended their previous week's declines, falling sharply in the reporting period to October 13, despite the strong rebound on the last day following concerted action to stabilize the banking system, leading to a 10.1% surge in the FTSE Eurofirst index. What might have been seen as defensive plays in a battered market, drug majors also took a hammering, particularly on October 19 on no particular news other than that health care was out of favor. In PARIS, there was a 10.2% slump in Sanofi-Aventis, compared with a 4.9% fall in the CAC 40. The stock got an investment recommendation from Tim Brown writing in The Street. com, when it hit a 52-week low. With the fourth-quarter financial reporting season about to take off, there seemed to be little news for the pharmaceutical sector. Other drug majors underperforming domestic indexes were Novartis falling 9.9% in ZURICH; Merck KGaA and Bayer in FRANKFURT, down 13.1% and 9.8% respectively; and UCB dropping 10.9% in BRUSSELS. There was also an 8.6% decline in MILAN for Sorin, despite news that it has received an offer for its renal care business (see page 2), which would free the firm to concentrate on its cardiovascular francise.

LONDON: share prices moved much in line with the rest of Europe, with only little Antisoma seeing a rise, up 7.0%. The stock was helped by the news that Antisoma has started a Phase II trial looking into adding its AS102 to letrozole in post-menopausal women on first-line therapy for advanced breast cancer. Drug majors AstraZeneca and GlaxoSmithKline fell 8.9% and 8.6%, respectively, despite an earnings upgrade for the former from Citigroup, with a price target of L23.12.