- Title: GERMANY/FRANCE: SHARES IN FRANKFURT AND PARIS CONTINUE TO PLUNGE.
- Date: 22nd July 2002
- Summary: (U4) FRANKFURT, GERMANY (JULY 22, 2002) (REUTERS - ACCESS ALL) 1. GV: EXTERIOR OF FRANKFURT STOCK EXCHANGE 0.06 2. GV: WIDE OF DAX INDEX BOARD, TRADERS IN FOREGROUND 0.12 3. MCU/CU/GV/ZOOM: NOTEBOOK IN TRADERS HANDS, PAN TO TRADERS FACE; DAX INDEX BOARD SHOWING LOW AT 10:40 A.M. (0840 GMT); TRADERS LOOKING ON; PULLOUT FROM BANK SHARES ON BOARD; NUMBERS ON DAX BOARD (5 SHOTS) 0.42 4. CU: SOUNDBITE (German) FIDEL PETER HELMER, HAUCK & AUFHAEUSER BANK, SAYING: "We have been looking at negative figures for the past two-and-a-half years and no one would have dreamt about such a setback. "Originally, it was thought that only the Neuer Markt would be affected. But now, we are looking at standard values too, and one or the other standard value in Germany has been talked about. Bad news, because of bad management, must stop. "Bad news every once in a while is normal at the stock exchange, but a situation in which people must be afraid that end results were manipulated must stop." 1.26 5. MV/TV/GV: TRADERS ON TELEPHONES; HIGH SHOT OF FLOOR; WIDE OF DAX INDEX BOARD AT 12:10 P.M. (1010 GMT) (3 SHOTS) 1.47 (W4) PARIS, FRANCE (JULY 22, 2002) (REUTERS TV - ACCESS ALL) 6. GV/CU: WIDE OF EXTERIOR OF CREDIT LYONNAIS; ENTRANCE TO CREDIT LYONNAIS (2 SHOTS) 1.56 7. GV/MV/CU: VARIOUS OF STOCK EXCHANGE ROOM (5 SHOTS) 2.13 8. MCU: (SOUNDBITE) (English) HERVE GOULLETQUER, CREDIT LYONNAIS ANALYST, SAYING: "The goals of the French government are not so easy to reach because, at the same time, it wants to reduce the budget deficit and it wants to cut taxes. If we have a quite good level of growth, it is not a big problem. Implementing these two issues is easy to do. But, if the level of growth is less large than expected, at the same time observing the decline of the deficit and the cut of taxes will be extremely difficult. The only solution will be to implement huge cuts of public spendings. Is it possible in a context in which the economic growth will not be so large?" 3.13 9. MV/MCU: VARIOUS OF STOCK EXCHANGE ROOM (2 SHOTS) 3.20 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 6th August 2002 13:00
- Keywords:
- Location: FRANKFURT, GERMANY / PARIS, FRANCE
- City:
- Country: France Germany
- Reuters ID: LVA2GAV86I4CWVCHYJLXG0ZHDWU6
- Story Text: Germany's DAX index has plunged three per cent to a
nine-month low, dragged down by financial stocks which
crumbled in the wake of WorldCom's bankruptcy filing and a
profit warning from Dutch insurer Aegon.
And French shares look to be heading for more pain, as
widespread investor concerns over corporate practices and
earnings prospects continue to take their toll on battered
equities markets.
Deutsche Bank and insurer Allianz on Monday (July 22)
led the rout amid growing concern about the solvency of
insurance companies in the face of crashing equity markets.
Deutsche Bank shed 3.95 per cent with poor financial
sector sentiment compounded by fears about Germany's biggest
banks $1 billion exposure to U.S. telecoms giant WorldCom.
"Bad news, because of bad management, must stop. Bad news
every once in a while is normal at the stock exchange, but a
situation in which people must be afraid that end results were
manipulated must stop," Fidel Peter Helmer of Hauck &
Aufhaeuser bank told Reuters Television.
Weak Siemens and Deutsche Telekom stock piled on the
pressure, helping to drive the DAX 3.7 per cent lower to
3,747.94 points, a level not seen since September 21. The
slide wiped 18 billion euros from the index's market value.
Allianz shares were 3.79 per cent lower and Munich Re was
3.91 per cent down.
Shares in DaimlerChrysler fell 4.23 per cent to 42.38
euros after the group said late on Friday (July 19) that U.S.
federal officials had launched a criminal investigation into
allegations that Mercedes colluded with dealers to fix prices
on cars sold in the New York area.
Tech shares led by Siemens and Deutsche Telekom also
plummeted in the wake of Wall Streets fall to its lowest level
in five years.
Meanwhile, in France, shares sank in early deals on Monday
with the news that U.S. telecoms giant Worldcom had filed for
bankruptcy protection.
The French CAC 40 index fell 2.7 % to 3,234.8 points in
early trading due to investors' lack of confidence.
Analyst Herve Goulletquer said that Credit Lyonnais
exposure to WorldCom was not a big surprise for the French
equity market, but it would intensify pessimism. But he said
the fall of French shares would make it difficult to reduce
France's budget deficit at the same time as cutting taxes.
"If we have a quite good level of growth, it is not a big
problem. Implementing these two issues is easy to do. But, if
the level of growth is less large than expected, at the same
time observing the decline of the deficit and the cut of taxes
will be extremely difficult. The only solution will be to
implement huge cuts of public spendings," he said.
WorldCom, saddled with a mountain of junk-rated debt and
hit by a $3.85 billion accounting scandal, filed the
largest-ever U.S. bankruptcy over the weekend.
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