Milan shares higher midday; Pirelli, banking shares in spotlight

Milan shares higher midday; Pirelli, banking shares in spotlight

	Published : Fri, 12 Jan 2007 12:58 By : Agencies Print this Story

MILAN (AFX) - Share prices were buoyant at midday, with sentiment boosted by Wall Street's record close yesterday and the rising markets in Asia, with focus on Pirelli

and banking shares, dealers said.

At 12.30 pm, the Mibtel index rose 1.27 pct to 32,210 and the S&P/Mib was up 1.41 pct at 41,942, while volumes stood at 2.17 bln eur.

Pirelli shares led the way, up 2.51 pct at 0.81 eur, amid reports that Indian conglomerate Hinduja was mulling taking a minority stake in Olimpia, a holding company 80 pct controlled by Pirelli that has 18 pct of Telecom Italia.

Pirelli chairman Marco Tronchetti Provera has already stated that he would be willing to reduce Pirelli's stake in Olimpia, and analysts said it was a question of the price at which he would reduce his stake.

'I don't think he'll ever sell at a price that is close to the current price of Telecom Italia. If he does reduce to sell his stake he will do so at 3 eur per share or slightly less,' said an analyst who did not want to be named.

In announcing its 9-months results, Pirelli amended the book value of its stake in Olimpia, with the result that its Telecom Italia stake was valued at 3 eur per share.

Telecom Italia was up 0.89 pct at 2.37 as ING upgraded it to 'buy' from 'sell' with a 2.6 eur target price in light of the 'improving fundamentals, appealing valuation and possible positive impact from corporate action, including asset disposal and share buy-backs', which could act as a catalyst.

Banking shares were stronger, with Popolare Verona e Novara up 1.14 pct at 22.99 and Intesa Sanpaolo gaining 0.99 pct at 5.79.

Intesa Sanpaolo, which started trading as a single company at the start of this year, is the result of the merger of Banca Intesa and Sanpaolo IMI.

'After a cold welcome to the market I think the sell-off process that we witnessed at the beginning of the year has come to an end,' a dealer said.

The stock was also benefiting from a Citigroup report that confirmed the 'buy' rating while upping the target price to 6.4 eur from 5.7 eur.

Popolare Italiana gained 0.95 pct at 11.42 after the Deutsche Bank upgrade to 'buy' from 'hold' with a 13.4 eur target price.

Generali fell 0.56 pct at 33.75 after Lehman Brothers' downgrade to 'underweight' from equalweight and its unit Alleanza shed 0.47 pct at 10.15 as Lehman started the stock at 'underweight'.

Among other insurers, Lehman started Unipol and Mediolanum at 'overweight' and Fondiaria-SAI at 'equalweight'.

Unipol was up 0.25 pct at 2.85, Mediolanum lost 0.08 pct at 6.29 and Fondiaria-Sai rose 0.14 pct at 36.28.

yael.schrage@thomson.com

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