Brussels shares close higher; KBC surges on better-than-expected Q1 UPDATE

Brussels shares close higher; KBC surges on better-than-expected Q1 UPDATE

	Published : Wed, 16 May 2007 17:52 By : Agencies Print this Story

(Updates with full report)

BRUSSELS (Thomson Financial) - Shares closed higher, boosted by financial services company KBC Group which surged after posting better-than-expected first quarter results, analysts said.

At the close, the Bel 20 was up 10.84 points or 0.23 pct at 4,673.30.

KBC was up 3.70 eur or 3.73 pct at 102.91 eur. The bank posted first quarter results that showed net and underlying profit which beat analysts' forecasts, as well as announcing a 25 mln eur capital gain expected from its forthcoming sale of a stake in Hungary's GBC.

'At first sight, KBC reported much stronger than expected results,' said Rabo Securities analyst Thomas Nagtegaal.

He said it was due to lower bad debt provisions, one-off items of 7 mln eur and 'extremely strong results at the Merchant Bank'. He kept his 'buy' rating and 110 eur target price.

Degroof analyst Ivan Lathouders said in a note to clients that 'the first quarter exceeded our expectations, which were already ahead of analyst consensus'.

'Not only are the results better than expected (both on an underlying and reported basis) but the quality is also very good,' he added.

'The outlook is excellent,' added Lathouders, noting April was a 'strong month' and would include some 39 mln eur of capital gains on the sale of Banco Fumagalli in Italy and GBC in Hungary.

Peer Fortis was down 0.48 eur or 1.48 pct at 32.05 eur and Dexia dipped 0.16 eur or 0.66 pct to 24.09 eur.

Healthcare group Omega Pharma was up 0.57 eur or 0.97 pct at 59.25 eur and supermarket group Delhaize rose 0.52 eur or 0.71 pct to 73.75 eur.

InBev was up 0.40 eur or 0.68 pct at 58.99 eur. After the market closed, the brewer said it has taken a 49 pct shareholding in a 'long-term' joint venture agreement with Indian peer RKJ Group.

The group has the option to increase its stake at a later time. It will be InBev's 'exclusive vehicle' to invest in the 'promising' Indian beer market, the group said. Financial terms were not disclosed.

Separately, the group plans to sell its majority stake in real estate unit Immobrew.

The sale of 824 cafes is likely to be a lucrative undertaking for the group, with real estate prices rising more than 50 pct since 2000.

Financial daily De Tijd said InBev declined to comment on the current value of the real estate, but according to the paper, Immobrew's most recently published balance sheet shows its fixed assets amounted to some 900 mln eur.

Belgacom was up 0.20 eur or 0.62 pct at 32.65 eur after the telecoms group posted first quarter results which came in above analysts' expectations, as Petercam upped its rating to 'buy' from 'hold on the stock and reiterated its 36.81 eur target price.

Petercam analyst Thijs Berkelder said in a note to clients that 'thanks to better than expected revenues in fixed and mobile, Belgacom succeeded in beating consensus expectations, especially in the mobile division', and added that he thinks the company 'must be able to gain some edge against its mobile competitors thanks to its new convergence offerings' in the remainder of 2007.

Net profit came in at 319 mln eur against 215 mln eur for the first quarter of 2007, well above analysts' expectations of 213-220 mln eur.

For the fallers, steel cord and wire manufacturer Bekaert was down 2.89 eur or 2.78 pct at 100.91 eur after going ex-dividend.

Suez dipped 0.06 eur or 0.14 pct to 42.27 eur. Gas Natural chairman Salvador Gabarro said the utility is a 'friendly shareholder', playing down ongoing bid speculation in the wake of the French group's agreement to raise its stake to 11.3 pct from an initial 5.4 pct.

Outside the Bel 20, GIMV was down 0.12 eur or 0.23 pct at 50.98 eur. The venture capital group said it will sell a maximum of 1,285,713 shares in TV facilities group Alfacam shares in the company's IPO.

Roularta was up 0.51 eur or 0.77 pct at 66.62 eur. The media group said it plans to launch a new monthly magazine in September, which will advise readers on how to spend and invest their money.

'Moneytalk' will benefit from the expertise of journalists in weekly financial magazine 'Cash', who will contribute to the publication, as well as support from its French L'Express-L'Expansion unit, which publishes weekly magazine 'Mieux Vivre Votre'.

Bedding and foam manufacturer Recticel was 0.16 eur or 1.52 pct higher at 10.68 eur, after KBC lifted its target price on the stock to 12.0 eur from 10.0, but left its 'accumulate' rating unchanged.

KBC analyst Wim Hoste said in a note to clients that he is 'more and more convinced' that the outcome of the group's strategic review -- which will be communicated to investors by the end of August -- 'could very well be that the group continues with the same structure as today, possibly with a limitation of investments in the group's US automotive business'.

Chemicals company Tessenderlo was up 42.93 eur or 1.43 pct at 3.45 eur.

simon.zekaria@thomson.com

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