Helsinki shares end higher, led by M-real UPDATE

Helsinki shares end higher, led by M-real UPDATE

	Published : Thu, 25 Oct 2007 17:13 By : Agencies Print this Story

(Updates with full report)

HELSINKI (Thomson Financial) - Shares finished higher with several blue chip stocks in demand, including M-real, which surged on signs that its turnaround programme is bearing fruit and conditions in the paper market are improving.

The OMX Helsinki 25 rose 1.36 pct to 3,288.28, with gains capped by falls for Metso and Outotec on the back of their third-quarter reports.

The OMX Helsinki all-share index finished up 1.54 pct at 12,353.44. Volume was a tad short of 2 bln eur.

M-real soared 7.14 pct to 3.90 eur after third-quarter earnings just beat expectations and it said prices in key grades could rise before the end of the year. Glitnir repeated its 'buy' stance and target price of 7 eur, saying production cuts announced by peer Stora Enso today would bolster paper prices.

Stora, the world's largest paper producer, plans to slash yearly paper and pulp production capacity by a million tonnes by closing mills in Finland and Sweden next year.

Some 1,700 jobs will go under the plan that will trim the company's sales by 370 mln eur a year and costs by 140-160 mln eur.

Shares in Stora, which also revealed a drop in third-quarter operating earnings today, ended the session up 0.34 pct at 11.79 eur, and off earlier highs, while UPM-Kymmene finished up 3.12 pct at 14.85 eur.

'Stora Enso's action to reduce capacity is good news and the timing is close to perfect, if you take into account that price negotiations (with customers) will take place at the beginning of next year,' said Evli Bank analyst Teemu Salonen.

However, analysts stressed further restructuring by the industry is needed if the major players want to see any big leaps in profitability.

Nokia, once again the most liquid stock, rose 2.02 pct to 27.23 eur. The group consolidated its stranglehold on the global mobile phone market in the third quarter, taking more share than its three biggest rivals combined, according to new figures from Strategy Analytics.

There were also solid gains for Kone, up 4.58 pct at 56.63 eur, and YIT, up 3.57 pct at 20.30 eur, with Huhtamaki climbing 6.60 pct to 9.21 eur. Huhtamaki said it is considering various strategic measures for the business to boost profits, including options for its troubled UK consumer goods unit.

However, Metso fell 5.33 pct to 44.23 eur and Outotec 3.49 pct to 47.31 eur. Metso posted third-quarter profits and booked new orders below what analysts had expected. Outotec's third-quarter report also disappointed.

james.etheridge@thomson.com

je/lam

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.