Nordic markets were up sharply on Tuesday. Euro received a boost from on news of surprisingly strong demand for sovereign funds. The AAA rated eurozone countries and those closer to junk status are butting heads. The suggestion from Belgium a while back to double the rescue fund can be understood in the context of who is the next in line. Adding and adding to th e rescue fund is not a long term solution. There has to be an amendment that introduces credible threats for falling out of line, if the EU still plans to try such a loosely governed model with join currency.
On January 7th the news that Stora Enso and Arauco received environmental permit for the 1.3 million tonne pulp mill hit the newswires. At that time Stora Enso said the decision had not been made about wether to make the investment. Little more than a week was apparently long enough for the final decision as the companies announced today that the plant will indeed be built at Punta Pereira. The wood will be from own plantations nearby (there is quite a bit of debate on the effect of Eucalyptys plantations on soil fertility). This will be the biggest private investment ever in Uruguay. Stora Enso continued recent uptrend with another 4% push higher. The news pushed other pulp & paper sector stocks markedly higher as well.
Alliance oil foresees higher oil prices and solid demand in 2011. On the downside for the company, fiscal pressures (albeit the company expects to benefit from production that is exempt from MET tax going forward) and higher cost inflation are expected as well. Longer term the company projects increased free cash flow. During 2010 the company development and exploration program resulted in 75 new wells, with a handfull of them underperforming. The markets were disappointed at the production update and the stock was down nearly 5 percent.
Civil damage claims for anticompetitive practises have been filed against KONE’s german subsidiary. The total amount of the claims is 71 million. In more positive news, KONE won an order for 93 elevators for Jaber Al Ahmad Al Jaber Al Sabah Hospital project in Kuwait.
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