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+ SAAB PRICE ESTIMATE RAISED TO SK200 VS SK185 AT CREDIT SUISSE
+ ABN AMRO PRICE ESTIMATE RAISED TO EU27.36 FROM EU24 AT HSBC
+ LOGICACMG PRICE EST. RAISED TO 235P FROM 228P AT CREDIT SUISS
+ ARCELOR PRICE FORECAST RAISED TO EU36 FROM EU33.80 AT ING
+ LVMH RAISED TO `OVERWEIGHT’ FROM `EQUALWEIGHT’ AT LEHMAN
+ EUROPEAN BANKS RAISED TO `NEUTRAL’ FROM `UNDERWEIGHT’ AT ABN
+ WPP PRICE ESTIMATE RAISED TO 771P FROM 738P AT JPMORGAN

- ALLIANCE & LEICESTER PRICE ESTIMATE CUT TO 814P AT LEHMAN
- AIR LIQUIDE PRICE ESTIMATE CUT TO EU175 FROM EU178 AT LEHMAN
- SUEZ DOWNGRADED TO NEUTRAL FROM BUY AT UBS
- VODAFONE PRICE ESTIMATE CUT 12% TO 145P AT ABN AMRO
- VODAFONE SHARE-PRICE ESTIMATE CUT TO 130P FROM 140P AT LEHMAN
- VODAFONE PRICE ESTIMATE CUT TO 108P FROM 113P AT JPMORGAN
- SUEZ CUT TO `HOLD’ FROM `BUY’ AT CITIGROUP
- REUTERS PRICE ESTIMATE CUT TO 380P FROM 620P AT CREDIT SUISSE
- REUTERS CUT TO `NEUTRAL’ FROM `OUTPERFORM’ AT CREDIT SUISSE
- VODAFONE PRICE ESTIMATE CUT TO 120P FROM 130P AT CREDIT SUISSE
- BELGACOM PRICE EST. CUT TO EU27.5 FROM EU30 AT MORGAN STANLEY
- VODAFONE SHARE-PRICE ESTIMATE CUT TO 145P FROM 150P AT UBS

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** HEADLINES **

- European Executive, Consumer Confidence May Have Risen to a Five-Year High
- Bondholders Boycott European Debt, Demand Protection Amid Record Takeovers
- Cable & Wireless to Cut as Many as 3,000 U.K. Jobs Over Four-Five Years
- Volkswagen, Renault, European Car Shares’ Rally Draws Investor Skepticism

** IN PLAY TODAY **

- Earnings of note: amongst others Gas Natural, Axa, Telefonica Moviles, Gamesa (Est) , ENI, RBS, Porsche, BAT, Eiffage (after close), Erste Bank, Vinci (after close) and Iberia.

- Porsche AG said yesterday that first-half profit rose 15 percent, more than the carmaker estimated last month, as customers bought new versions of the Boxster and 911 sports cars. Net income in the six months ended Jan. 31 rose to 169.8 million euros ($201 million) from 148.3 million euros a year earlier. That was a touch higher than reported at the preliminary stage.

- Axa SA had a 5.5 percent drop in second-half profit, hurt by U.S. hurricane losses and costs related to its sale of Advest Group Inc. Net income fell to 1.9 billion euros from 2.01 billion euros a year earlier. That’s more than the 1.62 billion-euro median estimate of 10 analysts surveyed by Bloomberg. Operating income, excluding one-time items and acquisition-related costs, rose 21 percent to 1.5 billion euros.

- Telefonica Moviles SA said fourth-quarter profit rose 38 percent, bolstered by its $5.85 billion
acquisition of BellSouth Corp.’s wireless units in Latin America. Net income rose to 376.2 million euros from 273.3 million euros a year earlier. That’s less than the median estimate of 451 million euros in a Bloomberg survey of seven analysts. Sales rose 29 percent to 4.46 billion euros.

- Royal Bank of Scotland Group Plc said 2005 profit rose 17 percent, lifted by corporate lending and consumer banking in the U.S. Net income rose to 5.39 billion pounds or 168.3 pence a share, from 4.62 billion pounds, or 155.9 pence, a year earlier. Profit missed the 5.45 billion-pound median estimate of 11 analysts surveyed by Bloomberg. Revenue gained 14 percent to 25.6 billion pounds. The company also said it plans to buy back as much as 1 billion pounds of shares.

- British American Tobacco Plc said 2005 profit dropped 37 percent because a gain from merging its U.S. businesses into Reynolds American Inc. didn’t recur. Net income fell to 1.77 billion pounds, or
83.85 pence a share, from 2.83 billion pounds, or 131.12 pence, a year earlier. Analysts had expected
earnings of 1.63 billion pounds,

- Iberia Lineas Aereas de Espana SA posted a fourth-quarter loss as fuel costs rose. The carrier had a loss of 6.1 million euros compared with net income of 49.9 million euros a year earlier. Sales increased 4.5 percent to 1.22 billion euros. Expansion by discount competitors such as Ryanair Holdings
Plc and EasyJet Plc and higher fuel costs are prompting conventional carriers including Iberia to cut costs. Iberia in October said it aims to reduce the workforce by 9 percent in the next three years as part of a plan to generate savings and revenue of about 600 million euros. These results fell shy off analyst forecasts.

- Erste Bank AG, Austria’s second-biggest bank, said higher lending in eastern Europe helped propel profit to a record in the fourth quarter as more people in former communist countries took out home and auto loans. Net income increased to 202.9 million euros from 157.2 million euros a year earlier. Profit beat the 177 million-euro median estimate of eight analysts surveyed by Bloomberg News. Erste said it plans to raise its dividend by 10 percent to 55 cents a share.

- Gas Natural is due to hold a board meeting to discuss 2005 results and the impact
of government regulations passed last week to curb wholesale prices and hamper a bid by E.ON AG for Spanish power company Endesa SA. Gas Natural SDG SA will consider raising its 23.5 billion-euro ($27.9 billion) hostile offer for Endesa SA, Spain’s largest power company, to compete with a bid
from E.ON AG, people familiar with the situation said.

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** HEADLINES **

- Oil Falls as Iran, Russia Reach Agreement, Concern Over Saudi Attack Eases
- Gold Prices Drop as Declining Energy Costs Diminish Inflation Concerns
- NYSE Set to Go Public After 213 Years as SEC Approves Archipelago Takeover

- Japan Industrial Production Rises for Sixth Month, Longest Gain Since 1997
- India Expects 8.1 Percent Growth in Year to March, Finance Minister Says
- Asian Commodity Stocks Decline, Led by BHP, Inpex on Drop in Copper, Oil
- Samsung Electronics Raises Its 2006 Sales Target to $67 Billion on Phones
- New Zealand Business Confidence Falls to 15-Year Low on Risk of Recession

** IN PLAY TODAY **

A big day today on the macro front with Q4 GDP, Personal Consumption and GDP Price Index being published at 14:30 CET followed by the Chicago Purchasing Managers Index, Richmond Fed, Consumer Confidence and Existing Home Sales at 16:00 CET. ABC Consumer Confidence closes the day at 23:00 CET. Earnings of note are from Autodesk, Williams Cos, Centerpoint Energy and King Pharmaceuticals.

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*AL JAZEERA REPORT ON IRAN EXPLOSIONS CITES ASSOCIATED PRESS
*IRANIAN EXPLOSIONS LEAVE CASUALTIES, AL JAZEERA REPORTS
*IRAN CITIES DEZFUL, ABADAN HIT BY EXPLOSIONS, AL JAZEERA SAYS

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+ LONMIN PRICE EST. RAISED TO 1960P FROM 1740P AT DEUTSCHE BANK
+ LLOYDS TSB PRICE EST. RAISED TO 610P VS 580P AT DEUTSCHE BANK
+ LINDT & SPRUENGLI RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ LLOYDS TSB PRICE ESTIMATE RAISED TO 512P FROM 477P AT LEHMAN
+ MARKS & SPENCER PRICE EST. RAISED TO 560P FROM 530P AT LEHMAN
+ INBEV RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ NUMICO RAISED TO `BUY’ FROM `NEUTRAL’ AT MERRILL LYNCH
+ UNILEVER SHARE-PRICE ESTIMATE RAISED TO 570P FROM 555P AT UBS
+ BARCLAYS PRICE ESTIMATE RAISED 9.5% TO 690P AT HSBC
+ SAP RAISED TO `NEUTRAL’ FROM `UNDERWEIGHT’ AT HSBC
+ ZURICH FINANCIAL PRICE EST. RAISED TO SF290 AT CREDIT SUISSE
+ ING PRICE ESTIMATE RAISED TO EU36 FROM EU34 AT CREDIT SUISSE
+ MICHAEL PAGE RAISED TO `OUTPERFORM’ FROM `IN-LINE’ AT GOLDMAN

- BELGACOM SHARE-PRICE ESTIMATE CUT TO EU30 FROM EU34 AT LEHMAN
- ENI CUT TO `UNDERWEIGHT’ FROM `NEUTRAL’ AT HSBC

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** HEADLINES **

- National Grid to Buy KeySpan for $7.3 Billion, Doubling Its U.S. Customers
- Suez, Gaz de France to Merge, Form Company With $76 Billion Annual Sales
- Telefonica, Deutsche Telekom May Say Earnings Rose on Wireless Purchases
- BMW, Audi Lure Europe’s Aging Drivers With Infrared Beams, Radio Signals
- BASF’s Hambrecht Seeks to Steady Earnings Growth With Two Acquisitions
- Solar Power, Mining, Oil Companies Have Fastest Share Gains So Far in 2006

** IN PLAY TODAY **

- Earings of note: Air Liquide, TNT, Pearson

- Degussa will conclude a deal to sell its construction chemicals
unit to BASF AG within 10 days, agreeing on a price of about 2.8 billion euros.

- Endesa SA told investors that further takeover bids to those already made by
Gas Natural SDG SA and E.ON AG are possible.

- Gaz de France SA and Suez SA said on Feb. 25 they plan to merge in a combination that
will create the world’s second-biggest power and gas supplier.The stock merger is taking place on a 1-for-1 basis.

- Air Liquide SA, the world’s largest maker of industrial gases, said that full-year profit rose 20
percent, helped by increasing demand for hydrogen. Net income climbed to 933 million euros, or
8.66 euros a share, from 780 million euros, or 7.23 euros a share, a year earlier Analysts surveyed by Bloomberg forecast earnings of 936 million euros.

- Vodafone Group Plc cut its growth forecast and said it plans to take a goodwill charge of as much as 28 billion pounds ($49 billion), mostly to reflect the lower value of its German unit. The company expects to report “an impairment of the group’s goodwill in the range of 23 billion pounds to 28 billion
pounds in respect of reductions in the aggregate goodwill for Vodafone Germany, Vodafone Italy and, potentially, Vodafone Japan”. Overall proportionate mobile revenue growth, on an organic
basis, will be in the range of 5 percent to 6.5 percent for the year ending March 2007, the company forecast today. The lower growth rate compared with the current financial year reflects “the increasingly intense competitive environment, continuing regulatory reductions in termination rates and the one-off beneficial impact in the year ending 31 March 2006 of the introduction of mobile to mobile termination rates in France”.

- TNT NV said fourth-quarter profit fell 48 percent after a 102 million-euro charge at the
unprofitable French unit that TNT finished selling this month. Net income dropped to 108 million euros, or 23.8 cents a share, from 209 million euros, or 44.1 cents, a year earlier. Revenue rose 3.2 percent to 2.78 billion euros from 2.69 billion euros. The company restated sales figures to remove discontinued operations. TNT said in January it would book a pretax charge of as much as 140 million
euros, mostly in 2005, because of divestments and a reorganization in France. Net income was less than the 164 million-euro median analyst estimate.

- Pearson Plc Monday posted full-year pretax profit of GBP466 million compared with GBP325 million the previous year. Sales were GBP4.10bn compared with GBP3.70bn. The company said: “We expect 2006 to be another good year for Pearson as we continue to increase margins and grow ahead of our markets. We expect to achieve strong underlying earnings growth, good cash generation and a further
significant improvement in return on invested capital.” The results came in above the median consensus.

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** HEADLINES **

- National Grid to Buy KeySpan for $7.3 Billion, Doubling Its U.S. Customers
- Wall Street’s Profit Engine From Bond Trading Shows Signs of Decelerating
- U.S. Treasury Investors Become Most Bullish Since 2003 After Bonds Slump
- Fed, Eyeing U.K., Australia, Finds Even Steady Home Prices May Hurt Growth
- U.S. Utility Stocks May Rebound as Law Change Boosts Takeovers, Investment
- BlackBerry, Facing Shutdown, May Add Camera, Music to Compete With Palm

- Asian Stocks Climb to Three-Week Highs; Mitsubishi UFJ, Posco Lead Advance
- KT&G Rejects $10 Billion Bid From Icahn, Lichtenstein After Board Meeting
- Indonesia’s Credit Rating May Be Raised by Moody’s on Budget Deficit Drop
- Nippon Sheet to Buy Pilkington for $3.1 Billion to Increase Overseas Sales
- Japan May Pay the Highest Interest Rate to Borrow for Two Years Since 2000
- China’s Crude Oil Imports in January Rose 69 Percent to 13.2 Million Tons
- Yuan Rally May Accelerate as Exporters Cope With Revaluation, Merrill Says

** IN PLAY TODAY **

The macro calendar is empty. After US market hours Newmont Mining will report Q4 earnings.

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** EUROPEAN MARKETS **
S&P future 0,08%; Bund future -0,07%; Crude future 61,22; €/$ 1,19235; Gold
552,39

** HEADLINES **

- Alwaleed Plans $6 Billion Kingdom Holding Initial Share Sale, Person Says
- Dubai’s DP World Agrees to Delay Its Takeover of Six U.S. Port Facilities
- Sanofi Plans to Introduce Acomplia as Diet Pill This Year After Setback
- InBev Profit Rises 26 Percent, Missing Estimates; Brewer May Cut 360 Jobs
- EU May Veto $1.6 Billion Deutsche Telekom Takeover of Austria’s Tele.ring
- WPP 2005 Profit Jumps 33 Percent as Grey Acquisition Helps Sales Increase
- Lloyds TSB Net Rises 4.2 Percent on Higher Income From Corporate Banking

** IN PLAY TODAY **

- Volkswagen AG is still in negotiation with Sixt AG and Cerberus Capital
Management LP about a purchase of Volkswagen’s Europcar car-rental division,
Frankfurter Allgemeine Zeitung said, citing unidentified bankers
close to the talks.

- InBev NV said 2005 profit increased 26 percent, less than
analysts estimated, on slow growth in Europe. The company may
cut 360 jobs in the first part of the year in the region. Net income increased
to 904 million euros, or 1.50 euros a share. A Bloomberg survey of five
analysts showed a median estimate of 997 million euros. Sales
gained 36 percent to 11.7 billion euros.

- WPP Group Plc said 2005 profit rose 33 percent as sales increased after its
acquisition of Grey Global Group Inc. Net income for the 12 months ended Dec. 31
rose to 364 million pounds, or 29.7 pence a share, from 273 million pounds, or
23.4 pence, a year earlier. Revenue increased 25 percent to 5.37 billion pounds.
Like-for-like revenue was up 5.5 percent. The net income for 2005 fell short
of analyst estimates of 406 million pounds, while revenue exceeded estimates of
5.27 billion pounds.

- Lloyds TSB Group Plc said 2005 profit rose 4.2 percent as a rise in
corporate-banking income outweighed a slowdown in consumer lending. Net income
was 2.49 billion pounds, or 44.2 pence a share, compared with 2.39 billion
pounds, or 42.5 pence a share, a year earlier. That beat the 2.43 billion-pound
median estimate.

- Sanofi-Aventis SA said it still plans to introduce the drug as a weight-loss
treatment this year. Sanofi also said net income last year rose to 6.34 billion
euros, or 4.74 cents a share, from 5.03 billion euros, or 3.77 cents, a year
earlier. That matched analysts’ estimates.

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