** EU WRAP **

** EUROPEAN MARKETS **
S&P future 0,02%; Bund future 0,21%; Crude future 72,43; €/$ 1,2737; Gold
711,19

** IN PLAY TODAY **

EDF reported a 22% increase in 1Q revenue to E17.6bln on higher gas and
electricity prices.

- Pernod Ricard expects FY 05/06 EPS to be at the high end of its E7.25-7.6
forecast range. 3Q sales rose 69% to E1.3bln thanks to the acquisition of
Allied Domecq.

- Axa reported 1Q sales rose 12.1% to E21.99bln. Company said: “Life & Savings
new business volume up 17% and new business value up 21%. Asset Management
revenues up 27% with net inflows of Euro 19 billion.”

- Vallourec will be added to the MSCI World Index at the close of trading on May
31.

- Deutsche Telekom posted a 9.7% rise in 1Q net income to E1.1bln (E1.01bln
expected) on revenue up 3.9% to E14.8bln (E14.99bln). The company’s CEO had
warned last week that fixed lines phone services were in “free fall” and would
not be offset by wireless services. The group reiterated its FY 2006 sales
target of E62.1-62.7bln with Ebitda of E20.2-20.7bln.

-Deutsche Lufthansa posted a narrower loss than same time last year. 1Q 2006
loss came in at E98m (-E87.5m expected) versus a loss of E116m in 2005. Revenue
for the quarter came in at E4.4bln (E4.23bln).

- Infineon Technologies’ IPO for its memory chip unit could raise up to E1bln
(FTD).

- Deutsche Boerse and Euronext have agreed on major issues regarding a possible
merger (Welt).

- IVG Immobilien reported 1Q net income E76.5m versus E0.7m same time last year,
on revenue up 33% to E127m. The group raised the lower end of its forecast and
announced it expects to earn at least E125m, up from range of E115m-E125m.

- Xstrata will be added to the MSCI World Index at the close of trading on May
31.

- Royal & SunAlliance expected to report a rise in 1Q net income, helped by
investments after pulling back in the US.

- Repsol may report a 6% drop in 1Q net income despite rising energy prices. The
stock closed at a 3-month relative low against the Ibex yesterday.

- Telefonica Moviles may report a 2.3% rise in 1Q net income. Telefonica’s TPI
net income rose 16% to E14.6m on revenue up 29% to E123.3m.

- ING Group reported a 3.3% rise in 1Q net income to E2bln (E1.72bln expected),
1Q life premium rose by 14.4% while banking income rose by 12%. The group
“remains confident” in its growth prospects.

- Autogrill reported a 12% increase in 1Q net income to E7.5m after the group
purchased a stake in airport retailer Aldeasa.

- Holcim posted a 42% jump in 1Q net income to CHF170m (CHF168 expected) on
sales up 70% to CHF4.63bln. The company reaffirmed its FY forecast.

** UPS & DOWNS **
+ ADECCO PRICE ESTIMATE RAISED TO SF90 FROM SF63 AT UBS
+ INFINEON TECHNOLOGIES RAISED TO `BUY’ FROM `NEUTRAL’ AT UBS
+ BSKYB RAISED TO `EQUAL-WEIGHT’ AT MORGAN STANLEY
+ VINCI PRICE ESTIMATE RAISED TO EU94 FROM EU89 AT LEHMAN
+ SOLVAY PRICE ESTIMATE RAISED TO EU106 FROM EU100 AT LEHMAN
+ GETRONICS RAISED TO `BUY’ FROM `ADD’ AT ABN AMRO
+ VEDIOR PRICE ESTIMATE RAISED TO EU20 FROM EU18.5 AT GILISSEN
+ ADECCO PRICE ESTIMATE RAISED TO SF92 VS SF80 AT CREDIT SUISSE
+ HEINEKEN REPLACES SACYR ON ING’S `FOCUS LIST’

- CONTINENTAL CUT TO `NEUTRAL’ VS `OUTPERFORM’ AT CREDIT SUISSE
- OMV PRICE ESTIMATE LOWERED TO EU52 FROM EU61 AT UBS
- STMICROELECTRONICS PRICE ESTIMATE CUT TO EU17 FROM EU19 AT UBS
- VEDIOR CUT TO `HOLD’ FROM `BUY’ AT GILISSEN
- CARREFOUR CUT TO `HOLD’ FROM `BUY’ AT ING
- RODAMCO EUROPE CUT TO `UNDERWEIGHT’ AT MORGAN STANLEY
- LAND SECURITIES CUT TO `UNDERWEIGHT’ AT MORGAN STANLEY