As if to prove that life is difficult even for the old economy these days, Swiss travel company Kuoni tumbled almost 30 per cent to SFr444 (#294) after a profit warning. Kuoni, which went through boardroom turmoil earlier this year, said its first-half and full-year profits would be significantly lower than last year and well below market expectations. It added that it might sell its loss-making Scandinavian operations.
Kuoni said demand in Scandinavia had proved weaker than expected because good weather had prompted Swedes to book fewer holidays abroad.
German rival Preussag, the world's biggest holiday travel group, fell more than 6 per cent to #34.50. Preussag also has exposure to Scandinavia and investors fear it might hit the same problems as Kuoni. However Preussag said: "Our business in Scandinavia is up by 7 per cent so we are doing well".
In technology, Germany's Epcos, the world's second biggest maker of electronics components issued a profit warning. It said third-quarter earnings would be as much as 44 per cent below analysts' forecasts after a slide in orders in the past month. Its shares fell 7 per cent on the news but later rallied to be down 1.7 per cent at #53.85 in late trade. Chipmaker Infineon, another spin-off from Siemens like Epcos, rose 4.5 per cent to #27.17 as investors grew more comfortable with its chances of a successful capital increase, which was priced at #25 a share.
The big Spanish banks rebounded after a dismal week amid worries about their exposure to Latin America. BBVA jumped 4.4 per cent to #14.15 as the chief executive said the bank would not act as a fair weather friend to Argentina. BSCH was 3.2 per cent higher as the group said it was not planning further purchases in Latin America in the immediate future. This contradicted a statement earlier in the day from Ecuador's central bank which said BSCH was interested in Banco de Pacifico, which is being privatised.
