Talk of disposals sees SAirGroup surge 6.5%

Talk of disposals got firmly behind SAirGroup. Top management changes were seen as opening the way to a wholesale clearout of the group's jumble of airline stakes and the shares surged 6.5 per cent to €261.

SAirGroup's 49 per cent shareholding in troubled Belgian carrier Sabena might not be worth much but analysts were yesterday toting up the valuations of stakes in South African Airways, Portugal's Tap and a string of regional French airlines.

Disposals were seen as a prelude to reduced group gearing as well as a possible link with a global airline alliance. Brokers were predicting more news in March when SAirGroup publishes what are widely expected to be weak earnings.

Air France also made up ground on a dull day generally for airlines, adding 1.5 per cent at €24 following an upgrade from "hold" to "add" by Dresdner Kleinwort Wasserstein.

Dutch food group Numico topped the list of FTSE Eurotop 300 losers, on concerns the group would be hit by slower earnings growth in its core area of US nutritional supplements.

A trading statement from the company, the world's biggest vitamin and food supplement maker, after the bourse closed on Monday, failed to allay concerns about a slowdown in US food supplements, which now account for more than half of turnover.

Preliminary results for Numico, which posted a 72 per cent rise in 2000 preliminary net profit, mainly due to acquisitions, were largely in line with expectations. The shares dropped 10.5 per cent to €43.21, extending losses that have seen the price fall from an all-time high of €61.05 last November as the company has been hit by a series of scare stories.

ABN Amro cut its recommendation on the stock but Mr John Parker at Deutsche Bank held his buy rating, noting that 2000 sales at €4.2 billion were sharply higher than some forecasts of around €3.9 billion. "With much more data to come with the full results on March 6th, we see the stock beginning to recover," he said.

Results were an important driver of sentiment in the technology and telecoms sectors. Deutsche Telekom revealed a fourth quarter loss of €1 billion compared with an expected figure of about €400 million. Analysts at Deutsche Bank maintained the "buy" rating and year-end price target of €51, but said: "We believe concerns regarding flowback from the pending Powertel 7 and VoiceStream acquisitions could hold back the shares in the near term."

Deutsche Telekom was 3 per cent lower for most of the day but in late trading was almost unchanged at €36.70. Other telecoms fell for a second day, with France Telecom off 3.2 per cent, Vodafone down 2.4 per cent and KPN off 1.2 per cent.