EUROPEAN REPORT
		Postal Address: 60261 Frankfurt am Main Office Location: Platz der Einheit 1 Frankfurt am Main Telephone: (0 69) 2 99 66 - 0 Telefax: (0 69) 2 99 66-189

	As of October 25 2002	w/w Perf	YTD Perf
USD/EUR Rate	0.9773	0.6%	+10.6%
DJ Euro STOXX 50	2435.77	-3.6%	-36.0%
DJ Europe STOXX 50	2535.74	-2.7%	-31.6%

(* All stock and index prices on basis of 3pm Friday afternoon)
 

Just a pause on the way up or an end to the sharemarket recovery? European shares and European markets had a negative week’s performance. The DJ Euro Stoxx 50 and the DJ Europe Stoxx 50 lost 3.6% and 3.1% respectively. Best performing sector this week was Telecoms with a gain of 3.6%, followed by Utilities (w/w 0.6%) and Technology (w/w –0.1%). The worst performing sectors were Construction (w/w –8.3%), Chemicals (w/w –7.8%) and Energy (w/w –4.8%).


On Thursday France Telecom (w/w –8.73%) dropped after a French newspaper said debts were higher than previously thought. Orange (w/w 0.52%), its mobile phone subsidiary, dropped as well.

Proposed merger partners Telia (w/w 6.52%) of Sweden and Sonera (w/w 6.02%), the Finnish telecoms group, both reported third quarter results.
Telia reported a better-than-expected underlying earnings before interest, tax, depreciation and amortisation (ebitda) of SKr3.28bn while exceptional items and restructuring charges took the net loss to SKr10.12bn. Sonera said third-quarter ebitda rose to €199m from €183 a year ago.

Vodafone Group (w/w 5.29%) climbed on Thursday after it said that Vivendi Universal (w/w –18.17%) was barred under its shareholder agreement from doing an off-balance sheet deal to secure control of operator Cegetel. There were reports on Thursday that Vivendi was in discussions with its bankers about a loan which would allow it to foil Vodafone's bid for Cegetel.

In Stockholm, ABB (w/w –64.34%) bounced back on Wednesday after it said it would cut costs by $800m in the next 18 months and signalled it would sell its oil and gas business. The troubled Swedish-Swiss engineering group reported a third-quarter net loss of $183m versus a $23m profit last year.
ABB shares have lost about two thirds of their value since the company issued a profit warning late on Monday due to asbestos claims in the USA. The company did not give a detailed outlook but said its medium term targets were under review

Electrolux (w/w –11.78%), the Swedish household goods maker, dropped on Monday after it reported third-quarter operating profits of SKr1.7bn, a doubling of the weak figure from last year but below consensus estimates. "Market demand for the rest of the year is estimated to be flat or slightly down in both Europe and North America compared with the previous year," chief executive Hans Straberg said


DaimlerChrysler (w/w –4.23%), the German carmaker, gave back earlier gains on Wednesday even though it reported third-quarter earnings that beat expectations and raised its target for full-year profits. The carmaker said operating profits rose to €1.7bn euros from €700m