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Bloomberg: European Energy Stocks, Shell May Advance; UBS, Roche May Fall

By Andreas Hippin

July 6 (Bloomberg) — European oil stocks may rise as Deutsche Bank AG raised its price estimates for companies including Royal Dutch Shell Plc, BP Plc and Total SA.

UBS AG fell in pre-market trading after the world’s biggest money manager ousted Chief Executive Officer Peter Wuffli. Roche Holding AG will probably drop after the U.S. Food and Drug Administration said babies are at increased risk of death if they are given the drugmaker’s Rocephin along with products containing calcium.

U.S. stocks declined yesterday, led by financial shares, after an increase in Treasury yields spurred concern bonds will become a more attractive investment than equities. Asian stocks dropped today for the first time in seven days today.

“An increase in Treasury yields is fueling speculation that investors may again switch over to bonds as an alternative to stocks,” said Oliver Stevens, deputy head of trading at IG Index in Melbourne.

U.S. 10-year Treasury yields held near a two-week high today before a government report that may show jobs growth is strong enough to keep the Federal Reserve from cutting interest rates.

Givaudan SA, the world’s biggest flavors and fragrances maker, and Lonza Group AG, the largest producer of drug ingredients, may decline after SWX Swiss Exchange said it would remove them from the country’s benchmark Swiss Market Index SMI.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the countries using the euro, slipped 5 to 4518 at 7:16 a.m. in London. The U.K.’s FTSE 100 Index may add 3 to 6638, according to CMC Markets, a betting firm.

Shell, BP

Shell, Europe’s biggest oil company, may advance after Deutsche Bank raised its estimate for shares 23 percent to 2375 pence. The analysts also raised their projection for BP, the region’s second-largest oil company, 16 percent to 670 pence and Total, the biggest refiner, 16 percent to 71 euros.

“After an uncertain start, 2007 looks set to be another very strong year for the oil sector,” London-based analysts including Lucas Herrmann wrote in a report published today. “With the price of crude oil moving back towards its 2006 high- $70 peaks and refining margins showing exceptional strength, earnings momentum has changed and sharply.”

Crude oil was little changed near a 10-month high in New York after rising yesterday on concern unrest in Nigeria may curb oil shipments and breakdowns at U.S. refineries may slow fuel production.

UBS dropped as much as 1.6 percent in pre-market trading at Clariden Leu in Zurich. Deputy CEO Marcel Rohner will replace Wuffli, effective immediately, UBS said in a statement late yesterday. Marcel Ospel, 57, agreed to stay on as chairman for at least another three years after the board rejected his proposal to have Wuffli succeed him.

UBS, Roche

UBS removed Wuffli after the company shut its Dillon Read Capital Management LLC unit in May at a cost of $300 million. UBS shares trailed those of Credit Suisse Group and Deutsche Bank AG in the past year as losses at the two-year-old hedge fund hurt profit, contrasting with record earnings at its rivals.

Roche may drop. The world’s biggest maker of cancer drugs sent doctors a letter on the danger of administering calcium within 48 hours of using Rocephin, an injectable antibiotic, after reports of deaths of both premature and full-term babies. The FDA posted the letter on its Web site yesterday.

Rocephin is prescribed to treat gonorrhea, bacterial septicemia, urinary tract infections, and acute ear infections, according to the letter. Ear infections are a common childhood illness.

A telephone call to Terence Hurley of Roche’s U.S. branch after business hours wasn’t immediately returned.

Givaudan, Comdirect

Givaudan and Lonza may slide as they will exit the SMI together with Ciba Specialty Chemicals AG, SGS SA and Swatch Group AG’s registered shares, the operator of the Zurich bourse said yesterday after the market closed. The measure’s revised composition will take effect on Sept. 24.

Comdirect Bank AG may be active. Germany’s biggest online broker said the number of executed trades rose 10 percent to 908,089 in June. The company is having a “positive” second quarter as it wins banking clients with new savings accounts and a marketing push, Chief Executive Officer Andre Carls said last month.

To contact the reporter on this story: Andreas Hippin in Frankfurt at [email protected] .

Last Updated: July 6, 2007 02:19 EDT

http://www.bloomberg.com/apps/news?pid=20601085&sid=aAlL98hsHuns&refer=europe

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