Solid performance from the rest of the units.
Group revenues were slightly above our estimates, and this was mainly due to the outperformance of the Diagnostic unit. This area grew +27.2% YoY, based on the sales of reagents in Mexico and China; in organic terms, excluding the contribution of the new acquisition (€1.2m), growth would have been +21.3%. The Hospital unit rose +4.1% YoY, while Raw Materials & Others jumped +58.8% YoY, although this performance cannot be extrapolated to the rest of the year, as it is based on the specific needs and leftovers from the production process.

The company achieved growth in all the markets in which it is present.
Sales increased in all the markets, especially in Asia (+79.0%), United States (+27.5%) and Latam (+25.2%); revenues in Europe grew just +2.0%. This is in line with the company strategy of consolidating its presence in the US, the most attractive market in the world, while achieving a geographical diversification and facing the growing demand in plasma derivatives, especially in emerging markets, with the increase in production.

GRF was able to combine this top-line growth with a margin increase.
In spite of the appreciation of the USD, GRF was able to expand its EBITDA margin by more than 100 bps to 30.7%; EBITDA jumped +21.6% vs. 1Q09 to €72.3m. However, due to the balancing effect caused by the lengthy production process, the magnitude of this improvement could swing widely throughout the coming quarters. Net Income rose +33.8% vs. 1Q09 to €41.6m, while net debt came to €500.7m, around 2x EBITDA.

We maintain our Overweight rating.
These results confirm, once more, a clear outlook for the sector and in particular for GRF. The company has not just been able to achieve double digit top-line growth, but also to combine it with a margin improvement. It keeps presenting an attractive combination of growth prospects that are unmatched in current markets with a sector with a high defensive component and therefore, we keep our overweight recommendation for the stock.

We expect the government to announce a support agreement for credit insurers in the coming weeks. This is good news for Catalana Occidente (GCO). Credit insurers play a key role in the Spanish economy, and their capacity to cut contracts immediately when they see a risk increase can have a strong negative effect on the economy. Press reports and companies say the government is close to completing a deal to provide support for the sector’s activities.

What could the support measures consist of? All the information provided in the press suggests a reinsurance solution whereby the Insurance Compensation Consortium (ICC) would take the role of the second reinsurer. The preliminary conditions in the agreement indicate that the ICC could take a tranche of the claims ratio (net of reinsurance) of between 85%-130% and the credit insurer will have to face those claims below and above that range. If we add the cost ratio for GCO on credit insurance (29.2% in 2008, acquisition plus administration costs), we estimate that the company would be protected in a combined ratio range of 115%-160% for 2009. The credit insurers would give the ICC a percentage of their profits (a level of around 3% has been mentioned) for the next 3-5 years, which we think is cheap compared to the losses that could arise in 2009 due to insolvencies. The final details on the agreement have not been defined yet and the government may actually approve the deal soon at one of its regular weekly cabinet meetings.

In our view, the reinsurance programme should substantially reduce the probability of GCO being forced to allocate more capital to its credit insurance lines. Note that GCO currently has a very strong capital position, with a 320% solvency ratio after goodwill (€401mn in 2008). The insolvency data in January were poor, with insolvencies/total maturities at 7.1% vs 5.4% in December 2008. The good news is that the insolvency growth rate seems to be stabilizing from very high levels: +37.3% YoY in January vs +83% YE08). We think that the reinsurance support programme could provide a floor for 2009 credit losses for insurers that should be well received by the market, so we still recommend a Hold and a €13.00/share.

If we take a look at equities, then since October, in most cases we have seen a 20% rally in most of the indices worldwide. This is interesting as analysts tell us that the demand in bonds is due to capitulation of funds in equities over bonds. Certainly the rally in bonds looks like a bubble in the making but the balloon looks like it still has room to inflate as governments and treasuries agree that rates will remain low is essential. It is crucial for governments to install this belief, as they need to issue tons of bonds in coming months to build up an armoury for fiscal stimuli. If they don’t keep this view alive then returns of 1 or 2% will see a mass exodus and leave major governments without the funds they need. This is why the commitment to cut rates will remain strong, especially in the UK and the US.

As we see unemployment in Germany tick up for the first time since 2006, I foresee the ECB having to play catch up so expect rate cuts and possibly 75bp next week. This should see the EUR take the hit it deserves, as the ECB is way behind the curve here as inflation is NOT an issue anymore for now at least. A central bank cannot afford to wait until the data is in front of them before acting as even Trichet admits that monetary policy takes about 6 months to take hold. They are playing with fire here and basically ‘fiddling whilst Rome burns’* and we all know what happened to that empire. On the other hand, anything less than a 75bp cut next week will be met with derision, a lack of confidence and a lower EUR, so I believe the week ahead is going to be hard for the EUR no matter what. The fall to the 1.35 area on Friday suggest many agree.

Based on the interest rates convergence and Japan’s creditor nation status, the Yen is still my favourite currency, and whilst the authorities are concerned about a stronger Yen, I feel they will only be able to slow this move. I see further interest for central banks to use the JPY as part of their diversification process and although this will take some time to enact, I see investors jumping ahead and piling into JPY as the carry trade is a thing of the past and any risk appetite will not manifest itself in buying JPY crosses this year. Hence, I still bet for the EURJPY breaking all the lows towards the level of 100. I have also shorted the GBPJPY pair at the level of 140 and will do the same with the USDJPY if it rallies up to the 95.00 level.

With all that said the major concerns on the health of the economy remain, and we must not take our eye off China and Global recession issues. Add to this the big fall I expect in corporate earnings and failures, and my view is that this rally in equities could be close to an end. I still believe that this is an excellent opportunity to buy into equities, and that is what I maintained when discussing with friends and family this Christmas. However, the fact that equities are cheap today, doesn’t mean that they can’t get cheaper in a few months, so trying to play the market timing game, there are 3 main indicators I will be looking following. Two of them are the ones common to all economic cycles: interest rates ceasing to go down and a stop in the sharp increase in unemployment. The third one is directly related to the origin of this crisis, and it’s the fact that we are yet to see any signs of recovery in the US housing market.

* “Fiddling whilst Rome burns” is a phrase which means to occupy oneself with unimportant matters and neglect priorities during a crisis.

By modern-day standards Nero certainly appears a bizarre character, but that doesn’t make this story true. Roman scholars differ over interpretations of events surrounding the fire. The rivalries and conflicting accounts, even those in contemporary reports, make the ‘fiddling’ story uncertain.

While this is a very basic topic, it’s crucial to understanding how to make money trading stocks. Since 90% of traders are known losers, it’s obvious that elementary lessons like this are essential nonetheless.

When you enter an order to trade a stock, your broker gives you the option of either buying, selling, selling short or buying to cover using a market order, meaning an order that will be executed at the current market price, or a limit order, which is an order that will be executed only at a price at or better than the price you specify.

In a decade of incredibly active trading, I’ve never used a market order - not even once - preferring instead to use limit orders. Because I’ve never wanted to buy or short sell a stock badly enough to be willing to throw my money into the ring without carefully considering the price I’d pay for that stock.

Don’t get me wrong, I’ve made plenty of bone-headed trades on stocks I had no business trading in the first place. But even then, I never questioned using limit orders.

It comes down to trade management

Forget about wild price swings of several dollars per share, often times the difference between success and failure on a trade comes down to execution - meaning how close your actual entry and exit points are to your expected price points.

Since it costs the same to use a market or limit order (forget about adding or removing liquidity from a market, that’s a topic for another time), why even risk your execution getting away from those price points when you use a market order? After all, that is what you’re risking when you choose a market order over a limit order and the only people I know who follow that dangerous route are those whose trading is influenced by their emotions.

If a trade is based on hype or greed, you want to get in or out of a stock immediately- no ifs, ands, or buts. No matter how perfect a chart setup, a company’s fundamentals, or breaking news is that you must be wary of getting bad fills at all cost. Traders must learn to ignore these emotions and focus on getting the best prices possible in order to give yourself the best chances at profiting.

Now I know what many of you are thinking - you never worry about this because you’re trading the world’s most actively traded companies, stocks like Intel (INTC | Quote | Chart | Chart | News | PowerRating) and Citigroup (C | Quote | Chart | Chart | News | PowerRating), where the spread (the difference in price between the bid and ask) seems permanently fixed at only a penny or two per share. Well, as improbable as it may seem, sometimes important company, industry or market news is released the very second you place your order, greatly influencing a stock price in either direction, and if you use a market order you may find yourself with a very poor execution.

And while the chances of that happening are slim, it’s even more common for brokers and market makers to take advantage of your desperation for a trade execution and fill your order at a slightly worse price; costing you anywhere from hundreds to thousands or even tens of thousands of dollars depending on the size of your order.

For me, when I buy or sell short a stock, it isn’t about what I think the company is truly worth - my opinion is meaningless. What matters is what others think and what price they’re willing to pay based on that thinking.

By using limit orders, I ensure a satisfactory execution. And, if none or only some of my order executes - as often times stocks run too hard and too fast, blowing past my limit price - then it’s probably for the best because experience has taught me not to chase stocks. Obviously buying to cover into a short squeeze is an altogether different animal - on those you need to get out as soon as possible - so I just place my limit far above the current price, still cautious not to wildly overpay or open myself up to getting taken advantage of by many of Wall Street’s nefarious players.

And, of course many people don’t trade the most active stocks. Instead they look for an “edge” or better odds in less popular names. Maybe they focus on stocks like True Religion Apparel (TRLG | Quote | Chart | Chart | News | PowerRating) or Third Wave Technologies Inc. (TWTI | Quote | Chart | Chart | News | PowerRating), since both are currently breaking out to new 52-week highs, and in these cases it’s even more important to use limit orders because the price spread can range anywhere from $0.03 to $0.40 per share.

No matter how small or large your order is, the difference between a good and poor execution is no longer just an afterthought: now we’re talking 1, 2 and 3% price swings.

Perhaps most importantly are the two key advantages to using limit orders, good-till-canceled (GTC) orders, and using the greed/impatience of others to receive better fill prices.

GTC orders

Since you’ve designated a certain price for your order, you have this option to keep your order open for 30-90 days, depending on the brokerage firm. In essence, you’re letting the price come to you so you’re not forced to limit your timeframe to just one trading day, as those who place market orders do.

And even better, since many specialists, market makers and other traders have the mindset of raking in steady profits and commissions, if you display some added patience and place your limit order aggressively, meaning your order price is not close to the current market price, the chances of it executing are slim. But you might just catch one or more of these market players asleep or in a bind.

Stop losses can get taken out and push the price to your limit, or other traders may wind up needing to use their capital elsewhere, or they may just want the commission from the trade execution. Either way, you get executed at your aggressively priced limit. And that execution price is truly ideal because you weren’t rushed as so many others in this industry are. Achieving ideal entry and exit points dramatically increases your odds of trading successfully.

So, demand more from yourself whenever you place a trade. Be disciplined, be cautious, and be wary. Thinking this way will surely cost you a few missed opportunities, but the money saved over time from minimizing poor executions and emotionally charged trades will make it well worth your while.

The market, which was created four years ago, has been mainly used by olive growers to protect themselves against price swings. Olive oil prices are exceptionally volatile, so both growers and producers have an incentive to use futures in order to hedge against price fluctuations. However, MFAO wants to go further, and it is now planning to attract speculative investment by major financial institutions.

MFAO already counts with two important members trading from their screens: Banco Popular and savings bank La Caixa. Besides, they are in talks with “giants” such as Banco Santander, BBVA and JPMorgan, as well as the London desks of commodities traders.

But whether the big financial players are ready to start trading olive oil futures is still uncertain. Financial institutions demand liquidity, so volume needs to increase dramatically if the market wants to avoid the way of the Spanish citrus fruits futures market, which was abandoned not long after being set up back in 1995.

Spain is the world’s biggest olive oil producer, accounting for 40% of the 2.5 million tonnes produced worldwide every year. Yet, there is little MFAO will be able to do if strong competitors, such as Chicago’s Board of Trade, decide to emulate their initiative before it manages to establish their market.

Link: http://www.mfao.es (the site has an English version).

Former Chairman Luis Portillo transferred 149.7 million shares, which account for 9.2 percent of the company, to Banco Popular, according to a regulatory filing released today. He also gave up 88.8 million shares (5.4 percent of the total) to La Caixa, 54.8 million shares to Caja de Ahorros de Galicia, 45.3 million to Bancaja and 7.5 million shares to Bankinter.

Colonial was suspended from trading in Madrid today, something which has already occurred eight times in 2008. The company has lost 75% of its market value in just six months as sales swindled and banks called in loans to Portillo, who left the company in December. Colonial owes 8 billion euros ($12 billion) to banks including Goldman Sachs, Royal Bank of Scotland and Credit Agricole.

The stock last traded at 88 cents, giving Barcelona-based Colonial a market value of 1.4 billion euros. The drop in the company’s value attracted takeover interest from Investment Corp. of Dubai and General Electric Co., but in the end there was no agreement between them on the value of the company.

At present time, Spanish house prices are falling in real terms, something that have not been experienced for more than a decade. The average price of houses and apartments rose 4 percent in the first quarter from a year earlier, less than March’s 4.6 percent rate for consumer price inflation, according to a Housing Ministry’s statement released on April 18.

Repsol rose as much as 3.25 euros, or 14 percent, to 26.75euros, the biggest increase since the company sold shares to the public in January 1990. It closed the day at 25.68 euros, a 9.277% increase that erases all Repsol’s stock losses for 2008.

Petrobras, the Brazilian oil giant who owns 45% of the project, said yesterday that more investments are required to drill new wells, and conclusive data on the discovery’s potential will only be known after the other phases involved in the assessment process have been completed. Petrobras shares soared more than 8% in yesterday’s New York trading.

The remaining 30 percent of the project, is hold by BG Group Plc, the U.K.’s third-largest natural-gas producer, BG shares gained as much as 103 pence, or 8.4 percent, to record 1,325 pence in London trading. It closed 5.810 up to 1293 pence.

The shares added as much as 3.85 euros to 36.49 euros, their biggest one-day percentage increase in 5 years. The stock was up 7.23 percent at 35.00 euros at closing (5:35 p.m. local time).

Further increases can be expected if more cases are detected in the future, as scared people shift away from meat consumption to its most obvious substitute. However, it is important to bear in mind that even though previous similar news have also had a positive impact on the price of the stock, as it ocurred with bird-flu occurrances, they have never actually had a significant impact on the comnpany’s earnings results.

Here is the full list of the Top 10 Stock Exchanges by market capitalization:
(Figures in trillions of U.S. dollars)

1. NYSE - $21.79
2. Nasdaq Stock Market - $11.81
3. London Stock Exchange - $7.57
4. Tokyo Stock Exchange - $5.82
5. Euronext - $3.85
6. Deutsche Boerse (Germany) - $2.74
7. BME Spanish Exchanges - $1.93
8. Borsa Italiana - $1.59
9. Swiss Exchange - $1.40
10. Korea Stock Exchange $1.34

Source: Reuters and World Federation of Exchanges Web site

It is interesting to note that exchanges in emerging countries such as China, Russia or Brazil are still not on the Top 10. However, recent stock exchange mergers and the growth of these and other stock markets will result in a significant variation on this Top 10 in a few years.

The main Spanish stock exchange (known as Bolsa de Madrid) was officially founded in 1831. It now consists of 41 major financial institutions and 12 established securities dealers, and about 1500 domestic and foreign companies had their equity securities listed on it.

Trading hours are from 9 to 17:30 GMT+01:00.