Frankfurt

German shares close higher, led by DaimlerChrysler on M&A reports
The DAX was up 30.01 points or 0.43 pct at 6,987.08 after trading between 6,965.91 and 6,996.01. The MDAX added 86.54 points or 0.85 pct to 10,215.92, while the TecDAX gained 10.88 points or 1.28 pct to 858.18. Dax futures were up 14.50 points at 7,004.50. DaimlerChrysler, up 1.96 eur or 3.62 pct 56.08, was the top performer as speculation mounted that it would choose an outright sale of its underperforming Chrysler unit over an alliance or restructuring, dealers said. Handelsblatt newspaper said DaimlerChrysler will take a definitive decision on the underperforming unit's future before year-end and that its management board is leaning towards favouring an outright sale. Volkswagen was up 0.31 or 0.35 pct at 87.94 while Bayerische Motoren Werke added 0.33 or 0.72 pct to 46.38. Frankfurter Allgemeine Sonntagszeitung said yesterday VW is considering setting up its heavy truck operation's headquarters in the Netherlands should it succeed in a three-way merger with Scania AB and MAN AG. The move could break some of the resistance on the part of Scania and its larger shareholders against a three-way tie-up, the newspaper said. Deutsche Boerse, up 3.65 eur or 2.28 pct at 163.60, gained ahead of its publication of full year results on Thursday. Tourism and airlines stocks were mixed, with Lufthansa closing down 0.09 or 0.40 pct at 22.21 after it unexpectedly announced full year 2006 operating profit rising to 845 mln eur from 577 mln and net profit up 77 pct at around 800 mln. It proposed to pay a dividend of 0.70 eur per share from 0.50 eur per share. TUI improved 0.25 or 1.34 pct to 18.89 on persistent rumours that chief executive Michael Frenzel may be forced to resign. Siemens, up 0.71 or 0.84 pct at 84.97, said it has signed an agreement to acquire a majority stake in Czech-based electrical distribution technology company OEZ for an undisclosed amount. Deutsche Post was down 0.23 or 0.94 pct at 24.27. The postal carrier said over the weekend it wants to build up its capacity in Dubai to ensure its position as market leader in the Middle East. On the MDAX, K+S was the top performer, adding 3.02 or 3.44 pct at 90.88. EADS was 0.74 higher, or 2.95 pct, at 25.79 as rumours surfaced that the state-run investment agency of Qatar might be interested in buying up to a 10 pct stake in the aeronautics giant. EADS' unit Airbus had announced too that work on the major restructuring plan, 'power8', for its troubled aircraft maker, Airbus, will be suspended as agreement between the French and German sides could not be found. Puma dropped 9.47 eur or 3.27 pct to 280.52 after it released sub-consensus fourth-quarter figures that showed EBIT dropped to 41.6 mln eur from 55 mln in the same period a year ago, as marketing costs and investment in its brands weighed on profits. On the TecDAX, Solon gained 5.37 or 16.14 to 38.64 after it disclosed full year results that exceeded market forecast. Software AG lost 1.38 eur or 2.43 pct to 55.38.