Porsche's auto business takes back seat

Porsche AG's automaking business is taking a back seat to its holding in Volkswagen AG, which Chief Executive Officer Wendelin Wiedeking said on Tuesday he wants to raise "significantly" by exercising options.

The 31 percent stake in Volkswagen, Europe's largest car producer, accounted for three-fifths of Porsche's market value as of yesterday's close. Porsche, based in Stuttgart, Germany, and known for its 911 sports car, was valued at 22.4 billion euros.

Volkswagen, which announced plans on Tuesday to unveil a dozen new models by 2010, has soared 75 percent this year. Shares of the Wolfsburg, Germany-based company have risen more than any of the world's 25 most-valuable auto manufacturers. Porsche, whose preferred shares have gained 32 percent, ranks fourth.

Martin Winterkorn, Volkswagen's CEO, views Toyota Motor Corp as his company's main competitor. No wonder: Volkswagen surpassed Honda Motor Co and Nissan Motor Corp this year by market value and is behind only Toyota and DaimlerChrysler AG.

Tesco Plc, the United Kingdom's largest retailer, is lagging behind most of its European peers in the stock market this year.

Any reversal may hinge on what happens outside its home country.

While shares of the Cheshunt, England-based company have risen 7.2 percent, they rank 14th out of 20 supermarket owners in the region, according to data compiled by Bloomberg. Alfa-Beta Vassilo-poulos SA, a Greek chain controlled by Belgium's Delhaize Group, leads the pack with a 76 percent surge.

The stock has slumped as Tesco, whose shareholders include billionaire Warren Buffett's Berkshire Hathaway Inc, gets ready for its first US venture.

The company plans to open 30 Fresh & Easy Neighborhood Markets in the Southwest by year-end and has committed itself to spend $2 billion on the chain by 2012.

Tesco's shares may reach 734 pence by then as the company profits from expansion in Europe and Asia, according to Matthew Truman, a Lehman Brothers Holdings Inc analyst based in London.

He made the forecast, 69 percent higher than Tuesday's close, in raising his rating to "overweight" from "equal weight".

David Wilson is a Bloomberg News columnist. The opinions expressed are his own.

(China Daily 09/13/2007 page16)