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European societies inspection and certification expect to benefit from tighter rules in sectors such as oil drilling or toys after a series of incidents and product recalls that have prompted authorities to show more stringent.

The spill in the Gulf of Mexico and the recent recalls of toxic toys and defective car had the effect of encouraging the authorities to create new rules, opening up lucrative opportunities for inspection companies.

This development could result in two or three percentage points of growth in turnover in testing, inspection and certification (ICT) sector by the end of 2010, said Laurent Brunelle, an analyst of Exane BNP Paribas.

The relatively high valuations of listed companies in the sector highlight investor optimism about their potential. The Swiss group SGS, the market leader, is trading at 17.7 times estimated earnings for 2011, the French Bureau Veritas at 15.8 times and 16.6 times Intertek English, is above average 12.2 of the European sector index.

The share price rose by SGS 17% since the beginning of the year and those of Intertek and Bureau Veritas have won over 30% while the sector index took 13%.And analysts believe this upward trend will continue.

In response to the disaster that struck the Gulf of Mexico, a new U.S. law may force oil companies to work with security firms will soon be on the agenda of Congress.

"Currently, there are some great players on the market for offshore oil drilling, such as Bureau Veritas, which holds about 10%," said Laurent Brunelle, noting that the French would be the winner if small rivals were not able to match the requirements of a market much more regulated.

A fragmented market

The market inspection and testing is in fact highly fragmented and composed a large part of small companies specialized in niches as diverse as testing raw materials, consumer products, agriculture, environment automobiles, all areas where government offices are also present.

The trend to increased regulation, globalization and therefore to the outsourcing of testing specialists to ensure the relay three market leaders, whose combined sales totaled about 7.8 billion euros 2009.

"Areas affected by oil spills from BP are the inspection and verification platforms so that companies that should benefit companies are active in the classification of ships.This is the case of Bureau Veritas, American Bureau of Shipping, Det Norske Veritas (DNV) and Germanischer Lloyd, "said Laurent Brunelle.

SMS is also well placed to benefit from U.S. laws more stringent because of its expertise in testing materials.

"SMS is strong in oil, gas and services to chemistry with almost one billion Swiss francs in sales (in 2009) and is very active in North America," says Jean-Philippe Bertschy, Vontobel analyst.

Bureau Veritas has recently strengthened its position in the testing of raw materials by buying the British Inspectorate for 450 million pounds while the SGS search acquisitions.

"SGS would like to enter the marine services," said Laurent Brunelle, adding that Bureau Veritas was best placed to buy the German Germanischer Lloyd if it became a target.

NEW SEGMENTS INVOLVED

In consumer products, the turnover of companies in the sector rose last year after the adoption of the U.S. Consumer Product Safety Improvement Act (CPSIA), in reaction to recalls of toys produced by Mattel in China that contained lead paint and tiny magnets that could be swallowed by children.

'The CPSIA could be extended to all consumer products ", said Chris Burger, an analyst at Helvea."But it's a very political issue and the government does not burden companies with new constraints. This could jeopardize the return to growth."

The new EU directive on toy safety, which comes into force in July 2011, will have a positive but less significant on the testing of major consumer product that CPSIA because it applies only to new toys.

Furthermore, new EU rules that require tires to be tagged for fuel efficiency, the wet grip and noise will be effective as of November 2012. They may require certification companies to strengthen their motor units.

Wall Street opened lower after the announcement of an unexpected rise in weekly unemployment registrations, which rekindled investor concerns about the state of the U.S. labor market on the eve of the release of employment figures of the month July.

The Dow Jones lost 0.54%, to 10,622.61 points, the S & P 500, 0.63%, to 1120.16 points, while the Nasdaq Composite yielded 0.57%, to 2290.54 points.

Entries weekly unemployment rose in the United States during the week to July 31, at 479 000 460 000 cons (revised from 457,000) the previous week and 455,000 expected by economists.

Investors are more anxious with respect to the U.S. labor market as unemployment remains high, which is a major obstacle to economic recovery, however, that the latest macroeconomic statistics were considered disappointing.

Viacom fell by 0.29%, after publishing a turnover less than anticipated due to a decline in sales of DVDs, despite a better than expected quarterly profit.

By contrast, News Corp. jumped 4.55%, the media group has been beneficial for its fourth fiscal quarter due to strong performance of its cable networks and advertising revenue growth of its newspapers.

Several groups have urged the French government this week to catch up on overdue payments estimated at two billion euros due to a failure of a computer system.

On Friday, the giant European aerospace and defense group EADS, which published its interim results, has come to be inscribed on a list of providers dissatisfied with the state which already Safran, Thales and Dassault Aviation.

According to several speakers, these delays are attributed to the introduction of payment system inter Chorus, which records problems since late 2009.

On 12 May, the French Ministry of Defence said he was determined to catch up on by the end of the summer.To date, some 3.8 billion euros of commitments had been paid since January 1, or 55% of the amount paid to manufacturers last year at the same time.

"For the defense sector as a whole, delays (current) is estimated at around two billion euros," said Friday a spokesman for the grouping of French aerospace industries (GIFAS).

A cell involving two other organizations have asked the government to act, "he added.

Dassault Aviation said on Thursday waiting for payments equivalent to 200 million euros.For Safran, the addition amounts to some 270 million.

"We are also concerned," said Friday Hans Peter Ring, chief financial officer of EADS, in conjunction with the presentation of interim financial statements of the company, without giving further details.

A spokesman of the Directorate General for Armaments (DGA) stressed that the system delay payments Chorus affected several departments.

According to the Ministry of Budget, the Chorus system was designed by the German specialist software and SAP software.

An SAP spokesman declined to comment Friday and said that this case should be reviewed by the French government.

The methods of making and release of stress testing banks continued Tuesday to divide the states of the European Union, which will continue discussions on this subject in the coming days.

Meeting in Brussels on the occasion of the monthly meeting of Ecofin, the finance ministers of the Twenty-Seven have reported an agreement in principle to have the greatest possible transparency in the publication of test results but no have not provided clarifications on the exact criteria that will be made public.

"Introducing stress test, which was held this morning and repeated by the Commission, Ministers, Central Bank, it really will give the greatest possible transparency," said the Belgian minister Finance Didier Reynders, on behalf of the six-month presidency of the European Union.

"This is the reason we have confirmed that States were ready to respond with action if necessary to consolidate the position of either institution," he added.

Nearly one week after publication by the Committee of European Banking Supervisors (CEBS) from the list of 91 banks that are under the stress tests and outline the options chosen, the exercise remains unclear.

According to several European sources, several countries have expressed reluctance to publish certain ratios obtained in these tests.

PUBLICATION IN TWO TIME

France, in a contribution to the work of the Economic and Financial Committee (EFC), the body which prepares the meetings of the Ecofin council, has asked these days in particular the question to reveal whether or not the exposure of banks to sovereign debt ., "said one of those sources.

She also stressed the difficulty of harmonizing one institution to another to calculate the ratio of Tier commitments of a bank compared to its equity "hard".

Finally, a ratio to take into account the exposure of banks to a potential liquidity shock is also one of reflection and discussion with other countries, "said this source.

Regarding publication, it will be done in two stages, Didier Reynders said: July 23, the consolidated results of the 91 banking groups will be published then, within two weeks, institutions with branches of other countries will detail the results unbound.

Asked how he decided whether a bank will succeed or not the tests, the Commissioner of Economic and Monetary Affairs, Olli Rehn, has said his side should be that banks are resistant to the criteria individually, but also in whole.

"All this will be covered by stress testing," he said.

These discussions around the criteria for publication are particularly difficult and sensitive because they can greatly alter the ranking between banks need recapitalization and healthy banks.

"Everyone looks at his door (…) And everyone has their own definition of transparency," said one diplomat.

TECHNICAL DISCUSSIONS

Didier Reynders said the CEf had been instructed to continue technical discussions to coordinate and organize the publication of results.

"There is no problem on the selection (criteria).It is simply a problem of coordination, ensuring at the same time to publish all the figures, "he said.

Monday, after a meeting of the Eurogroup, the French Minister of Economy Christine Lagarde, said that several criteria had been detailed by ministers.

"These include situations are very stressed in higher CDS (credit default swaps) and spreads," noted the minister, while noting also that the deliberations and discussions would continue until the eve of publication of results, scheduled for July 23.

"Our work will continue until July 22.There will also Teleconference (finance ministers) that day and the conversations will take place until the last moment, "she said.

Asked about possible bank recapitalization, the minister said several countries had "underfoot", including France, Spain or Germany, which plans to support the sector, introduced at the height of the crisis in late 2008 are still active or can be reactivated.

L'Oreal reported a slowdown in organic growth in the second quarter compared to the first, despite a very strong sales growth in emerging countries.

The global cosmetics giant has seen its sales climb 12.4% to EUR 4.945 million, slightly above the consensus of analysts polled by Reuters writing (Euros 4,897,000) which has benefited from the positive effects the decline of the euro.

Its organic growth has in turn emerged at 5.2% against 5.6% forecast by analysts, on average, marking a slowdown from 7.4% in the first quarter had benefited from more favorable basis for comparison (- 4.3% first quarter 2009 and -2.1% in the second).

Citing "important breakthrough" in the new markets, including China, Brazil, Russia, India and Indonesia, the group said in a statement to "tackle the second half with confidence."

While sales in Western Europe have increased modestly (+1.1% on a comparable basis), they increased by 4.2% in North America and, especially, have jumped from 11.1% in emerging countries, with increases of 11% in Asia and 18.4% in Latin America.

Sales of luxury products (Lancome, Armani, Helena Rubenstein and Yves Saint Laurent Beauty) have signed the largest increase (+7.6%) of the four major divisions.

These consumer products (L'Oreal Paris, Garnier) rose 4.1%, those of professional products for hairdressers took 4.7% and the products sold in drugstore rose 6.7% .

Against the trend, The Body Shop chain has seen sales stagnate (-0.1%).

The L'Oréal closed Monday down 0.86% to 82.09 euros on the Paris Stock Exchange for a market capitalization of 49.2 billion euros. The sign value up 5.2% since January, while the CAC down 9.37% over the period and the diverse European index of consumer goods ahead of 12.05%.

Unemployment rose again in France in May, according to Ministry of Economy and job center.

The number of jobseekers in category A, that is to say, without work and actively seeking employment rose 22,600 persons (+0.8%) last month, to 2,699,600, after an increase of 0.6% in April.

Compared to May 2009, the increase is 7.1%.

By adding job seekers engaged in a Pool (Class B and C), the number increases by 0.4% in a monthly basis in May (16,700 people) for an increase of 9.4% year on year another.

"In late May 2010, in France, 3,942,900 persons registered at employment center were required to make positive job search (including Dom 4,182,800), including 2699.600 were unemployed (class A) and 1,243,300 exerted a reduced activity, short or long (B and C) "indicate the department and job center in a joint statement.

In France, the number of jobseekers Class A increased 0.8% for men (+7.3% yoy) as for women (+6.8% YoY).

For categories A, B, C, the increase was 0.4% for men (+10.4% yoy) and 0.5% for women (+8.4% YoY).

Among youth under 25 years, the number of unemployed rose from 0.8% in group A compared to April, but continued to decline over one year (-1.1%).For categories A, B and C, the number increases by 0.3% over one month and 2.4% over one year.

For over 50 years, unemployment has increased by 1.3% in group A (+18.9% yoy) and 1.4% for the three main categories (+17.9% on year).

The number of long-term unemployed – registered at employment center for a year or more – rose 0.9% in May for categories A, B, C with a mass increase that is over one year (up 30.4% ).

Tickets for the public service employment in categories A, B and C increased by 1.3% from April and 3.9% over one year.

The outputs of the same categories at the same time have increased 5.3% on a monthly basis and 11.8% a year.

Job offers collected by the employment center fell 3.7% in May in France but are up 12.8% YoY.

The overhaul of management of public finances of states is needed to reduce threats to financial stability and the real economy, said Monday the governor of the Bank of France.

At a conference, Christian Noyer, a member of the Board of Governors of the European Central Bank, said that the measures taken by the ECB, in particular the purchase of sovereign debt, fulfill this dual goal, but they not sufficient alone.

Among the symptoms that the ECB decided to act, he cited the rise in risk premiums on certain sovereign debt, disruptions in the interbank market and the repo and the increasing difficulty of financing for some banks.

"This reflects a general state of uncertainty, if replies are not made, can have significant consequences for financial stability and the real economy as was the case in the latter part of 2008," Christian Noyer said.

Measurements of the ECB "fulfill their role," he said.

"It is clear however that these measures alone will not suffice," he said."Doubts about the sustainability (" sustainability ") of public finances in many countries are at the root of the current uncertainty."

"Thus, a condition that the market tensions subside is that fiscal discipline is implemented rigorously," he added.

The Acquisition Program sovereign debt by the ECB, "can not and will not be a substitute for effective and rapid fiscal consolidation," he said.

Christian Noyer said on the other hand that at no time during the crisis, inflation expectations had deviated significantly from the ECB's definition of price stability, which is near and slightly below 2%.

The first European car manufacturer Volkswagen announced Tuesday a capital increase with a volume of over 4 billion euros to partially fund the acquisition of Porsche, which has caused further heavy falls for action.

The group will offer its shareholders 65 million new preference shares without voting rights, for an amount that could reach more than 4 billion euros based on the share price on Tuesday.

The preference share of Volkswagen fell after the announcement.At 14:10 GMT, it lost 7.50% to 67.55 euros, a red lantern up Dax (+0.10%).

This capital increase was certainly expected, but the method disclosed Tuesday by the group are not transparent, "the markets want to know the details," said Heino Ruland, analyst at Research Ruland told Dow Jones Newswires.

The group has yet to set conditions Friday and the price of this capital increase.Pre placement of shares to begin Wednesday and the subscription period extended from March 31 to April 13.

Cash collected from investors in particular are intended to improve the financial structure of Volkswagen against a backdrop of creating an integrated automotive group with Porsche, "said the company Wolfsburg (North) in a statement.

Volkswagen holds 49.9% of Porsche AG, bringing together the activities of automotive manufacturer of cars that he fully intends to acquire by 2011. Porsche will then be added to its nine existing brands.VW had paid 3.9 billion euros for its share.

Shareholders of Volkswagen – the Porsche Holding SE (50% of voting rights), the German state of Lower Saxony (east) (20%) and the emirate of Qatar (17%) – have authorized 2009 to carry out capital increases for a total of up to 8.5 billion euros.

The emirate of Qatar has "reserved the right" to participate in the operation, he considers "an important step in the formation of an integrated group," he said in a separate statement.He also "confirmed its position as a long-term investor in Volkswagen.

But the group has comfortable liquidity (10.6 billion at end-December 2009), and its CFO had said in early March that he would stick to a single capital increase of 4 billion euros.

Cash collected could also finance other future projects "medium term" was "he said.

Volkswagen has already bought in late 2009, 19.9% of Japanese Suzuki and has expressed its intention to establish a large pole with his truck brand Scania and German MAN, which is the main shareholder.

The World Trade Organization (WTO) issued a final decision Tuesday in connection with a complaint against U.S. support provided by the EU for Airbus (EAD.PA: Quote), reported a journalist Reuters Tuesday.

The final confidential report, which will be released in several weeks or months, was handed over to representatives of U.S. trade missions in Geneva and Europe, said the journalist.

The general view, the WTO should give reason to Boeing, which should not necessarily end the transatlantic dispute between the EU and the United States. Grants are at the heart of the battle between the two aircraft manufacturers in the market of civil aviation, as estimated by the aerospace companies to 3.000 billion dollars (2.200 billion euros) over the next 20 years.The United States accuses Airbus of getting a total of 205 billion dollars of soft loans and other aid from the France, Germany, Spain and the United Kingdom over two decades.

The Tokyo Stock Exchange finished up 0.38% Wednesday, led by technology stocks, themselves brought up by the eve of their American counterparts.

After reaching a high of two months in session at 10,880.62 points, the Nikkei finally closed up 40.88 points to 10,815.03 points while the broader TOPIX, took 4 60 (0.49%) to 951.97 points.

Like other securities sector, Canon gained 1.71%.

Nintendo, meanwhile, jumped 8.51% after saying it planned to launch a new model of its video game console portable DS for playing games in three dimensions.

Some banking stocks have however suffered from the government's decision to revise down its planned privatization of Japan Post. Mizuho Financial Group and Sumitomo Mitsui Financial Group and have yielded respectively 1.04% and 0.71%.