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Daimler buying into its own future
Last Updated(Beijing Time):2008-06-18 09:35

Daimler plans to buy back as much as 10 percent of its shares in the car maker's latest effort to boost the stock after ending a nine-year entanglement with Chrysler.

Daimler rose the most in more than four months in Frankfurt trading after the Stuttgart-based company said it was to spend as much as 6 billion euros (US$9.3 billion) to buy as many as 96.4 million shares by April 8, 2009.

Under pressure to boost investor returns, Daimler had bought back shares valued at 6.2 billion euros between August and March. Daimler got approval for a further buyback in April, but didn't act until yesterday, contributing to a 31-percent drop in the stock this year. The German company's connection with Chrysler has continued to hurt earnings after the sale of most of Michigan-based auto maker.

"That is finally what the market was looking for," Georg Stuerzer, a Munich-based analyst with Unicredit, told Bloomberg News. "The move is a signal that the ongoing business is running well."

Daimler gained as much as 2.26 euros, or 5.2 percent, to 45.94 euros in Frankfurt, the sharpest advance since February 12. The stock was up 5 percent at 12:53pm, valuing the company at 44 billion euros.

"It's a clear signal that management is looking optimistically into the future," said Arndt Ellinghorst, of Credit Suisse in London. "This is further confirmation of their strategy to give cash back to investors."

The German car maker said on June 4 that earnings this year would rise as the sales of its cars and trucks increased.

Source:Shanghai Daily 
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