Sept. 7 (Bloomberg) -- Stocks rose for a third day as Kraft Foods Inc.’s $16.7 billion offer for Cadbury Plc spurred speculation mergers will increase and the Group of 20 nations pledged to bolster the economy. European bonds and the yen fell. The MSCI World Index of 23 developed countries advanced 0.9 percent at 11:29 a.m. in London. The yield on the German 10-year bund climbed from near the lowest level since May, while the yen weakened against 15 of the 16 most-traded currencies. “Financial markets are stabilizing and the global economy is improving, but we remain cautious about the outlook for growth and jobs,” the G-20 said after its weekend meeting in London. Companies from London-based Cadbury, the world’s largest confectioner, to Singapore’s state-controlled Chartered Semiconductor Manufacturing Ltd. were targeted for takeovers as the world recovers from its first recession since World War II. The G-20 “will err on the side of caution,” said Lucy MacDonald, chief investment officer of equities at RCM UK Ltd. in London. “Confidence in the corporate sector has risen off the floor,” she said in a Bloomberg Television interview. “We’d expect to see M&A picking up from relatively low levels.” The Dow Jones Stoxx 600 Index of European shares rose 1.4 percent as all 19 industry groups advanced. Cadbury surged 41 percent in London after rejecting Kraft’s bid of 10.2 billion pounds ($16.7 billion). The offer of 300 pence in cash and 0.2589 new Kraft share per Cadbury share values the confectioner at 745 pence a share, 31 percent above last week’s closing price. Cadbury said the bid “fundamentally undervalues” the company. T-Mobile for Sale Deutsche Telekom AG increased 1.9 percent in Frankfurt. Europe biggest telephone company is close to deciding whether to sell its U.K. unit or to fold it into a joint venture, a person involved in the discussions said. Vodafone Group Plc and Telefonica SA made informal offers to Deutsche Telekom to buy its T-Mobile UK unit for about 4 billion pounds, the Financial Times said today. Vodafone added 1.1 percent and Telefonica rose 2.1 percent. Telefonica spokesman Miguel Angel Garzon, T-Mobile International spokesman Michael Lange and Vodafone spokesman Simon Gordon declined to comment. Deutsche Telekom spokesman Stephan Broszio was not immediately available for comment. The MSCI Asia Pacific Index climbed 1.3 percent as Abu Dhabi agreed to buy Singapore’s state-controlled Chartered Semiconductor for S$2.5 billion ($1.8 billion). Labor Day Futures on the Standard & Poor’s 500 Index increased 0.4 percent, indicating the benchmark gauge for U.S. equities may advance for a third straight day when markets open tomorrow after today’s Labor Day holiday. The MSCI Emerging Markets Index gained 1.3 percent, led by a 4.5 percent jump in Lithuania’s OMX Vilnius index. The Shanghai Composite Index rose for a fifth day, adding 0.7 percent, after China’s government lifted the amount foreign funds can invest in equities. Government bonds fell after G-20 officials said it would be premature to start unwinding stimulus measures designed to buoy the global economy. G-20 countries have committed $12 trillion to help pull the world out of recession, according to the International Monetary Fund. The yield on the German 10-year bund rose 1 basis point to 3.25 percent. German factory orders rose for a fifth month in July, helping the recovery in Europe’s largest economy gain traction, according to data from the Economy Ministry in Berlin. The Japanese 10-year yield climbed 3 basis points to 1.34 percent. The U.S. Treasury plans to sell $70 billion of three-, 10- and 30-year securities this week. Yen, Australian Dollar The yen dropped 1.2 percent against the Canadian dollar and 0.8 percent compared with the New Zealand dollar. Australia’s dollar climbed as much as 0.7 percent versus the U.S. currency to its highest level in a year. Industrial metals gained on the London Metal Exchange as copper rallied for a third day and lead extended its advance to $2,380.25 a metric ton, the highest price since May 2008. Gold for immediate delivery in London was little changed at $993.60 an ounce, after posting its biggest weekly gain since April last week. Gold was last above $1,000 on Feb. 20. Crude oil for October delivery traded at $68.52 a barrel, up 0.7 percent, in electronic trading on the New York Mercantile Exchange, on speculation OPEC will leave supply curbs unchanged at the end of the peak driving season in the U.S. All 26 analysts in a survey by Bloomberg News predicted the Organization of Petroleum Exporting Countries will maintain its production target at 24.845 million barrels a day at a Sept. 9 meeting in Vienna.

Source