We reiterate our overweight position for pharmaceuticals (page 4 of 4)

Rebif continues its strong growth in Q1 posting an increase of 45.7% to USD 115.30. The main reason for the slight disappointment in the figures is mainly due to higher advertisement spending for Rebif and lower financial income. We believe the market is too focused on a quick boost in earnings by Rebif. There are costs involved in positioning the product for a long-term success and hence we remain of the opinion that today's investments will be tomorrow's earnings. We believe that the stock's 10.65% decline for the week is overdone.

Stora Enso's (STERV FH; EUR 14.35) earnings report was broadly in line with expectations. 1Q02 net income dropped 43% to EUR 161 million or EUR 0.18 per share. Pretax profit was EUR 241 million, 11% above the consensus, which can be explained by better than expected net financials. Operating profit of EUR 274 million was broadly in line with expectations. The company's outlook remained rather cautious, saying that a clearer uptrend was needed to have a positive impact on earnings. We believe that these cautious statements appear to be more backward looking rather than forward looking. We view the improvements in fine paper and consumer packaging as a confirmation that a demand recovery is on its way. Further Stora Enso reports of turning pulp prices and implementation of a 5% price increase for uncoated fine paper. These are clear signs of recovery, in our view. Stora Enso closed the week 2% lower.

Vodafone (VOD LN; GBP 1.0950) finally reported the long-awaited Key Performance Indicators (KPI). The company added 1.33 million new subscribers globally in the first quarter. This was slightly below the average expectations of around 1.40 million. The report confirmed the strong weakness in Germany where subscriber numbers fell by 399,000 due to prepaid churn. Italy and Spain managed to offset the German trend with strong subscriber numbers and ARPUs. Vodafone said that ARPU levels could be maintained in Q1 and is looking for an increase during the course of the year. While we see no trigger that could bring the stock significantly higher in the short term we believe that the stock is cheap and currently prices earnings growth of close to zero for the next years. We believe this is too negative and expect the stock to recover from current depressed levels later in the year. We leave the stock as a Hold on our recommendation list and review the stop-loss