Newsquawk Daily European Equity Opening News

2nd August 2021

The Daily European Equity Opening News is uploaded at 0700BST/0200EDT recapping all of the overnight equity news.

From 0700BST/0200EDT all equity news will be covered in real-time over the audio and headline feed and the full audio rundown will be at 0715BST/0215EDT.

There will be an additional audio rundown at 0750BST/0250EDT recapping any company news which has hit the wires since 0715BST/0215EDT ahead of the European equity open

European equity coverage will only cover companies in the STOXX 600 or companies of systemic importance to particular sectors.

ASIA

Asia-Pac equities shrugged off the lacklustre performance on Wall Street on Friday, in which the majors posted mild losses ranging from 0.4-0.7%, whilst Amazon shares held onto post-earning declines to close lower by around 7.5%. Overnight, US equity futures kicked off the first trading day of August with mild gains, which then extended throughout the APAC session as US senators worked over the weekend to pave the way for a vote on the USD 1trln infrastructure bill this week - in turn guiding the ES and NQ back above 4,400 and 15,000 respectively. Back to APAC, the ASX 200 (+1.4%) gained traction and hit a record high ahead of tomorrow’s RBA announcement, which is expected to walk back on the July taper decision amid the worsening domestic COVID situation. The index was also supported by Afterpay surging over 30% at the open after NYSE-listed Square offered to acquire the Aussie payment company in a USD 29bln deal. The Nikkei 225 (+1.9%) was bolstered with gains seen in every sector, with materials and tech leading the charge. South Korea’s KOSPI (+0.4%) lagged as North Korean leader Kim Jung Un’s influential sister warned that the annual military drills between South Korea and the US this month will undermine prospects for better ties between the Koreas. Hang Seng (+1.1%) and Shanghai Comp (+1.5%) were initially subdued amid the ongoing US-Sino tensions and after sub-par PMI metrics. The bourses then rebounded despite a lack of news flow, with some pointing to continued loose policy as an analyst piece on China Daily (seen as the CCP's mouthpiece) suggested that Chinese leaders are expected to intensify policy support in H2 amid a deceleration in growth. There were also reports that the China Securities Regulatory Commission is ramping up talks with the US SEC to find a suitable resolution after the US SEC halted IPOs of Chinese firms. The Hang Seng was also supported by Evergrande shares as the indebted property developer offloaded its stake in its internet unit to raise funds.

EUROPEAN CLOSES

CLOSES: EURO STOXX 50 -0.57% at 4,093; FTSE 100 -0.52% at 7,042; DAX -0.54% at 15,556; CAC 40 -0.23% at 6,619; IBEX 35 -1.22% at 8,679; FTSE MIB -0.41% at 25,411; SMI +0.27% at 12,120.

SECTORS: Healthcare 0.49%, Consumer Stpl 0.06%, Telecoms -0.16%, Industrials -0.43%, Financials -0.75%, IT -0.75%, Materials -0.82%, Consumer Disc -0.85%, Utilities -1.40%, Energy -1.73%

FTSE 100

BHP (BHP LN) - Workers at BHP's Escondida mine overwhelmingly rejected (99.5%) the Co's final wage offer. Mining will continue during a period of obligatory government mediation. If no deal is reached in the 5–10-day period then strike action will begin. BHP has requested mediation in an attempt to reach a deal. (Newswires) Escondida is the world’s largest copper mine and accounts for almost 5% of global copper supply. BHP holds around a 58% stake in the mine.

Carnival (CCL LN) - On Royal Caribbean cruises, all guests 2+ will require a negative COVID-19 test before trips of five-days and over in the US. (Newswires)

Energy Names - Some energy names have warned MPs that a large number of bill payers will require extra assistance to pay their bills through the winter period. (Guardian)

GSK (GSK LN) - Co. receives authorization under health Canada's interim order for sotrovimab for injection to treat COVID-19 in high-risk adults and adolescents. (Newswires)

HSBC (HSBA LN) - Q2 adj. revenue USD 12.52bln vs exp. USD 12.57bln. Adj. Pretax USD 5.56bln vs exp. USD 4.73bln; proposes a H1 interim dividend of USD 0.07/shr. CET1 ratio 15.6% vs exp. 15.8%. NII USD 13.098bln vs prev. USD 14.509bln. Expected credit losses (ECL) charge for 2021 expected to be materially lower than the medium-term range, and possible a net release for the year. Q2 Net ECL release of USD 0.3bln as forward economic outlook continues to improve in major region. Cost reduction programme is on track. Co. sees mid-single digit lending growth for the FY. (Newswires/ HSBC IR)

ITV (ITV LN) - Discovery (DISCK) is in informal talks around a potential takeover of Channel 4. (Newswires)

Shell (RDSA LN) - Devon Energy, ConocoPhillips and Chevron (CVX) are reportedly among the potential companies interested in Shell's Permian Basin assets which could be worth as much as USD 10bln, according to sources. (Newswires)

UK Travel & Leisure- UK Chancellor Sunak has called on UK PM Johnson to ease travel restrictions, warning that the rules were damaging the economy and the tourism sector in particular; additionally, Ministers are reportedly looking into creating a new amber watchlist of areas at risk of moving onto the red list with little warning. (Times) This comes ahead of the August travel rules review on Thursday. The UK is said to be preparing to lift its travel ban on airport hubs to individuals and businesses from the Far East, Middle East, and Australia. (Telegraph)

OTHER UK COMPANIES

EN+ (ENPL LN) - Co. is reportedly evaluation the production of hydrogen art its power plants. (Newswires)

BROKER MOVES

RECKITT (RKT LN) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT BERNSTEIN

DAX

Allianz (ALV GY) - Co. has warned that the escalating legal dispute over actions its US investment funds undertook as the pandemic commenced mean that "there is a relevant risk that the matters relating to the Structured Alpha Funds could materially impact future financial results..."; however, due to the uncertainty, no provision has been recognised at this point in time. (Allianz)

Daimler (DAI GY) - Added to the conviction list at Goldman Sachs, lifting the price target to EUR 110 vs prev. EUR 107. (Newswires)

OTHER GERMAN COMPANIES

Deutsche Wohnen (DWNI GY)/Vonovia (VNA GY) - Vonovia is to submit a new offer for Deutsche Wohnen at EUR 53/shr, subject to BaFin approval. (Newswires) In July, the prior offer of EUR 52/shr narrowly missed out on the minimum acceptance threshold of 50%

Stabilus (STM GY) - Q3 revenue EUR 228mln vs exp. EUR 226mln, adj. EBIT EUR 31mln vs exp. EUR 31mln. Specified/narrowed the FY21 forecast range. (Newswires)

BROKER MOVES

CAC

AXA (CS FP) - H1 gross revenue EUR 53.8bln vs prev. EUR 52.4bln, EBIT EUR 3.64bln vs exp. EUR 3.22bln, net income EUR 4.00bln vs exp. EUR 1.17bln. Estimated impact of the recent European flooding is around EUR 0.4bln. (Newswires)

Carrefour (CA FP) - Co. implements share buyback for a maximum amount of EUR 200mln. (Newswires)

OTHER FRENCH COMPANIES

Euronext (ENX FP) - The CAC40 ESG index has been licensed to Amundi (AMUN FP) who will launch an ETF. (Newswires)

BROKER MOVES

RENAULT (RNO FP) REITERATED WITH OVERWEIGHT AT JPMORGAN

PAN EUROPE

EZ Banks - EU banks CET1 ratio fell to 10.2% from 15% in the EBA stress tests adverse scenario. The EU banking watchdog said the top 50 EU banks take a combined EUR 265bln capital hit in stress test scenario that prolonged fallout from COVID-19. (EBA) ECB said the stress test showed that the Euro Area banking system is resilient under a challenging macroeconomic scenario. The average final CET1 ratio for 89 supervised banks under three-year adverse scenario falls to 9.9% from 15.1%. (Newswires)

Heineken (HEIN NA) - H1 revenue EUR 9.97bln vs exp. EUR 9.91bln, operating profit EUR 1.6bln, +109%. Beer volume +9.6%, with strong growth in Heineken +19.6%. COVID-19 remains an area for caution as do rising commodity costs which will begin impacting in H2 and have a material effect in 2022, at current levels. Overall, we expect full year financial results to remain below 2019. Will apply its regular dividend policy for 2021 and pay an interim dividend of EUR 0.28.shr on August 11th. (Newswires)

BROKER MOVES

SMI

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

BROKER MOVES

US

Square (SQ) - Q2 2021 (USD): Diluted EPS 0.40 (exp. 0.30), Revenue 4.68bln (exp. 5.05bln). Square (SQ) is to acquire Afterpay (APT AT) in a USD 29bln deal; transaction expected to close in Q1 2022; Square has agreed to a secondary listing on the ASX. (Newswires)

CLOSES: SPX -0.48% at 4,397, NDX -0.59% at 14,959, DJIA -0.42% at 34,935, RUT -0.80% at 2,222.

SECTORS: CONSUMER DISCRETIONARY -2.77%, ENERGY -1.76%, UTILITIES -0.87%, FINANCIALS -0.73%, COMMUNICATION SERVICES -0.44%, INDUSTRIALS -0.17%, TECHNOLOGY -0.08%, HEALTH +0.08%, CONSUMER STAPLES +0.12%, REAL ESTATE +0.32%, MATERIALS +0.4%.

02 Aug 2021 - 06:50- EquitiesResearch Sheet- Source: Newsquawk