Newsquawk Daily European Equity Opening News - 15th July 2024

15th July 2024

ASIA

APAC stocks traded mixed as participants reflected on the Trump assassination attempt over the weekend and a slew of Chinese data including disappointing GDP, Retail Sales and House Prices, while Japanese markets remained closed for Marine Day. ASX 200 rose above the 8,000 level for the first time with tech and telecoms leading the gains across sectors. Hang Seng and Shanghai Comp. were mixed with the former dragged lower by losses in tech, property and consumer stocks amid mostly weak Chinese data, while the mainland just about remained afloat despite the disappointing releases in which GDP and Retail Sales missed forecasts, while House Prices further deteriorated but Industrial Production topped estimates. Furthermore, the PBoC maintained its 1-year MLF Rate and injected funds through 7-day reverse repos, while top Chinese Communist Party officials kicked off the third plenum.

EUROPEAN CLOSES

CLOSES: DAX: +1.27% at 18,769, FTSE 100: +0.36% at 8,253, CAC 40: +1.27% at 7,724, Euro Stoxx 50: +1.38% at 5,045, IBEX 35: +0.72% at 11,251, FTSE MIB: +0.76% at 34,581, SMI: +0.95% at 12,372, PSI: +0.14% at 6,812.

SECTORS: Consumer Disc 1.60%, IT 1.43%, Industrials 1.25%, Healthcare 0.89%, Materials 0.86%, Consumer Stpl 0.73%, Energy 0.60%, Financials 0.54%, Telecoms 0.39%, Utilities -0.08%

FTSE 100

Centrica (CNA LN) - Co. is reportedly in discussions to recruit a new Chairman to replace incumbent Wheway who will no longer be eligible after May 2025, via Sky News; the article adds that Co. is considering external and internal candidates. (Sky News)

Glencore (GLEN LN) - Bunge (BG) and Glencore-backed Viterra offered to divest assets in two European countries to address EU antitrust concerns about the USD 34bln deal, according to Reuters citing sources. (Newswires)

Lloyds (LLOY LN) - Co. is making adjustments to its travel policy for staff as part of expense reduction measures, via FT citing a memo from the CEO. (FT)

Rio Tinto (RIO LN) - Co. and Ngarluma Aboriginal Corporation agreed to pursue the development of an 80MW solar farm in Ngarluma Country. (Newswires)

Tesco (TSCO LN) - CEO Murphy has signalled that the Co. is targeting an extra GBP 1bln in sales for its ‘Finest’ range; regarding Sainsbury’s (SBRY LN) said they believe their “intrinsic food qualities are every bit as good” while for Marks & Spencer (MKS LN) acknowledged that they “probably still have a bit of work to do”. (FT)

UK House Prices - UK Rightmove House Price Index YY (Jul) 0.4% (Prev. 0.6%). UK Rightmove House Price Index MM (Jul) -0.4% (Prev. 0.0%). "A first Base Rate cut for over four years, together with the new political certainty, could set the scene for a positive autumn market, with improved affordability and a more confident outlook in the second half of the year," Rightmove said. (Newswires/Rightmove)

OTHER UK COMPANIES

IG Group (IGG LN)/CMC Markets (CMCX LN) - Oanda Global Corporation, a rival to IG & CMC, has reportedly been put up for sale by majority owner CVC Capital, via Sky News; valuation is unclear. (Sky News)

International Distribution Services (IDS LN) - Czech billionaire Kretinsky is said to be mulling a shakeup of the Co. with a GPB 800mln Royal Mail investment to dominate Amazon (AMZN) in the UK parcel delivery market. Kretinsky's EP Group is looking to set up some 20,000 Amazon-style parcel lockers and cut delivery prices in a bid to win back customers. (CityAM/Telegraph)

BROKER MOVES

BP (BP/ LN) downgraded to Equal Weight from Overweight at Morgan Stanley

Glencore (GLEN LN) upgraded to Overweight from Equal Weight at Barclays

DAX

Deutsche Bank (DBK GY) – Confirmed the successful completion of its EUR 675mln share buyback programme, announced on Mar 1, 2024. (Newswires)

DHL (DHL GY) – Teamsters union demand DHL to recognise Cincinnati International Airport sort workers’ right to collective bargaining. (Newswires)

OTHER GERMAN COMPANIES

Baywa (BYM GY) - Baywa commissions restructuring opinion. Shares called to open -23%.

Fresenius Medical Care (FME GY) – US Federal Trade Commission is investigating dialysis providers Davita (DVA) and Fresenius Medical Care. (Newswires) Shares called to open -3%.

MorphoSys (MOR GY) – Co. announced voluntary delisting from the Nasdaq Global Market; expects last trading data on Aug 2, 2024. (Newswires)

Nordex (NDX1 GY) – Announced robust order intake of 3.4GW in H1’24, +27% Y/Y. Stable pricing continued with ASP of EUR 0.89 /mw IN h1’24. (Newswires)

BROKER MOVES

CAC

Airbus (AIR FP)/Thales (HO FP) - Airbus and Thales are said to be "seriously" mulling a merger deal for their space activities, according to reports via French press La Tribune. "At this stage, all the players remain extremely cautious about the success of these discussions in light of the failures of the various projects to merge the space activities of these two groups, which have marked the last fifteen years", "The two groups have launched low-key discussions that are exploratory in nature", according to several sources. (La Tribune)

OTHER FRENCH COMPANIES

BROKER MOVES

PAN EUROPE

China-exposed stocks - Chinese GDP YY (Q2) 4.7% vs. Exp. 5.1% (Prev. 5.3%; 2024 target of "around 5%"), 0.7% vs. Exp. 1.1% (Prev. 1.6%). Chinese Retail Sales YY (Jun) 2.0% vs. Exp. 3.3% (Prev. 3.7%). Chinese Industrial Output YY (Jun) 5.3% vs. Exp. 5.0% (Prev. 5.6%). China’s Stats Bureau spokesperson said 5% GDP growth in H1 was 'hard-won', and added Q2 economic growth was affected by short-term factors such as extreme weather and flooding. China's stats bureau said China's economy operations were generally steady in H1 but the external environment is complex and external demand is still not sufficient, while the economy recovery foundation still needs to be consolidated. (Newswires)

European Luxury Sector - Swiss-listed Swatch (UHR SW) missed operating profit forecasts and saw a sharp decline in net sales and operating margins. Swatch warned luxury goods demand in China, Hong Kong, and Macau saw a sharp drop. Swatch also expects the Chinese market (including Hong Kong SAR and Macau SAR) to remain challenging for the entire luxury goods industry until the end of the year. Separately, Chinese GDP (Q2) and Retail Sales (Jun) missed forecasts.

Grifols (GRF SM) – In relation to a possible transaction with Brookfield, Co. is to set up a committee of Board of Directors. Co. is to delegate committee work for the engagement of financial advisors in the context of transactions. Co. is to grant Brookfield access to evaluate certain information of the Co. as part of work aimed at the potential submission of a takeover bid for Co. shares. (Newswires)

Ibedrola (IBE SM) – Q2 total electricity production -24% Y/Y at 30,016 GWH. (Newswires)

Repsol (REP SM) – Ended its buyback programme; reaches max number of shares of 35mln shares. (Newswires)

TomTom (TOM2 NA) – Q2 (EUR): Revenue 152mln (exp. 152mln), FCF 4.7mln (exp. 4mln), EBIT loss 5.2mln (exp. 4mln). Co. said it is "not yet able to realise our financial ambition by 2025". Co. will provide guidance for 2025 with the publication of our FY25 results, and now expect both Group and Location Tech Revenue for 2024 to come in at the lower end of the guided range and consequently are adj. FCF guidance downward. (Newswires)

BROKER MOVES

SMI

Swatch (UHR SW) - H1 2024 (CHF): Operating Profit 204mln (exp. 500.2mln). Net Sales 3.445bln (-14.3% Y/Y). Operating Margin 5.9% (prev. 17.1%); "Decline in sales triggered by the sharp drop in demand for luxury goods in China", Hong Kong, and Macau. Sales outside of China (including Hong Kong SAR and Macau SAR) in local currencies at the level of the record year 2023. Total sales were 5.6% above the first half of 2022, at constant exchange rates. Only the Swatch brand bucked the negative trend and even increased its sales in China by 10%. The Group expects the Chinese market (including Hong Kong SAR and Macau SAR) to remain challenging for the entire luxury goods industry until the end of the year. Further strong growth is expected in Japan and the USA in the second half of 2024, accelerated by investments in the Group's retail network. The Group expects the situation to improve strongly in the second half of the year. (Swatch IR)

OTHER SWISS COMPANIES

SGS (SGSN SW) – Crop Science operations to stay with SGS. In Dec 2023, SGS and Eurofins Scientific (ERF FP) signed an agreement to divest its Crop Science operations, though not all closing conditions were satisfied. (Newswires)

BROKER MOVES

SCANDINAVIA

Mowi (MOWI NO) – Q2 (EUR): EBIT 230mln (exp. 271.4mln). (Newswires)

Novo Nordisk (NOVOB DC) – Co. will meet with Democratic US Senate aides following its decision to stop selling Levemir insulin in the US, according to Reuters citing sources. (Reuters)

Nordea Bank (NDA FH) – Q2 (EUR): NII 1.90bln (exp. 1.65bln), CET1 Ratio +17.5%, 4.4 percentage points above current regulatory requirements. HY: RoE 17.9%, EPS 0.37. Outlook for 2024 unchanged. (Newswires)

Orkla (ORK NO) – Q2 (NOK): Adj. EBIT 2bln (exp. 1.77bln), Adj. EPS 1.66 (exp. 1.46). (Newswires)

BROKER MOVES

US

CLOSES: SPX +0.55% at 5,615 NDX +0.59% at 20,331, DJI +0.62% at 40,001, RUT +1.09% at 2,148.

SECTORS: Communication Services -0.75%, Energy +0.22%, Financials +0.22%, Consumer Staples +0.42%, Industrials +0.53%, Health +0.59%, Real Estate +0.69%, Utilities +0.73%, Technology +0.92%, Materials +0.93%, Consumer Discretionary +0.96%.

Alphabet (GOOG) - Co. is reportedly in talks to acquire Wiz, a cyber security start-up, for around USD 23bln, via FT citing sources. (FT)

Citigroup (C) - On Friday said over the medium term the bank expects net interest income growth; and remains confident that the bank will meet the medium-term ROTCE target. (Newswires)

15 Jul 2024 - 06:47- Research Sheet- Source: Newsquawk