Newsquawk Daily European Equity Opening News

17th August 2020

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

From 0700BST/0100CDT all equity news will be covered in real-time over the audio and headline feed and the full audio rundown will be at 0715BST/0115CDT.

There will be an additional audio rundown at 0750BST/0150CDT recapping any company news which has hit the wires since 0715BST/0115CDT ahead of the European equity open.

ASIA

Asian equity markets began the week somewhat mixed amid uncertainty following the indefinite postponement of the US-China trade agreement review talks and with President Trump increasing the pressure on ByteDance and is said to be looking at pressuring other Chinese companies including Alibaba. ASX 200 (-0.6%) and Nikkei 225 (-0.7%) were negative with Australia led lower by underperformance in financials and with a deluge of earnings updates also in focus, while the Japanese benchmark suffered on recent currency effects and after a larger than expected contraction for Q2 GDP. Hang Seng (+1.4%)  and Shanghai Comp. (+2.3%) traded positively despite the ongoing tension between the world’s two largest economies, as risk appetite was helped by efforts from the PBoC which announced a CNY 50bln reverse repo injection and a CNY 700bln in 1-year Medium-term Lending Facility. Furthermore, notable gains were seen in Xiaomi and WuXi Biologics as they are set to join the Hang Seng Index from September 7th and with Xiaomi also buoyed after the CEO debuted a live showcase of products on TikTok.

FTSE 100

BAE Systems (BA/ LN) – UK Defence Industry is calling for the procurement process for awarded contracts to give greater recognition to bids which represent enhanced value to the UK economically. (FT)

Morrisons (MRW LN) – Co. is to trial, initially in a handful of stores, the permanent removal of plastic ‘bags for life’. (Guardian)

Rolls-Royce (RR/ LN) – Co. notes that microcracks were detected on Rolls-Royce Airbus (AIR FP) A350 engines. (Newswires)

Schroders (SDR LN) – Co. is to reportedly allow thousands of workers to continue working from home permanently as part of flexible working agreements. (Telegraph)

SSE (SSE LN) - Co. has warned that energy network upgrades that are required to help Britain meet its target of net zero emissions will face "years of delay" due to flawed proposals from OFGEM. (Times)

Tesco (TSCO LN) - Co. is set to confront Amazon (AMZN) in the online grocery arms race by introducing free delivery for customers on its Clubcard Plus loyalty scheme. (Telegraph)

UK Energy Suppliers – Energy suppliers are reportedly concerned about an increase in households defaulting on their bills in H2 particularly after the furlough scheme concludes in October. (FT)

UK Housing - UK Rightmove House Price Index M/M -0.2% (Prev. 1.9%). Rightmove said over GBP 37bln of property came on sale in July, with prices hitting unseasonal record highs in seven regions, but a fall in London pulled down the national average, as Londoners fled the city after lockdown. (Newswires)

OTHER UK COMPANIES

Cineworld (CINE LN) - Co. is set to face court battle after one of its landlords launched legal action against the Co. over unpaid rent. (Telegraph)

Frasers Group (FRAS LN) – Co. has reportedly placed a bid for DW Sports, offering GBP 30mln for the Co; administrators for DW were reportedly seeking GBP 20mln. (City AM)

BROKER MOVES

BURBERRY (BRBY LN) UPGRADED TO HOLD FROM BUY UNDERPERFORM AT JEFFERIES

EASYJET (EZJ LN) REITERATED WITH NEUTRAL JPMORGAN CHASE

RYANAIR (RYA LN) REITERATED WITH OVERWEIGHT AT JPMORGAN CHASE

DAX

Lufthansa (LHA GY) – German cabin crew union UFO voted in favour of the EUR 500mln cost-cutting deal. Meanwhile, the Co.’s broke off talks with labour union Verdi over ground personnel. (Newswires)

OTHER GERMAN COMPANIES

Porsche (PAH3 GY) – Co. is planning to build a EUR 250mln Slovakian production plant. (Newswires)

BROKER MOVES

BUNZL (BNZL GY) DOWNGRADE TO NEUTRAL FROM BUY AT GOLDMAN SACHS

HELLA (HLE GY) REITERATED WITH OVERWEIGHT AT JPMORGAN CHASE

SCOUT24 (G24 GY) DOWNGRADED TO HOLD FROM BUY AT SOCGEN

CAC

Sanofi (SAN FP) – Co. is to acquire Principia Biopharma (PRNB) in an all-cash deal valued at approximately USD 3.4bln. The deal will further strengthen core R&D areas of autoimmune and allergic diseases. Sanofi expects to complete the purchase in Q4 2020. Under the deal, all outstanding Principia Biopharma shares will be bought for USD 100/shr (vs. USD 90.74/shr close on Friday) (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

LVMH (MC FP) UPGRADED TO BUY FROM HOLD AT JEFFERIES

PERNOD RICARD (RI FP) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT BARCLAYS

PAN EUROPE

GlaxoSmithKline (GSK LN)/Sanofi (SAN FP) – Heads of Cos have noted that “rapid progress” was being made to treat COVID-19 but, noted that the race for a vaccine is a marathon and not a sprint. (Times) 

Tech stocks - US President Trump issued a new order to increase the pressure on TikTok parent ByteDance which orders the Co. to divest itself of any assets used to support the TikTok app in the US within 90 days. Furthermore, President Trump was asked on Saturday if he was contemplating punitive action against more Chinese companies, such as Alibaba to which he replied: "We're looking at other things, yes we are”. (Newswires)

BROKER MOVES

SMI

Roche (ROG SW) – FDA has approved Co’s Ensprying for Neuromyelitis Optica spectrum disorder. (Newswires)

UBS (UBSG SW) – UBS has surpassed Amundi (AMUN FP) as the largest manager of retail investor assets within Europe. (FT)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

BROKER MOVES

US

SPX 0.00% at 3373, NDX -0.1% at 11164, DJI +0.1% at 27932. SECTORS: Energy +0.9%, Materials +0.1%, Industrials +0.4%, Consumer Discretionary -0.1%, Consumer Staples -0.1%, Health Care -0.3%, Financials +0.2%, IT -0.1%, Telecoms -0.1%, Utilities -0.9%.

17 Aug 2020 - 06:40- Research Sheet- Source: newsquawk