Newsquawk Daily European Equity Opening News - 20th February 2024

20th February 2024

ASIA

APAC stocks traded with mild losses with price action contained following the US holiday lull. ASX 200 was dragged lower by miners after BHP reported flat underlying profits and cut its dividend by 20%. Nikkei 225 reversed its earlier advances as momentum stalled and the 1989 record high remained elusive. Hang Seng and Shanghai Comp. were lacklustre as tech weakness in Hong Kong clouded over the gains in the energy sector, while the mainland was rangebound as participants digested the announcement of the PBoC's latest benchmark rates in which the 1-year LPR was surprisingly maintained at 3.45% (exp. 5bps cut), but the 5-year LPR was cut by 25bps (exp. 10bps cut).

ANZ Bank's (ANZ AT) - AUD 4.9bln buyout of Suncorp's (SUN AT) banking arm was approved by the Australian Competition Tribunal. (Newswires)

BHP (BHP AT) - H1 (USD) profit after tax attributable 927mln (prev. 6.5bln Y/Y), underlying profit 6.6bln (prev. 6.6bln Y/Y), underlying EBITDA USD 13.9bln (prev. 13.2bln Y/Y), rev. 27.2bln (prev. 25.7bln Y/Y), lowers the H1 dividend by 20% to USD 0.72/shr. Says: The external operating environment in calendar year 2023 was relatively volatile. China and India are expected to remain relative sources of stability for commodity demand as they have been over the last 12 months. The nickel industry is expected to experience a difficult multi-year run. Sees near-term broad-based end-user demand growth for copper to continue in China at a somewhat slower pace than the 6% Y/Y rate in 2023. (Newswires)

Chinese Property Sector - PBoC 5-Year Loan Prime Rate (Feb) 3.95% vs Exp. 4.10% (Prev. 4.20%); 1-Year Loan Prime Rate (Feb) 3.45% vs Exp. 3.40% (Prev. 3.45%). China's Hainan cuts down payments for first-time home buyers again, according to Bloomberg. (Bloomberg)

EUROPEAN CLOSES

CLOSES: DAX: -0.15% at 17,092.26, FTSE 100: +0.22% at 7,728.50, CAC 40: +0.0% at 7,768.55, Euro Stoxx 50: -0.05% at 4,763.25, IBEX 35: +0.6% at 9,944.80, FTSE MIB: -0.2% at 31,676.05, SMI: +0.76% at 11,398.44.

SECTORS: Healthcare 1.00%, Telecoms 0.73%, Consumer Stpl 0.46%, Energy 0.26%, Industrials 0.10%, Financials 0.06%, Consumer Disc -0.03%, Utilities -0.17%, Materials -0.26%, IT -0.97%

FTSE 100

BAE Systems (BA/ LN) - The Australian Navy is to more than double the number of warships, also add missile-firing drone ships. (Daily Telegraph AU)

Glencore (GLEN LN) - Glencore-backed miner, Horizonte Minerals, has warned that it needs almost USD 1bln (prev. 537mln budget) to restart a nickel project in Northern Brazil, according to Bloomberg. (Bloomberg)

OTHER UK COMPANIES

Superdry (SDRY LN) - The owner of Oak Furnitureland, Kempner, is in early talks with Superdry CEO Julian Dunkerton to back a bid for the Co., according to City AM. (City AM)

BROKER MOVES

DAX

Bayer (BAYN GY) - Plans to amend its dividend policy to reduce debt, plans to amend dividend policy to pay out legally required minimum for three years; which would result in a dividend of EUR 0.11/shr for FY23 (prev. EUR 2.40/shr for FY22) - a 95% cut. (Newswires) Note: this was announced at 16:25 GMT (in market hours) on 19th Feb 2024. Co. holds a 2.7% weighting in the DAX 40. Co. shares seen opening lower by 3.2%.

Fresenius Medical Care (FME GY) - Q4 (EUR): EPS 0.88 (exp. 0.33), EBIT 428mln (exp. 382mln), Revenue 4.99bln (exp. 4.94bln). Guides initial FY24 Revenue "grow low to mid-single-digit % Y/Y", Op "grow mid to high teen % Y/Y". Affirms FY25 Op. margin 10-14% (prev. guided 10-14%). (Newswires) Shares +1.3% in pre-market trade.

RWE (RWE GY) - Secures contract for 8 projects in NW France with a combined capacity of 108.7MW, terms not disclosed. (reNews)

OTHER GERMAN COMPANIES

Lufthansa (LHA GY) - EU reportedly is preparing the statement of objection over Co's USD 350mln transactions with ITA Airways and Italy Govt/Treasury. (Newswires)

BROKER MOVES

Bayer (BAYN GY) upgraded to Hold from Reduce at HSBC

Heidelberg Materials (HEI GY) upgraded to Overweight from Underweight at Barclays

CAC

Air Liquide (AI FP) - FY23 (EUR): Net 3.08bln (exp. 3.40bln), Op. 5.07bln (exp. 5.05bln), Revenue 27.6bln (exp. 27.7bln). Confirms its advanced financial objectives. Payment of EUR 3.20/shr will be proposed to shareholders for 2023, +8.5% Y/Y. (Newswires)

OTHER FRENCH COMPANIES

Orpea (ORP FP) - Implementation of reverse split of outstanding shares, from 20th February to 21st March. (Newswires)

BROKER MOVES

PAN EUROPE

Arcadis (ARCAD NA) - Secures large multi-million-pound contract to manage, maintain and protect thousands of historic assets in the UK. (Newswires)

ASML (ASML NA) - Dutch Trade Minister says China seeks military advantage from ASML's computer chip equipment. (Newswires)

Airbus (AIR FP) / Rolls Royce (RR/ LN) - Airbus CEO says the relationship with Rolls-Royce is good. (Newswires)

argenx (ARGX BB) - Announces FDA Acceptance of Supplemental Biologics License Application with Priority Review for VYVGART Hytrulo in Chronic Inflammatory Demyelinating Polyneuropathy. (Global Newswire)

EU Auto Names - Volkswagen (VOW3 GY), Renault (RNO FP) and Stellantis (STLAP FP/STLAM IM) are exploring tie-ups with competitors to make cheaper EVs to compete with Chinese rivals and Tesla (TSLA), according to Bloomberg. (Bloomberg)

Enagas (ENG SM) - FY (EUR): Revenue 919mln (exp. 970mln), Net 345mln (exp. 375mln) EBITDA 780mln (exp. 797mln). Attained all 2023 targets. (Newswires)

EU Cos - Chinese Foreign Minister Wang told his Spanish counterpart that China is ready to maintain high-level exchanges with Spain and strengthen the synergy of development strategies, as well as deepen mutually beneficial cooperation. Wang said China regards the EU as an important force in the multipolar pattern and supports European integration, the development and growth of the EU, and realising strategic autonomy. Furthermore, he said as long as China and the EU strengthen solidarity and cooperation, bloc confrontation will not arise and they are ready to work with the EU to uphold the free trade system, practice multilateralism, promote an equal and orderly multipolar world and inclusive economic globalisation. (Newswires)

Mining names - BHP (BHP AT) - H1 (USD) profit after tax attributable 927mln (prev. 6.5bln Y/Y), underlying profit 6.6bln (prev. 6.6bln Y/Y), underlying EBITDA USD 13.9bln (prev. 13.2bln Y/Y), rev. 27.2bln (prev. 25.7bln Y/Y), lowers the H1 dividend by 20% to USD 0.72/shr. Says: The external operating environment in calendar year 2023 was relatively volatile. (Newswires) Shares fell 1.1% in Australian trade.

Melia Hotels (MEL SM) - Santander (SAN SM) to pay EUR 300mln for a 38.2% stake in three Melia hotels. (Newswires)

BROKER MOVES

Buzzi Unicem (BZU IM) upgraded to Overweight from Equal Weight at Barclays

Heineken (HEIA NA) downgraded to Underperform from Sector Perform at RBC

SMI

OTHER SWISS COMPANIES

Siegfried Holding (SFZN SW) - FY23 (CHF): Core Net 128.1mln (prev. 127.8mln Y/Y), Core EBITDA 273.3mln (exp. 270.4mln), Revenue 1.27bln (prev. 1.23bln Y/Y). (Newswires)

Temenos (TEMN SW) - Q4 (USD): EPS 1.03 +4% Y/Y, EBIT 101.3mln, +8% Y/Y, Revenue 298mln, +7% Y/Y. Guides initial FY24 growth +6-8%, EBIT +7-9%; In other news, the Co. have announced an independent review of the claims made in the short-seller report by Hindenburg Research, via Bloomberg. (Newswires/Bloomberg)

BROKER MOVES

Holcim (HOLN SW) downgraded to Underweight from Equal Weight at Barclays

Sandoz (SDZ SW) downgraded to Equal Weight from Overweight at Morgan Stanley

SCANDINAVIA

Norsk Hydro (NHY NO) - CFO Kildemo has warned that the construction sector in some nations is subject to a slump in demand similar to that seen in the COVID period. Does not expect a H1 aluminium demand recovery. (Newswires)

BROKER MOVES

SSAB (SSABA SS) downgraded to Hold from Buy at Deutsche Bank

US

AI/Cloud Names - Microsoft (MSFT) is to expand its AI and cloud infrastructure within Spain by USD 2.1bln over the next two years. (Newswires)

Energy Names – ExxonMobil (XOM) has set aside USD 20bln for decarbonisation schemes between 2022-27, but will probably prioritize other areas as opposed to Europe given red tape/regulations in the region. (FT)

20 Feb 2024 - 06:56- Research Sheet- Source: Newsquawk