Newsquawk Daily European Equity Opening News - 20th October 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

Asian equity markets traded mostly positive as the region took its cue from the extended gains on Wall Street where sentiment was underpinned amid encouraging earnings results and with some hopes for a breakthrough on reconciliation as the White House and Democrats continued deliberations. ASX 200 (+0.7%) was led higher by outperformance in tech and with nearly all of its sectors in the green, while there were also gains seen in some of the blue-chip miners and across the big four banks. Nikkei 225 (+0.3%) was lifted by the weaker currency and following better than expected Exports and Imports data, although the index stalled just shy of the 29.5k level, while KOSPI (-0.3%) failed to hold on to opening gains with confirmation from North Korea that it fired a new submarine launched ballistic missile on Tuesday. Hang Seng (+1.2%) and Shanghai Comp. (Unch.) were varied whereby Hong Kong was boosted by tech and health care with Alibaba leading the advances after it recently unveiled China’s most advanced chip and with its founder Jack Ma travelling abroad for the first time in over a year who is currently on a study tour in Spain. Conversely, the mainland was subdued alongside weakness in domestic commodity prices and despite a firmer liquidity effort by the PBoC, while the central bank provided no surprises in maintaining its benchmark Loan Prime Rates unchanged for the 18th consecutive month and a PBoC-backed paper also noted that expectations for a RRR cut during Q4 have eased.

EUROPEAN CLOSES

CLOSES: EURO STOXX 50 +0.4% at 4,167, FTSE 100 +0.2% at 7,218, DAX 40 +0.3% at 15,516, CAC 40 -0.1% at 6,670, FTSE MIB +0.2% at 26,333, IBEX 35 +0.7% at 8,996, SMI -0.2% at 11,943.

SECTORS: Utilities 1.28%, Technology 0.91%, Consumer Services 0.73%, Industrials 0.63%, Financial Services 0.50%, Energy 0.49%, Healthcare 0.40%, Basic Materials 0.39%, Consumer Goods -0.45%, Telecoms -0.77%

FTSE 100

BHP (BHP LN) - BHP has raised its offer for nickel miner Noront Resources by 36% to CAD 0.75/shr, above the CAD 0.70/shr offered by Wyloo. (Newswires)

British American Tobacco (BATS LN)/ Imperial Brands (IMB LN) – Individual cigarettes may have ‘smoking kills’ printed on them, as part of measures proposed by UK MPs to encourage people to stop smoking; measure has been put forward as an amendment to the health and care bill. (Guardian)

BT (BT/A LN) – Co. is taking the ruling that claimants can proceed on an opt-out basis relating to the overcharging of customers in a GBP 600mln suit to the Court of Appeal. Co. is to argue that guidance around opt-out vs opt-in had not been properly considered; however, the Competition Appeal Tribunal said that BT has ‘no real prospect’ of succeeding. (CityAM)

Morrisons (MRW LN) - Shareholders have approved CD&R's GBP 2.87/shr takeover offer. Shares closed at 2.8520/shr on Tuesday

Rio Tinto (RIO LN) - Co. has announced a AUD 7.5bln carbon programme by 2030. (Newswires)

UK Banks - UK Chancellor Sunak will, in next week's budget, cut the surcharge on bank profits from 8% to 3% effective April 2023, according to sources, as part of measures to ensure the UK remains competitive amid higher corporation taxes. (FT)

OTHER UK COMPANIES

BROKER MOVES

BHP (BHP LN) DOWNGRADED TO HOLD FROM BUY AT JEFFERIES

BOOHOO (BOO LN) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY

IAG (IAG LN) DPWNGRADED TO HOLD FROM BUY AT PEEL HUNT

DAX

BMW (BMW GY) - Chinese market regulator noted that the Co. plans to buy a manufacturing unit from Huachen group, according to reports. (Newswires)

Deutsche Boerse (DB1 GY) - Q3 revenue EUR 830mln vs exp. EUR 890mln. Net income EUR 300mln vs exp. EUR 280mln. Adj. EBITDA EUR 500mln vs exp. 470mln. Co. affirmed its FY21 EBITDA and revenue guidance. (Newswires)

Volkswagen (VOW3 GY) – CEO Diess says they are ready to collaborate with third-parties on software and they regularly explore options. (Newswires)

OTHER GERMAN COMPANIES

KWS (KWS GY) - Revenue EUR 1.31bln vs prev. EUR 1.28bln. EBIT EUR 137mln vs prev. EUR 226mln. Co. raises its FY dividend. (Newswires)

Sartorius (SRT GY) - 9M net EUR 407mln vs prev. EUR 211mln. EBITDA EUR 866.4mln vs prev. EUR 488.7mln. Revenue EUR 2.53bln vs prev. EUR 1.68bln. (Newswires)

BROKER MOVES

HEIDELBERGCEMENT (HEI GY) REITERATED WITH UNDERWEIGHT AT JPMORGAN CHASE

CAC

Airbus (AIR FP) – Boeing (BA) forecasts that the 20-year middle-East commercial jet/services market is valued in excess of USD 1.4trl. (Newswires)

Pernod Ricard (RI FP) - Co. is said to be acquiring a minority stake in Mexican whisky Abasolo from spirits name Casa Lumbre, sources state. Details are light. (Newswires)

Kering (KER FP) - Q3 consolidated revenue EUR 4.19bln vs prev. EUR 4.72bln. Gucci revenue EUR 2.18bln vs prev. EUR 2.09bln. Gucci performance in Q3 hit by resurgence of covid-19 cases in Asia. Business levels were driven by very strong momentum in North America. APAC comp sales +1% in Q3; APAC retail sales for Gucci in Q3 down 3%. CFO said the group is not facing supply chain issues in terms of manufacturing and raw materials. CFO said that due to investments planned for Gucci in Q4, profitability growth could be below 1.5-2% point range range indicated previously. (Newswires)

Vinci (DG FP) - 9M revenue EUR 35.8bln vs prev. EUR 30.8bln. Co. confirmed guidance and noted that earnings should rise sharply Y/Y while remaining lower than 2019 level. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

ALSTOM (ALO FP) INITIATED WITH BUY AT HSBC

PAN EUROPE

Akzo Nobel (AKZA NA) - Q3 revenue EUR 2.41bln vs prev. EUR 2.28bln. Adj. operating profit EUR 241mln vs prev. EUR 326mln. Co. affirms guidance. (Newswires)

ASML (ASML NA) - Q3 revenue EUR 5.24bln vs exp. EUR 5.27bln. Net EUR 1.74bln vs prev. EUR 1.6bln. Co. raises its quarterly dividend to EUR 1.80 vs prev. EUR 1.60. Co. affirms FY21 gross margin target and FY25 revenue target. CEO notes that demand remains strong. Co. is "on track to achieving growth approaching 35%". (Newswires/ASML IR) The release does not provide an outlook on the chip shortage

BROKER MOVES

SMI

Nestle (NESN SW) - 9M revenue CHF 63.3bln vs exp. CHF 62.9bln. Organic growth reached 7.6%, with real internal growth (RIG) of 6.0% and pricing of 1.6%. Growth was supported by continued momentum in retail sales, steady recovery of out-of-home channels, increased pricing and market share gains. Co. raises FY guidance and now sees organic revenue growth of +6-7% (vs prev. 5-6%). Underlying EPS and capital efficiency are expected to increase this year. CEO notes "In the third quarter, we increased pricing in a responsible manner, while maintaining strong real internal growth.". (Newswires/ Nestle IR)

Roche (ROG SW) - Q3 revenue CHF 16bln vs exp. CHF 15.5bln. 9M sales CHF 46.684bln vs prev. CHF 43.979bln, with sales growth of 8%. Co. raises FY guidance and now expected to grow in the "mid-single digit range" (vs prev. "in the low to mid-single digit range"). Roche expects to increase its dividend in Swiss francs further. 9M regional sales breakdown: US CHF 16.707bln vs prev. CHF 18.389bln, Europe CHF 6.61bln vs prev. CHF 6.268bln, Japan CHF 3.189bln vs prev. CHF 2.802bln, International CHF 6.876bln vs prev. CHF 6.858bln. Competition from biosimilars for the established cancer medicines MabThera/Rituxan, Avastin and Herceptin led to an overall decline in the US. (Newswires /Roche IR)

OTHER SWISS COMPANIES

Kuehne & Nagel (KNIN SW) - Q3 net CHF 578mln vs prev. CHF 266mln Y/Y. Revenue CHF 8.57bln vs prev. CHF 5.03bln. (Newswires)

BROKER MOVES

SCANDINAVIA

Handelsbanken (SHBA SS) – To divest units in Denmark and Finland and instead will be focusing on building their UK and Norwegian businesses. (Newswires)

S.E.B (SEBA SS) - Q3 Net profit SEK 7.997bln vs prev. SEK 7.916bln. NII SEK 6.639bln vs exp. SEK 6.592bln. Co. proposed a SEK 2.5bln share buyback programme. (Newswires)

Vopak (VPK NA) - Current CEO is to resign and be replaced by Dick Richelle. (Newswires)

BROKER MOVES

H&M (HMB SS) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY

US

Facebook (FB) reportedly wants to rebrand the Co. and change its name next week. (The Verge)

McDonalds (MCD) – China is reportedly encouraging the Co., among others, to expand their digital renminbi payment systems in the nation prior to the Beijing Winter Olympics in February. (FT)

Netflix Inc (NFLX) - Q3 2021 (USD): EPS 3.19 (exp. 2.56), Revenue 7.50bln (exp. 7.48bln). Net Subscriber Additions: 4.38mln (exp. 3.84mln), sees Q4 global streaming paid net additions 8.5mln (exp. 8.3mln). Q4 EPS view: 0.80 (exp. 1.11/1.10 GAAP). Q4 rev. view 7.71bln (exp. 7.67bln). Anticipates Q4 FCF to be negative with production volume ramping successfully and lower operating margin in Q4. (Newswires) Shares fell 1.4% after market

CLOSES: SPX +0.8% at 4,521, NDX +0.7% at 15,411, DJIA +0.6% at 35,458, RUT +0.6% at 2,280.

SECTORS: Health Care +1.3%, Utilities +1.3%, Energy +1.1%, Financials +1.0%, Information Technology +1.0%, Communication Services +0.8%, Industrials +0.6%, Materials +0.5%, Real Estate +0.4%, Consumer Staples +0.1%, Consumer Discretionary -0.3%.

20 Oct 2021 - 06:53- Research Sheet- Source: Newsquawk