Newsquawk Daily European Equity Opening News - 21st July 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 stocks traded with a positive bias as the region partially took impetus from the rebound on Wall St where the COVID-triggered risk aversion abated to help the major indices retrace Monday's declines and with the recovery spearheaded by outperformance in cyclicals. ASX 200 (+1.0%) was underpinned by strength across most commodity-related industries, led by energy and with quarterly updates in focus including CIMIC which was among the biggest gainers despite posting weaker half-year net, as its revenue jumped and it also maintained full-year net profit guidance. This helped the index ignore a continued rise in domestic COVID-19 infections and disappointing Retail Sales data to reclaim the 7,300 level and briefly move to about 50+ points from all-time highs. Nikkei 225 (+0.4%) surged at the open following better than expected trade data including a 48.6% jump in Exports and reports that the government is to extend the employment subsidy program through end-December, but with gains then capped amid further infections of athletes as the first events of Tokyo 2020 got underway. Hang Seng (-0.5%) and Shanghai Comp. (+0.6%) were mixed with Hong Kong dragged lower after plans to ease rules on arrivals were delayed, while notable pressure was seen in cyclicals and WuXi Biologics suffered heavily due to its parent offloading 80mln shares. The mainland was positive amid conflicting views on the PBoC with some analysts suggesting that the PBoC may further reduce financing costs in H2, although attention was on the deadly flooding in Henan which has led to dam collapses in the region, mass evacuations and at least a dozen casualties with many more trapped in a flooded subway. Finally, 10yr JGBs were lacklustre amid the positive mood in Japanese stocks and recent whipsawing in USTs, although downside for Japanese bonds are also limited amid the BoJ’s presence in the market for almost JPY 1.4tln of JGBs with mostly 1yr-10yr maturities.

EUROPEAN CLOSES

CLOSES: EURO STOXX 50 +0.76% at 3,958; FTSE 100 +0.55% at 6,882; DAX +0.57% at 15,220; CAC 40 +0.93% at 6,354; IBEX 35 +0.67% at 8,357; FTSE MIB +0.85% at 24,169; SMI +0.89% at 11,968.

SECTORS: Financials 1.18%, Industrials 1.03%, Materials 0.99%, Energy 0.40%, Consumer Disc 0.25%, Telecoms 0.11%, IT 0.05%, Consumer Stpl 0.03%, Healthcare -0.09%, Utilities -0.25%

FTSE 100

Rio Tinto (RIO LN) - Co. has reached an agreement with the Bougainville Community to identify and assess legacy impacts of the former Panguna copper mine; as part of this, they will be jointly funding a study into the environmental and human rights impact of the shuttered mine. (Newswires/FT)

OTHER UK COMPANIES

Centrica (CNA LN) – The GMB union, representing British Gas workers, has accepted an improved pay deal which ends the ‘fire and rehire’ dispute. New deal has improved overnight and reopens the defined-benefit pension scheme, among other measures. (Times)

Morrisons (MRW LN) – Clayton Dubilier & Rice is reportedly working on another bid for the Co., following the rejection last month of their GBP 5.5bln offer. Advisers to Clayton Dubilier & Rice do not believe they will make their intentions public until investors receive the full documents for the already accepted GBP 6.3bln Fortress bid. (Times) Earlier in the week, Apollo announced that it was in discussion to join Fortress and would not be making an offer of its own.

BROKER MOVES

HISCOX (HSX LN) UPGRADED TO BUY FROM HOLD AT HSBC

NEXT (NXT LN) UPGRADED TO HOLD FROM SELL AT BERENBERG

SCHRODERS (SDR LN) UPGRADED TO SECTOR PERFORM FROM UNDERPERFORM AT RBC

DAX

Daimler (DAI GY) - Q2 revenue EUR 43.48bln vs exp. EUR 42.7bln. EBIT EUR 5.185bln vs prev. EUR -1.682bln. EPS EUR 3.36 vs prev. EUR -1.87. Net EUR 3.70bln vs prev. EUR -1.91bln. Co. says the listing of Daimler Trucks is on track. Co. affirms FY21 EBIT and revenue guidance being "significantly higher". Co. raises FY21 Industrial FCF to "slightly below" YY vs prev. "significantly below" YY. Co. raises high-end trucks and busses Adj. return on sales between 6-8% vs prev. 6-7%. Co. notes that the chip shortage is to affect business in H2 2021 and thus cut its FY Mercedes-~Benz car sales guidance. Daimler anticipates a continued favourable development of worldwide demand for cars this year and significant growth in market volume for 2021 as a whole. (Newswires/Daimler) Co. holds a 3.9% weighting in the DAX and 1.9% in the Euro Stoxx 50

SAP (SAP GY) - Q2 non-IFRS revenue EUR 6.67bln vs prev. EUR 6.74bln YY. Operating profit EUR 1.92bln vs prev. EUR 1.964bln. Basic EPS EUR 1.75 vs prev. EUR 1.17. Cloud revenue EUR 2.276bln vs prev. EUR 2.044bln. Software licenses and support revenue EUR 3.474bln vs prev. EUR 3.665bln. SAP is raising its full-year 2021 outlook, reflecting the strong business performance which is expected to accelerate cloud revenue growth. Cloud revenue is now expected between EUR 9.3-9.5bln vs prev. EUR 9.2-9.5bln. Cloud and Software revenue seen between EUR 23.6-24bln vs prev. EUR 23.4-23.8bln. Operating profit now seen between EUR 7.95-8.25bln vs prev. EUR 7.8-8.2bln. (Newswires/SAP) Co. holds a 10% weighting in the DAX and 4.5% in the Euro Stoxx 50

OTHER GERMAN COMPANIES

Sartorius (SRT GY) - H1 underlying EBITDA EUR 487mln. H1 revenue EUR 1.35bln. (Newswires)

Software AG (SOW GY) - Q2 revenue EUR 218mln vs exp. EUR 193mln. Co. affirms mid-term revenue guidance. (Newswires)

BROKER MOVES

DWS (DWS GY) UPGRADED TO OUTPERFROM FROM SECTOR PERFORM AT RBC

CAC

Suez (SEV FP)/Veolia (VIE FP) - The French market regulator has approved the draft offer document for the Veolia-Suez deal. (Newswires)

OTHER FRENCH COMPANIES

Orpea (OR FP) - Q1 revenue EUR 1.04bln vs exp. EUR 1.03bln. Co. raises FY revenue outlook. (Newswires)

Somfy (SO FP) - Q2 revenue EUR 429.3mln vs prev. EUR 277.6mln. Co. guides H1 operating profit to sharply increase. (Newswires)

Ubisoft (UBI FP) - Q1 sales EUR 352.8mln vs exp. 331.8mln. Confirms FY 2021/22 targets. (Newswires)

BROKER MOVES

ALSTOM (ALO FP) REITERATED WITH OVERWEIGHT AT JPMORGAN CHASE

PAN EUROPE

Akzo Nobel (AKZA NA) – Q2 net income EUR 261mln vs exp. EUR 228mln, adj. operating income EUR 335mln vs exp. EUR 346mln. Targets growth at least in-line with relevant markets. There are differing trends depending on region/segment with significant raw material inflation expected to continue into H2. (Newswires)

ASML (ASML NA) - Q2 net sales EUR 4.02bln vs prev. EUR 3.326bln YY. Gross profit EUR 2.045bln vs prev. EUR 1.603bln. Gross margin 50.9% vs prev. 48.2%. Diluted EPS EUR 2.52 vs prev. 3.20 QQ. Co. affirms targets. Co. announced a new share buyback programme of up to EUR 9bln. Co. sees Q3 net sales between EUR 5.2-5.4bln vs exp. EUR 4.69bln. in 2021, Co. sees strong demand across markets, expected to drive net sales growth by around 35%. (Newswires/ASML) Co. holds a 17.6% in the AEX and a 7.4% weighting in the Euro Stoxx 50

Salvator Ferragamo (SFER IM) - H1 revenue EUR 524mln (exp. 551mln), +44.1%. (Newswires)

BROKER MOVES

ASR NEDERLAND (ASRNL NA) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT MORGAN STANLEY

MEDIASET ESPANA (TL5 SM) UPGRADED TO BUY FROM HOLD AT BERENBERG

NN GROUP (NN NA) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY

SMI

Novartis (NOVN SW) - Q2 revenue USD 12.96bln vs exp. USD 12.49bln. Core EPS USD 1.66 vs exp. USD 1.54. FCF USD 4.235bln vs prev. USD 3.631bln. Innovative Medicine sales +15% YY, Sandoz sales +11% YY. Core EPS margin 33.5% vs prev. 32.3% YY. Co. reaffirms guidance. Guidance assumes a continuation of the return to normal global healthcare systems including prescription dynamics, particularly oncology, in H2 2021. In addition, Co. assumes that no Gilenya and no Sandostatin LAR generics will enter the US this year. (Newswires/Novartis) Co. holds a 17.5% weighting in the SMI

Julius Baer (BAER SW) – H1 EPS CHF 2.81 vs exp. CHF 3.03, net profit EUR 606mln, +23%; adj. for M&A net profit EUR 636mln, +21%. AUM CHF 486bln, +12% from end-2020. CET1 ratio 16.7%. CEO says they are ready to capture growth opportunities within core markets as opportunities to do so arise. (Newswires)

Roche (ROG SW) - US FDA grants Breakthrough Therapy Designation for Venclexta in combination with azacitidine for the treatment of patients with myelodysplastic syndromes. (Roche)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Evolution Gaming AB (EVO SS) – Q2 revenue EUR 256mln vs exp. EUR 251mln, EBITDA EUR 174mln vs exp. EUR 172mln, profit EUR 144mln. (Newswires)

Nordea (NDA SS) - Q1 revenue EUR 2.42bln vs prev. EUR 2.09bln YY. Operating profit EUR 1.34bln vs prev. EUR 306mln. Co. is to begin a share buyback in Q4 and will decide on a dividend. (Newswires)

Telia (TELIA SS) – Q2 revenue SEK 21.8bln vs exp. SEK 21.56bln, adj. EBITDA SEK 7.7bln vs exp. SEK 7.7bln. Reiterate FY outlook of service revenues and EBITDA. Saw a further stabilisation of the consumer mobile customer base. (Newswires)

BROKER MOVES

US

CLOSES: SPX +1.52% at 4,323, NDX +1.23% at 14,728, DJIA +1.62% at 34,511, RUT +2.96% at 2,193.

SECTORS: INDUSTRIALS +2.74%, FINANCIALS +2.42%, REAL ESTATE +1.88%, CONSUMER DISCRETIONARY +1.72%, TECHNOLOGY +1.47%, ENERGY +1.38%, MATERIALS +1.2%, HEALTH +1.2%, COMMUNICATION SERVICES +1.1%, UTILITIES +0.39%, CONSUMER STAPLES -0.08%.

Apple (AAPL) will have an all 5G line up next year in which it will not introduce any new 4G models next year nor will it introduce an updated iPhone mini next year, while budget 5g iPhone is set to be released in H1 next year. (Nikkei)

Netflix Inc (NFLX) - Q2 21 (USD): EPS 2.97 (exp. 3.16), Revenue 7.34bln (exp. 7.32bln). Net Subscriber Additions: 1.54mln (exp. 1.04mln)Co. sees Q3 Net Additions: 3.50mln (exp. 5.51mln), Q3 EPS USD 2.55 (exp. 2.17), Q3 Revenue: 7.48bln (exp. 7.48bln). Co. said retention continues to be strong and better than pre-COVID Q2 '19 levels. (Netflix) Shares rose 0.6% after market

21 Jul 2021 - 06:59- Research Sheet- Source: Newsquawk