Newsquawk Daily European Equity Opening News - 23rd January 2024

23rd January 2024

ASIA

APAC stocks mostly gained after the fresh record levels on Wall St but with gains capped ahead of risk events, while the region also digested the BoJ policy decision and reports of a potential Chinese equity market rescue package. ASX 200 was led higher by financials, tech and defensives, while stocks also shrugged off mixed business surveys. Nikkei 225 extended on gains after the BoJ maintained its ultra-easy policy, as widely expected, which briefly lifted the index to just shy of the 37,000 level where it then hit resistance and eventually wiped out all its earlier spoils. Hang Seng and Shanghai Comp were somewhat varied with Hong Kong boosted by reports that China was mulling an equity market rescue package which could be announced as soon as this week, while tech names were also helped after China's gaming regulator took down draft rules for controlling spending on video games from its website. Conversely, the mainland lagged as the initial support from the news of a potential equity market rescue waned given that potential support measures remain speculation and more stimulus will likely be needed to revive the property sector.

Chinese stocks - China is said to consider equity market rescue package backed by USD 278bln, according to Bloomberg citing sources. (Bloomberg)

EUROPEAN CLOSES

CLOSES: DAX +0.77% at 16,683.36, FTSE 100 +0.35% at 7,487.71, CAC 40 +0.56% at 7,413.25, Euro Stoxx 50 +0.69% at 4,479.55, IBEX 35 +1.11% at 9,968.10, FTSE MIB -0.33% at 30,182.32, SMI +1.07% at 11,270.00.

SECTORS: IT 2.09%, Financials 1.38%, Industrials 1.30%, Telecoms 1.05%, Healthcare 0.60%, Consumer Disc 0.59%, Consumer Stpl 0.11%, Materials -0.25%, Energy -0.26%, Utilities -0.35%

FTSE 100

GSK (GSK LN) - GSK is urging a US judge to find that the evidence claiming that the discontinued Zantac drug caused cancer is not backed by science. Plaintiffs’ lawyers want to use the evidence in 72,000 lawsuits, according to The Times. (Times)

OTHER UK COMPANIES

Endeavour Mining (EDV LN) – Co. has reportedly expanded an investigation into its former CEO after he admitted making an irregular payment understood to be related to the sale of the Agbaou goldmine to Canadian rival Allied Gold. The former CEO said the decision has “no additional cost to the company”. (Times)

BROKER MOVES

Compass (CPG LN) downgraded to Hold from Buy at HSBC

Spirax-Sirco (SPX LN) initiated with Hold at Berenberg

DAX

Merck (MRK GY) - Multiple new analyses reinforce the role of BAVENCIO® (avelumab) as a standard of care for eligible patients with locally advanced or metastatic urothelial carcinoma (UC) who do not progress on first-line chemotherapy. (Merck)

OTHER GERMAN COMPANIES

BROKER MOVES

CAC

Kering (KER FP) – Co. purchased a building in Manhattan for USD 963mln, according to Bloomberg. Elsewhere, the Vestiaire Collective, backed by the Co., is launching a crowdfunding campaign as it aims to achieve profitability by end-2024 and possibly IPO. (Bloomberg/Newswires)

Sanofi (SAN FP) - To purchase Inbrx-101 from Inhibrx for a total value of up to USD 2.2bln. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

Sodexo (SW FP) upgraded to Buy from Hold at HSBC

Saint Gobain (SGO FP) upgraded to Buy from Neutral at UBS

PAN EUROPE

Auto Names - Shipping executives have warned that the ongoing diversion of ships around the Cape of Good Hope is further reducing capacity for auto-carrying vessels on the Asia-Europe route. (FT)

Airliners - United Airlines Holdings Inc (UAL) - Q4 2023 (USD): Adj. EPS 2.00 (exp. 1.70), Revenue 13.60bln (exp. 13.54bln). (Newswires) UAL shares +6.1% after-hours

Melia Hotels (MEL SM) - CEO plans to open 20 hotels in 2024. (Newswires)

Naturgy Energy (NTGY SM) - Spain is reportedly to set conditions for Blackrock's stake in the Co., according to Expansion. (Expansion)

BROKER MOVES

ASML (ASML NA) initiated with Overweight at Cantor

SMI

OTHER SWISS COMPANIES

Swatch (UHR SW) - FY (CHF): Net Sales 7.88bln (exp. 7.922bln), Operating profit 1.191bln (prev. 1.158bln Y/Y). Dividend per registered share 1.30 (prev. 1.20); "In China, the Swatch Group will enjoy additional demand" in 2024. Net Margin 11.3% (prev. 11.0%). Operating Margin 15.1% (prev. 15.4%). "Despite huge exchange rate impacts, the Watches & Jewelry segment (including Production) achieved the same strong operating margin of 17.2%." 2024 OUTLOOK: "In China, the Swatch Group will enjoy additional demand with its strong brands in the lower and medium price segments. "Exchange rate movements will continue to impact the Group's results due to its strong industrial base in Switzerland." "America and Japan will continue to offer great growth prospects for the Group's brands." "The jewellery brand Harry Winston will surpass one billion in turnover in 2024." "Excellent growth prospects in 2024, especially also in the lower and medium price segments, despite the problematic strength of the Swiss franc." (Newswires)

BROKER MOVES

Geberit (GEBN SW) downgraded to Neutral from Buy at UBS

Sika (SIKA SW) upgraded to Buy from Neutral at UBS

Sandoz (SDZ SW) initiated with Buy at SocGen

Schindler (SCHN SW) upgraded to Buy from Hold at Jefferies

SCANDINAVIA

Ericsson (ERICB SS) - Q4 (SEK): Net Sales 71.88bln (exp. 76.64bln). Adj. EBIT 7.369bln (exp. 6.756bln). Gross Margin 41.1% (exp. 39.2%). Co. sees "further decline of the RAN market outside China [in 2024] as our customers remain cautious". "While the actions we have taken to improve performance are paying off, we are not satisfied with our profitability and there is more work to do." "The mobile network industry remains challenging. We expect the current market uncertainties to prevail into 2024". "The new US contract will start to ramp up in the second half of 2024." "Underlying demand from growing data traffic and 5G only being in the early stages of build-out will require additional network investments. In our view, the current investment levels are unsustainably low for many operators." Names Lars Sandstrom from Medtech firm Getinge (GETIB SS) as new CFO, effective April 1st. CFO: could be further cost cuts this year. CFO: Cost cuts could include layoffs but not yet identified any specific numbers. (Newswires)

FLSmidth (FLS DC) - FLSmidth Cement sold its MAAG gears and drives business to the Swedish investment company, Solix Group AB. The transaction is expected to close during the first quarter of 2024 and includes all related assets, including intellectual property, technology, employees and customer contracts. (FLSmidth)

Getinge (GETIB SS) - Appoints Agneta Palmer as CFO, effective immediately. (Newswires)

Zealand Pharma. (ZEAL DC) - CEO Steensberg says other drug makers, not just Novo Nordisk (NOVOBD DC) & Eli Lilly (LLY), could still come out on top in the rapidly growing obesity market. Adds, they would want to partner with other firms in future treatments instead of selling to a larger firm. (FT)

BROKER MOVES

Konecranes (CKR FH) downgraded to Sell from Hold at Handelsbanken

Saab (SAABB SS) downgraded to Hold from Buy at SEB

US

CLOSES: SPX +0.22% at 4,850, NDX +0.09% at 17,330, DJIA +0.36% at 38,001, RUT +2.01% at 1,983.

SECTORS: Industrials +0.74%, Real Estate +0.44%, Financials +0.43%, Technology +0.39%, Health +0.38%, Materials +0.3%, Energy +0.29%, Communication Services +0.03%, Consumer Staples -0.46%, Utilities -0.52%, Consumer Discretionary -0.52%.

United Airlines Holdings Inc (UAL) - Q4 2023 (USD): Adj. EPS 2.00 (exp. 1.70), Revenue 13.60bln (exp. 13.54bln). Passenger revenue USD 12.42bln (exp. 12.39bln). Cargo revenue USD 402mln (exp. 345.6mln)Other revenue USD 803mln (exp. 805.9mln). Revenue passenger miles 60.67bln (exp. 61.04bln). Available seat miles 73.73bln (exp. 73.48bln). Load factor 82.3% (exp. 83.2%). Sees Q1 adj. diluted loss/shr 0.35-0.85 (exp. loss 0.22). Sees FY adj. EPS USD 9.00-11.00 (exp. 9.45). Sees Boeing (BA) 737 MAX 9 grounding impact about 3ppts of incremental CASM-ex in Q1 based on fleet grounded January 6th-31st. (United Airlines) Shares +6.1% after-hours

23 Jan 2024 - 06:49- Research Sheet- Source: Newsquawk