Newsquawk Daily European Equity Opening News - 26th September 2024

ASIA

APAC stocks shrugged off the subdued handover from Wall St and the recent geopolitical escalation, as some 'progress' was said to be made regarding a temporary ceasefire proposal and a 21-day ceasefire was proposed by US and France, while China benefitted again from stimulus. ASX 200 saw gains across all sectors, while the RBA's FSR noted Australia's financial system is resilient and risks are contained. Nikkei 225 outperformed as exporters benefitted from recent currency weakness, while stale BoJ minutes did little to shift the dial. Hang Seng and Shanghai Comp extended on the recent rally owing to policy support after China's State Council issued guidelines for promoting high-quality employment and with China to give rare one-off cash handouts to people in extreme poverty ahead of the National Day holiday, while it was also reported that China was weighing injecting USD 142bln of capital into top banks.

Country Garden Holdings (2007 HK) - Bondholders reportedly approve delays on yuan bond payments, according to Bloomberg. (Bloomberg)

Chinese Banks - China weighs injecting USD 142bln of capital into top banks, according to Bloomberg. (Bloomberg)

EUROPEAN CLOSES

CLOSES: Euro Stoxx 50 -0.47% at 4,917, DAX -0.39% at 18,965, CAC 40 -0.50% at 7,596, FTSE 100 -0.17% at 8,319, SMI +0.76% at 12,140, FTSE MIB -0.12% at 33,988, IBEX 35 -0.38% at 11,857, PSI +0.43% at 6,802, AEX -0.12% at 908.

SECTORS: Industrials 0.50%, Materials 0.49%, Healthcare 0.40%, Telecoms 0.12%, Consumer Disc -0.03%, Consumer Stpl -0.12%, IT -0.18%, Utilities -0.19%, Financials -0.58%, Energy -2.20%

FTSE 100

AstraZeneca's (AZN LN) - FDA approves AstraZeneca's Osimertinib for locally advanced, unresectable (stage III) non-small cell lung cancer following chemoradiation therapy

BP (BP/ LN) - Says it has secured offshore facilities and removed some non-essential personnel from Argos, Atlantis, Mad Dog, Na Kika, and Thunder Horse platforms, adds it is working toward safely ramping up production across its Gulf of Mexico portfolio. (Newswires)

Ex-dividends - British American Tobacco (BATS LN), Rightmove (RMV LN), and Barratt Developments (BDEV LN) will trade without entitlement to their latest dividend payout. (dividenddata)

Flutter (FLTR LN) - The CFO said they are not ruling out that it may do a dividend in time, but think in the first instance a buyback is the right option to maintain flexibility. (Newswires) Follows a previously announced USD 5bln buyback.

UK Auto - UK car manufacturing output fell 8.4% Y/Y to 41,271 units in August, according to SMMT. (SMMT)

OTHER UK COMPANIES

Howden Joinery Group (HWDN LN) - JP Morgan places the Co. on Negative Catalyst watchlist. (Newswires)

BROKER MOVES

Experian (EXPN LN) upgraded to Sector Perform from Underperform at RBC

DAX

BASF (BAS GY) - Sets new direction with corporate strategy: Total shareholder distributions via dividends and share buybacks to amount to at least EUR 12bln between 2025 and 2028 with an annual dividend of at least EUR 2.25/share. New financial targets for EBITDA before special items (EUR 10-12bln in 2028) and cumulative free cash flow (more than EUR 12bln for 2025 to 2028). Specifically, the Co. will pay a dividend of at least EUR 2.25/shr (prev. EUR 3.40 Y/Y) or around EUR 2bln each year. This will already apply to the dividend for the 2024 business year to be paid out in 2025. (BASF) Shares -3% in pre-market trade after it lowered its 2025 dividend payment.

Commerzbank (CBK GY) - Author of EU Report on Single Market says UniCredit (UCG IM)/Commerzbank potential tie-up is a test for European integration and politics must let markets decide. (Newswires)

Siemens Energy (ENR GY) - Extends contract of CEO Bruch for a further 5 years. (Newswires)

OTHER GERMAN COMPANIES

KWS (KWS GY) - Dividend proposal to increase to EUR 1/shr (prev. 0.9/shr). Net sales will grow to 2-4% in FY 24/25. After the sale of the South American corn business, expect a one-off effect on earnings of EUR 100mln. (Newswires)

BROKER MOVES

CAC

Dassault Systemes (DSY FP) - Signs the AI pact to drive innovation and the ethical use of AI in Europe. (Newswires)

LVMH (MC FP) - Chairman and CEO of the Selective Retailing division, Chris De Lapuente, is to retire and will leave the group on Oct 31st. (Newswires)

OTHER FRENCH COMPANIES

JCDecaux (DEC FP) - Awarded greater Stockholm Public Transport advertising concessions for both bus shelters and subway stations; contract for 7 years. (Newswires)

Sodexo (SW FP) - Is reportedly considering acquiring Aramark (ARMK) although sources noted that a transaction is not guaranteed and talks have been on and off, according to Bloomberg. (Bloomberg)

Ubisoft (UBI FP) - Updates FY24-25 financial targets; Assassin's Creed shadows will now released on 14th February 2025 (postponement of 3 months) and now targets FY24-25 net bookings for Q2 to be around EUR 350-370mln (prev. guided EUR 500mln). (Newswires)

BROKER MOVES

PAN EUROPE

BBVA (BBVA SM) - CEO says European banks risk falling further behind if Governments block UniCredit deal with Commerzbank or its offer for Sabadell (SAB SM). BBVA is confident it will get approval from Spanish authorities for the Sabadell deal and sticks with the timeline of the merger by early 2025. (Newswires)

Chip Names - Micron shares surged almost 15% in extended trading after it beat on the top- and bottom-lines in Q4, and issued solid guidance. Full details in the US section.

Grifols (GRF SM) - CNMV initiates disciplinary proceedings against Grifols for breach of provisions of the regulation on market abuse in investment recommendations. Penalty does not exceed EUR 1mln and will not impact its financial statements. (Newswires)

Nexi (NEXI IM) - EIB provides EUR 220mln to Nexi for digital payment innovation. (Newswires)

BROKER MOVES

SMI

Roche (ROG SW) - Positive Phase III Results for Genentech’s Gazyva Show Superiority to Standard Therapy Alone in People With Lupus Nephritis. The REGENCY study met its primary endpoint, demonstrating statistically significant and clinically meaningful treatment benefits in people with active lupus nephritis. No new safety signals were identified. (Genentech)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

EQT (EQT SS) - The CEO plans to reverse some production curtailments in October and November. (Newswires)

Mowi (MOWI NO) - Plans to reduce costs by EUR 300-400mln over the next 5 years. (Newswires)

Nokia (NOKIA FH) - Joins the AI pact a new framework to prepare for the European Union's act. (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.19% at 5,722, NDX +0.14% at 19,973, DJIA -0.70% at 41,915, RUT -1.19% at 2,197.

SECTORS: Energy -1.9%, Health -0.94%, Financials -0.6%, Materials -0.6%, Industrials -0.46%, Real Estate -0.4%, Consumer Discretionary -0.38%, Communication Services -0.04%, Consumer Staples -0.03%, Technology +0.5%, Utilities +0.54%.

Jefferies (JEF) - Shares slipped by 1% afterhours following Q3 top- and bottom-line misses. JEF reported Q3 EPS of 0.75 (exp. 0.77), Q3 revenue of USD 1.684bln (exp. 1.71bln); is optimistic about the balance of this year and outlook for 2025. CEO said results reflected strong performance and continued momentum in Investment Banking, with particularly strong performance in Advisory. CEO is optimistic about the balance of this year and its outlook for 2025. Q3 Investment Banking net revenues +18.2% Q/Q at USD 949mln, and +47.3% Y/Y, driven by an increase in advisory activity attributable to market share gains reflecting the early benefits of the investments it has made in platform over the past few years, as well as improving market conditions. Investment Banking pipeline remains strong heading into year-end, and momentum across all its business lines continues. Q3 Capital Markets net revenues -3.0% Q/Q at USD 671mln, versus an exceptionally strong prior quarter; Capital Markets net revenues +28.1% Y/Y, driven by solid overall market conditions and strength across diversified Equities and Fixed Income businesses. Equities net revenues +42.3% Y/Y. Q3 Fixed Income net revenues +13.2% Y/Y, primarily reflecting strength across credit trading businesses. CEO said that while the market environment for certain Asset Management strategies proved challenging in Q3, FY results are encouraging.

Micron Technology (MU) - Shares surged almost 15% in extended trading after it beat on the top- and bottom-lines in Q4, and issued solid guidance. Micron reported Q4 adj. EPS of 1.18 (exp. 1.15), Q4 revenue of USD 7.75bln (exp. 7.67bln). CEO said demand from data centre customers continues to be strong, and inventory levels were healthy. Expects to achieve HBM market share commensurate with their overall DRAM market share by 2025. Expects healthier inventories at PC OEMs by spring 2025. Smartphone unit volumes are on track to grow in the low to mid-single-digit percentage range in 2024. Anticipates significant Y/Y growth driven by greenfield fab construction and HBM capex investments. It achieved record revenues in NAND and storage, and is entering FY25 with strong competitive positioning. Expects broadening demand drivers and substantial revenue growth with improved profitability. Projects FY25 DRAM cost reductions in the mid- to high-single-digit range, and NAND cost reductions in the low- to mid-teens percentage range. It upgraded its outlook for FY24 DRAM demand growth, now sees high-teens percentage, while NAND growth remains in the mid-teens. Expects both DRAM and NAND capacity in 2024 to be below 2022 peaks. Sees Q1 adj. EPS at 1.74 (exp. 1.52), and sees Q1 adj. revenue between USD 8.5bln-8.9bln (exp. 8.3bln).

McDonald's (MCD) - Raises quarterly cash dividend by 6% to USD 1.77/shr. (Newswires)

26 Sep 2024 - 06:55- Fixed IncomeGeopolitical- Source: Newsquawk