Newsquawk Daily European Equity Opening News - 29th January 2024

29th January 2024

ASIA

APAC stocks began the week mostly on the front foot heading closer to month-end albeit with some of the gains capped by heightened geopolitical tensions in the Middle East and Chinese property sector concerns. ASX 200 finished marginally higher with the index led by the energy sector after the recent upside in oil prices. Nikkei 225 climbed above the 36,000 level with the help of Japanese automakers amid currency effects. Hang Seng and Shanghai Comp were initially lifted after China's latest measures to stabilise stocks including the suspension of restricted shares lending, although gains were capped after a Hong Kong court ordered China Evergrande to be wound up which saw shares in the world's most indebted developer drop by as much as 21% before trading in the Co. and its affiliates were halted.

Evergrande (3333 HK) - And creditors couldn't agree on a restructuring plan and talks have broken down, while creditors are to support a liquidation plan at today's hearing, according to WSJ. CEO says the group's operation is facing huge difficulties, resources are limited and the preliminary voting of creditors has not met expectations, according to local media. Says: Offshore liquidation order for Hong Kong-listed China Evergrande Group will not affect the operation of other onshore and offshore units. (WSJ/Newswires)

Toyota (7203 JT) - Notes certification irregularities at Toyota Industries (6201 JT) and will suspend shipments of affected engines with Toyota to also suspend shipments of vehicles with affected engines which include HiAce, Hilux and Land Cruiser models. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX +0.32% at 16,961.39, FTSE 100 +1.40% at 7,635.09, CAC 40 +2.28% at 7,634.14, Euro Stoxx 50 +1.16% at 4,635.35, IBEX 35 +0.20% at 9,936.60, FTSE MIB +0.73% at 30,379.33, SMI +1.61% at 11,389.10.

SECTORS: Consumer Disc 4.12%, Consumer Stpl 2.10%, Energy 1.36%, Healthcare 1.33%, Materials 1.12%, Financials 0.73%, Industrials 0.49%, Telecoms 0.45%, Utilities -0.81%, IT -1.07%

FTSE 100

BT (BT/A LN) - The first trial within English courts from a number of class action suits begins on Monday, alleging that BT overcharged around 3mln landline customers and is now subject to a GBP 1.3bln claim. The case is expected to last for eight weeks. (FT)

BP (BP/ LN) - Faces activist investor pressure from Bluebell Capital to ditch its clean energy pledge, according to FT; letter was reportedly sent in October, labelling the pledge to reduce production vs 2019 levels by 25% as "irrational". (FT)

GSK (GSK LN) - Expected, this week, to receive ‘blockbuster’ status for its RSV vaccine. Sales figures are to be unveiled alongside results on January 31st. (FT)

NatWest Group (NWG) - UK Chancellor Hunt is preparing for a multibillion-pound public share sale of NatWest as early as June, The Times reports. Hunt aims to encourage public participation in share ownership. Sentiment is being gauged via market research, with tenders for public relations and advertising agencies issued, the report adds. Shares are expected to be sold at a discount to make them more attractive, according to City AM. (Times/City AM)

Shell (SHEL LN) - Is to shut 208k BPD crude units and 49k BPD FCC as part of planned maintenance at the Pernis oil refinery in late January. (Newswires)

Tobacco/Vaping Names – The UK is to ban disposable vapes as part of plans to combat the rising number of those 11-17 years old vaping. Once implemented, retailers will have six months to implement changes. Currently unclear when the ban/bill will be introduced, PM Sunak to provide more details on Monday. (BBC)

OTHER UK COMPANIES

ITV (ITV LN) - Channel 4 is to announce over 200 job cuts on Monday as part of cost-cutting efforts. (FT)

Superdry (SDRY LN) - Considering restructuring that could result in nearly 100 job losses, according to Reuters. (Reuters)

THG (THG LN) - Co. plans to lay off 160 staff, including 60 marketing staff and 100 warehouse rolls, via the Times. (Times)

BROKER MOVES

DAX

Bayer (BAYN GY) - Ordered to pay USD 2.25bln to a Pennsylvania man as part of an individual suit over cancer which was allegedly caused by the Roundup weedkiller, via DW. (DW) Shares seen -3% in pre-market trade.

OTHER GERMAN COMPANIES

Scout24 (G24 GY) - To buy back EUR 100mln shares. (Newswires)

Stabilus (STM GY) – Q1 (EUR): Net 12.2mln (prev. 15.5mln Y/Y), Adj. EBIT 33.3mln (prev. 32.6mln Y/Y), Revenue 305.4mln (prev. 290.7mln Y/Y). Confirms FY24 guidance: Revenue 1.4-1.5bln.(Newswires)

Wacker Chemie (WCH GY) - FY23 (EUR): EBITDA 824mln (prev. 2.08bln Y/Y), Revenue 6.40bln (prev. 8.21bln Y/Y), EBIT margin 5% (prev. 21% Y/Y). (Newswires)

BROKER MOVES

CAC

Alstom (ALO FP) - HS2 is looking into changing the specification of trains for the line in order to prevent a drop in passenger capacity given previously announced changes to the route, via FT citing an internal document; the removal of first-class seats is reportedly being considered. (FT)

Airbus (AIR FP), Boeing (BA), United Airlines (UAL) - Airbus has approached leasing firms and airlines, exploring the possibility of repurchasing A321neo slots, to present an enticing offer to United Airlines and challenge Boeing's position, Bloomberg reports. United is considering options due to delays in Boeing's 737 Max 10, and may potentially reconsider its order. Winning over United, one of the world's largest airlines, would be a significant victory for Airbus, though complexities and uncertainties would exist in any switch. Additionally, reports that the United Airlines CEO travelled to discuss a potential Airbus A321neo deal given the Boeing delays, via Reuters citing sources; talks also covered the future of stalled A350 deliveries. (Newswires)

LVMH (MC FP) - LVMH is in talks to acquire 745 Fifth Ave. in Manhattan, Bloomberg reports. The luxury conglomerate is competing against other bidders for the property housing a Bergdorf Goodman men’s store. BBG adds that luxury retailers, including Kering (KER FP) and Prada (1913 HK), are intensifying competition for prime spots on Fifth Avenue, and LVMH itself had a record year for property acquisitions in 2023. (Bloomberg)

OTHER FRENCH COMPANIES

Eutelsat (ETL FP) - Trading Update (EUR): Cuts FY23/24 Adj. EBITDA 650-680mln (prev. guidance 725-825mln), Revenue 1.25-1.30bln (prev. guidance 1.32-1.42bln). Results of Leo activities with OneWeb, while progressing well, are running behind schedule relative to original roadmap which reflects delays in ground network and a revenue mix more oriented than expected towards sales of user terminals, hitting margins. (Newswires)

BROKER MOVES

PAN EUROPE

ArcelorMittal (MT NA) - Italian Steel Body Chief says Italy should emulate France/Germany via funding the green transition of the ArcelorMittal plant in order to prevent a closure and knock-on impact on other areas of the economy. (FT)

Ryanair (RYA ID) - Q3 (EUR): Revenue 2.7bln (exp. 2.72bln), RevPAR +9%, average fare +13%, ancillary revenue +2%. Fuel bill 1.2bln, +320mln. Sees weaker than expected load factors/yields in late-Q3/early-Q4.Close-in Christmas/New Year loads & yields were softer than previously expected given the sudden, but welcome, removal of flights from online agents. Narrowing FY24 PAT guidance to 1.85-1.95bln (prev. guided 1.85-2.05bln). Run extra checks on recent Boeing (BA) 737 deliveries, and noted quality improvements with fewer delivery defects. CFO: Might not see the first Boeing Max 10 fly in 2024, but perhaps in Q1-2025. United's (UAL) remarks on the Max 10 were unhelpful, if they won't take the Max 10's then Ryanair will. No issues with pilot staffing. CEO: Number of travel agents have approached for new deals. Look forward to the summer with some degree of optimism. 2026/2027 before Europe returns to pre-COVID short-haul capacity. (Newswires)

Philips (PHIA NA) - Q4 (EUR): Revenue 5.06bln (exp. 5.3bln). Proposes dividend remains at 0.85/shr. 2024 Guidance: FCF 0.8-1.0bln, only excludes the remaining cash-out related to the previously announced resolution of the economic class action within the US. Expects around 100bp of costs related to remediation activities and disgorgement payments for Respironics sales within the US. Elsewhere, Co. halts the sale of sleep apnea devices in USA after a FDA deal, via Bloomberg (Newswires)

BROKER MOVES

SMI

Julius Baer (BAER SW) - Co. is to write off around USD 463mln related to its exposure to bankrupt Signa, via SonntagsZeitung. (Newswires)

Holcim (HOLN SW) - Announces planned separation of its NA unit via US listed, expected to be completed in H1'25. (Newswires) Note: Could be valued at USD 30bln, via WSJ. (WSJ)

OTHER SWISS COMPANIES

BROKER MOVES

Swissquote (SQN SW) downgraded to Hold from Buy at Kepler

SCANDINAVIA

Novo Nordisk (NOVOB DC), Eli Lilly (LLY) - North Carolina state employees will from April 1st no longer have insurance coverage for expensive weight-loss medications like Novo Nordisk's Wegovy and Eli Lilly's Zepbound, NYT reports. The cost of these drugs to North Carolina's State Health Plan last year amounted to USD 100mln, or around 10% of its prescription drug spending, prompting the decision. (NYT)

BROKER MOVES

US

CLOSES: SPX -0.07% at 4,891, NDX -0.55% at 17,421, DJI +0.16% at 38,109, RUT +0.12% at 1,978.

SECTORS: Energy +0.76%, Health +0.59%, Consumer Discretionary +0.55%, Consumer Staples +0.54%, Communication Services +0.41%, Utilities +0.33%, Financials +0.3%, Materials -0.01%, Industrials -0.14%, Real Estate -0.37%, Technology -1.05%.

Banker Bonuses - Banker bonus levels on Wall Street have disappointing this season due to lacklustre deal activity, with some receiving flat or reduced payouts compared to the previous year, WSJ writes. Investment banking bonuses have dropped by as much as 25%, continuing the trend from the already underwhelming bonus season a year ago. (WSJ)

Dyne Therapeutics (DYN) - Reportedly weighs options after takeover interest, according to Bloomberg. (Bloomberg)

29 Jan 2024 - 07:00- EnergyResearch Sheet- Source: Newsquawk