Newsquawk Daily European Equity Opening News - 29th March 2023

29th March 2023

ASIA

Asia-Pac stocks were mostly positive albeit with most of the major indices rangebound following the uninspired lead from Wall St amid a lack of fresh macro drivers and heading into quarter-end, while Hong Kong markets significantly outperformed as tech stocks surge on Alibaba’s plan for a six-way split. ASX 200 (+0.2%) was kept afloat by strength in the commodity-related sectors and after softer-than-expected CPI data supported the case for the RBA to pause at next week’s meeting, although gains were limited by weakness in the top-weighted financial industry. Nikkei 225 (+0.7%) traded higher after Japan’s parliament passed a record JPY 114tln budget for FY23 and with policy makers also said to consider lowering mortgage rates for families with children. Hang Seng (+2.1%) and Shanghai Comp. (Flat) were varied with Alibaba front running the advances in Hong Kong as its plan for a split is seen to unlock value for shareholders and has spurred some speculation that its large tech peers could follow suit, while the mainland lagged despite the PBoC’s liquidity injection as frictions lingered regarding Taiwan President Tsai’s planned transit through the US and after the Biden administration added five Chinese companies to the entity list for allegedly aiding China's repression of Uyghurs.

BYD Company (1211 HK) - Chairman says Q1 sales will be 80% better than last year, adds price war caused by demand-supply imbalance will eliminate many weak companies. (Newswires)

EUROPEAN CLOSES

CLOSES: EURO STOXX 50 +0.09% at 4,168, FTSE 100 +0.17% at 7,484, DAX 40 +0.09% at 15,142, CAC 40 +0.14% at 7,088, FTSE MIB +0.47% at 26,329, IBEX 35 +0.43% at 8,944, SMI +0.45% at 10,835.

SECTORS: Energy 2.05%, Materials 0.56%, Industrials 0.24%, Financials 0.20%, Consumer Disc 0.12%, Utilities 0.11%, Consumer Stpl -0.21%, Telecoms -0.26%, Healthcare -0.30%, IT -1.92%

FTSE 100

OTHER UK COMPANIES

BROKER MOVES

Tesco (TSCO LN) upgraded to Overweight from Equal Weight at Morgan Stanley

DAX

Deutsche Bank (DBK GY) - On March 24th, Co. published a release announcing its decision to redeem its Fixed to Fixed Reset Rate Subordinated Tier 2 Notes due 2028, this has now been incorporated by reference into Deutsche Bank's Registration Statement on Form F-3. (Deutsche Bank)

Infineon (IFX GY) - Infineon raises its Q2 revenue guidance to "above EUR 4bln" (prev. "around EUR 3.9bln"). Segment Result Margin is now expected to reach a high-twenties percentage (prev. "around 25 percent"). Infineon now forecasts revenue for the full 2023 fiscal year to amount to "meaningfully above the previously expected level" of around EUR 15.5bln. The guidance upgrades were "primarily based on resilient business dynamics in its core automotive and industrial segments." (Infineon) Co. holds ~3.4% weighting in the DAX 40.

Mercedes-Benz Group (MBG GY) - Co's third largest holder, Kuwait's sovereign wealth fund, is reportedly looking to sell 20mln shares at a price guidance of EUR 69.27/shr (vs EUR 71.89 close on Tuesday), according to bookrunners cited by Reuters. This would take Kuwait Investment Authority's (KIA) stake to under 5% from the current 6.84%. Mercedes-Benz, in an email response, said "The KIA is committed to continuing the successful partnership with Mercedes-Benz and will remain a key shareholder." (Newswires) Co. holds ~4.2% weighting in the DAX 40.

OTHER GERMAN COMPANIES

Aroundtown (AT1 GY) - FY 2022 (EUR): Net rental income 1.2bln (prev. 1.1bln). FFO per share 0.33 (prev. 0.30). Net loss of EUR 457mln "as result of property devaluations and impairment of goodwill", reflecting a loss per share of 0.58. Co. is suspending its 2022 dividend payout following increasing uncertainties in markets. Co. said guidance for FY 2022 has been achieved. (Aroundtown IR)

BROKER MOVES

CAC

OTHER FRENCH COMPANIES

BROKER MOVES

PAN EUROPE

Chip Names - Micron (MU) shares rose 1.2% post-earnings, but noted it expects profitability to remain extremely challenged in the near-term and said profitability levels in the industry are currently not sustainable. Refer to the US section for the full earnings. Elsewhere, Infineon (IFX GY) raised its guidance due to "resilient business dynamics in its core automotive and industrial segments."

BROKER MOVES

ASM International (ASM NA) upgraded to Equal Weight from Underweight at Morgan Stanley

ArcelorMittal (MT NA) upgraded to Buy from Sell at UBS

SMI

Credit Suisse (CSGN SW) - Bankers and clients are reportedly being courted by Swiss rivals, according to the FT. (FT)

Nestle (NESN SW) - Nestle has proposed to acquire BRF's pet food division for approximately BRL 1.7bln (USD 330mln), a value marginally lower than the BRL 2bln BRF is targeting for the asset, according to Bloomberg sources. (Newswires)

UBS (UBSG SW) - Board appoints Swiss Re (SREN SW) chairman Sergio Ermotti as the new group CEO effective April 5th 2023. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

UBS (UBSG SW) downgraded to Sector Perform from Outperform at RBC

SCANDINAVIA

Volvo Car (VOLCARB SS) - CEO told Bloomberg that the US Inflation Reduction Act was changing the way it plans to build electric vehicles, it's changing is its supply base, especially on batteries and probably on minerals as well, and added that it was driving more and more of that technology into North America. (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.16% at 3,971, NDX -0.49% at 12,610, DJIA -0.12% at 32,394, RUT -0.06% at 1,752.

SECTORS: Communication Services -1.02%, Health -0.57%, Technology -0.46%, Real Estate -0.27%, Consumer Discretionary -0.11%, Financials -0.05%, Consumer Staples +0.22%, Utilities +0.29%, Materials +0.48%, Industrials +0.54%, Energy +1.46%.

Amazon (AMZN)/ AMC (AMC) - FBN's Gasparino said Fox has confirmed Amazon has long considered a possible purchase of AMC, but has not pulled the trigger; its interest remains but more as buying a distressed asset, he is told there is no deal on the table and there may never be. (Fox Business)

First Republic (FRC) - Co. is reportedly not for sale, according to FBN's Gasparino citing sources, notes just four of its 270 brokers have resigned; others are seeking employment but may stay as the situation sorts itself out. (Fox Business)

Micron (MU) - Q2 adj. EPS -1.91 (exp. -0.86); it made inventory write-downs of USD 1.43bln in the quarter, which had an impact of USD 1.34/shr. Q2 revenue USD 3.69bln (exp. 3.702bln), Q2 adj. gross margin -31.4% (exp. 8.09%), Q2 operating loss of USD 2.08bln (exp. loss of USD 676mln). Ahead, it sees Q3 adj. EPS USD between -1.51 and -1.65 (exp. -0.90), and sees Q3 revenue around USD 3.7bln (exp. 3.7bln); its Q3 2023 guidance assumes a write down of about USD 500mln associated with inventory produced during the quarter. Exec said that the 'days of inventory' peaked in Q2, and it remains confident on long-term demand levels, and believes that the company is close to a shift in sequential revenue growth. Has made additional reductions to fiscal 2023 capex plan, now expects to invest around USD 7bln. Now expects 2023 bit supply growth to be meaningfully negative for DRAM, and 2023 industry bit demand growth is likely to have moderated to about 5% in DRAM, and low teens percentage range in NAND. Elsewhere, exec said data centre revenue bottomed in Q2, and it sees 2023 PC units declining in mid-single digits, and smartphone shipments seen slightly down in 2023. Micron expects profitability to remain extremely challenged in the near-term and said profitability levels in the industry are currently not sustainable. (GlobeNewswire/Newswires) *Shares rose 1.2% after market.**

Tesla (TSLA) - Co. is on pace for a record quarter for deliveries, led by solid performance in the US, China and Norway, according to Electrek. (Electrek)

29 Mar 2023 - 06:47- Research Sheet- Source: Newsquawk