Newsquawk Daily European Equity Opening News - 2nd May 2023

2nd May 2023

ASIA

APAC stocks traded with a slight positive bias as many of the regional participants returned to the market from the long weekend albeit with gains capped ahead of this week's upcoming risk events. ASX 200 was pressured after the RBA surprised markets with a 25bps rate increase, while the central bank's language remained hawkish with the Board expecting some further tightening of monetary policy will be needed. Nikkei 225 was indecisive and pulled back after briefly touching its highest level since January last year. Hang Seng initially surged on reopening from the holiday weekend and was led higher by strength in tech and casino stocks with the latter buoyed after a jump in Macau gaming revenue, although the index later faded most of its gains while the mainland remained shut for golden week.

FTSE 100

HSBC (HSBA LN) - Q1 2023 (USD): Pre-tax 12.9bln (exp. 8.6bln). Revenue 20.2bln (exp. 16.7bln). Co. announced a share buyback of up to USD 2bln. CET1 Ratio 14.7% (exp. 14.4%). NII 8.96bln (prev. 6.48bln Y/Y). Co. notes of a provisional gain of USD 1.5bln on the acquisition of Silicon Valley Bank UK Limited. Net Interest Income expectations are unchanged from FY guidance. The Board has approved a first interim dividend of USD 0.10 per share. CEO said the issues with banks are not a globally systemic one. (HSBA IR/Newswires) Shares rose over 3% in Hong Kong following the Q1 results.

Carnival (CCL LN) - Norwegian Cruise Line Holdings Ltd. (NCLH) - Q1 adj. EPS -0.30 (exp. -0.40), Q1 revenue USD 1.8bln (exp. 1.75bln). Sequential Occupancy rose to approximately 101.5% in Q1, exceeding guidance of 100%. Total revenue per Passenger Cruise Day +17.5% Y/Y, and +18.3% Y/Y in constant currency. Expects FY23 occupancy to average 103.5%. Q2 adj. EPS seen at 0.25 (exp. 0.28); Q2 adj. net cruise cost ex-fuel per capacity day seen at USD 159, while Q2 capacity days seen at 5.5mln, and occupancy of 105%. Sees FY23 adj. EPS 0.75 (exp. 0.75), and sees adj. net cruise cost ex-fuel per capacity day USD 150. Capacity days seen at 22.75mln, while occupancy seen at 103.5%; Adj. EBITDA still expected between USD 1.8-1.95bln. (Globenewswire)

Flutter (FLTR LN) - Gambling charities have pushed back at the CEO's concern that funds from the new gambling levy could be used by group's which are "campaigning to stop gambling". (FT)

Glencore Plc (GLEN LN) - Canadian PM Trudeau said Teck Resources was a great company that is important to Canada’s economy, and any takeover bid for the miner will have to get through a "rigorous process" to win government approval, Bloomberg reports. Trudeau added that Teck's fight with Glencore is something that is being looked at carefully. Teck has been trying to fend off an approach from Glencore, but suffered a setback when it could not get enough shareholder support for its own plan to separate its metals and coal divisions. (Newswires)

GlaxoSmithKline (GSK LN) - US Attorney’s Office for the Western District of Virginia has subpoenaed the Co. for documents relating to its electronic health record programs, amid an investigation into alleged fraud within the records market. (Times)

Shell (SHEL LN)/BP (BP. LN) - Shell has agreed to sell its 27% stake in the Browse natgas project to BP, the deal will increase BP’s stake in the project to 44%. (Newswires)

OTHER UK COMPANIES

Capita (CPI LN) - Deliveroo (ROO LN) was forced to abandon a GBP 18mln deal with the Co. after five months due to their failure to deliver the 150 multilingual staff requested for a new Poland support centre, via The Times citing sources. (Times)

BROKER MOVES

Rightmove (RMV LN) upgraded to Buy from Hold at HSBC

DAX

Adidas AG (ADS GY) - Adidas plans to boost sales in the US, WSJ reports. Its North America president said Adidas wants to "double down on all of the things that are US-centric, particularly around sport," and had recently spent hundreds of millions of dollars on a newly opened facility in LA and on upgrades to its main US hub in Portland. It also plans to open more US stores and forge new partnerships with athletes, recently renewing a longtime partnership with Major League Soccer. Elsewhere, Adidas is being sued by investors who are claiming that the Co. was aware of Kanye West's behaviour years before it resulted in the conclusion of their partnership. (WSJ/BBC)

Deutsche Bank (DBK GY) - Investment Bank CEO Campelli says they are planning to increase the size of their investment bank advisory team, after hiring 26 MDs over the past two-months. (FT)

Mercedes-Benz (MBG GY) - CEO Kallenius said it would be "unthinkable for almost all German industry" to cut ties with China, adding this would be impossible and not desirable. (FT)

OTHER GERMAN COMPANIES

BioNTech (22UA GY) - A proposed deal between BioNTech/Pfizer and the EU for about 70mn Covid-19 shots a year until 2026 threatens to push rivals Moderna (MRNA), Novavax (NVAX), and Sanofi (SNY) out of the market, risking the regional prevention of Covid-19 being left to just one product, FT reports. The EU is now negotiating an amended deal with Pfizer despite the European public prosecutor opening a criminal investigation into their original agreement, FT says, adding that the fresh proposal includes a new provision for member states to pay half price (about EUR 10) for each cancelled dose; the newer contract would also allow the EU to upgrade to newer vaccines tailored to any future variants. (FT)

Deutsche Lufthansa (LHA GY) - An executive said the Co. is targeting 2023 capacity of around 85-90% of pre-COVID levels, according to reports.

Software AG (SOW GY) - Bain Capital has built a stake in Software AG raising the prospect of a takeover battle for the German company, Bloomberg reports. Bain seeks talks with Software AG to discuss a potential combination with Bain portfolio company Rocket Software. Silver Lake Management has agreed to acquire Software AG for EUR 30/shr in cash, and shares have recently been trading above the offer price as investors bet on the possibility of a higher bid or counteroffer. Bloomberg says that any counter-bidder would likely have to offer more than Silver Lake, and pitch the combination as a better strategic fit, while any challenge could become harder after Silver Lake announced moves on Friday to solidify its head start in the potential takeover battle. (Newswires)

BROKER MOVES

CAC

Airbus (AIR FP) - Air Lease (AL) CEO says they remain cautious in their bigger picture outlook from both Airbus and Boeing (BA) for 2023 and 2024 deliveries, adds they expect delays to persist for several years. (Newswires)

TotalEnergies (TTE FP) - CEO has complained to investors that the valuation gap between itself and US rivals is not because of profitability, but is a function of its European listing. (FT) Elsewhere, UAE’s Adnoc Gas has agreed to supply TotalEnergies with LNG as part of a three-year agreement until 2025; Adnoc said the value is expected between USD 1-1.2bln. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

PAN EUROPE

Chip Names - SoftBank-owned chipmaker Arm Ltd has filed for a US listing, setting the stage for this year's largest IPO, Reuters reports; seeks to raise between USD 8-10bln, sources said, although Arm officially said the size and price range for the offering had not yet been determined. Softbank is pushing forward with the IPO despite adverse market conditions, with US IPOs down about 22% year-to-date, amid stock market volatility and economic uncertainty. (Newswires) Separately, NXP Semiconductors (NXPI) rose 4.7% after earnings and guidance beat expectations.

Consumer Staples - Europeans are less willing to pay higher prices for consumer goods vs US counterparts, FT reports citing industry executives, analysts and economists. Sales volumes in Europe were weaker than in the US, and consumer goods manufacturers have put up prices globally to offset historic increases in raw material costs. Weaker household finances in Europe and a more developed "private label" market have made it harder for companies to charge more without sacrificing volume. (FT)

DSM (DSM NA) - Q1 (EUR): Sales 1.89bln (exp. 2.033bln), adj. EBITDA 278mln (exp. 280mln). Anticipate a strong H2 across all businesses. Do not see a significant improvement in high global inflation or low vitamin prices in Q2. (Newswires)

Renewable Names - Some EU member states have expressed concern that the proposed EU law to re-wild habitats could hinder the construction of renewable projects. (FT)

Repsol (REP SM) - Co. is to acquire from Sinopec the 49% interest in shares of RSRUK for USD 2.1bln, becoming 100% owner; will have no significant impact on earnings as Repsol made a provision in its accounts for the arbitration. (Newswires)

BROKER MOVES

Erste Group (EBS AV) reiterated with Overweight at JPMorgan Chase

SMI

Geberit (GEBN SW) - Q1 (CHF): Revenue 893mln (exp. 911mln), EBITDA 296mln (exp. 274mln), EBIT 258mln (exp. 229mln), Net Income 215mln (exp. 190mln). FY23 forecasts have not significantly changed since the FY22 announcement in March. A challenging environment is expected for the construction industry in 2023 as a whole. (Newswires)

UBS (UBSG SW) - Saudi National Bank will hold a 0.5% stake in UBS once the Credit Suisse-UBS merger completes. (Newswires) Reminder, prior to the merger being agreed Saudi National Bank had a 9.88% stake in Credit Suisse.

OTHER SWISS COMPANIES

ams Osram (AMS SW) - Q1 (EUR): Revenue 927mln (exp. 989mln), adj. EPS 0.02 (exp. -0.04), adj. EBIT 50mln (exp. 55mln), adj. Net Income 6mln (exp. 2mln). Results in-line with guidance, reflecting a difficult market environment. Q2 guidance: Revenue 0.8-0.9bln (exp. 1.0bln), including QQ disposal related de-consolidation effects. Ahead, sees continued subdued demand trends. (Newswires)

BROKER MOVES

SGS (SGSN SW) initiated with Outperform at Credit Suisse

SCANDINAVIA

Electrolux AB (ELUXB SS) - China's Midea Group is exploring a potential acquisition of Electrolux despite potential political opposition, Bloomberg reports. Electrolux has so far not been receptive to the proposal, the report said. Midea only wants a friendly deal. Bloomberg says that other Asian appliance makers, including Samsung Electronics Co., have also looked at Electrolux. (Newswires)

BROKER MOVES

Stora Enso (STERV FH) upgraded to Overweight from Neutral at JPMorgan Chase

UPM-Kymmene (UPM FH) upgraded to Overweight from Underweight at JPMorgan Chase

US

CLOSES: SPX -0.04% at 4,167, NDX -0.11% at 13,231, DJIA -0.14% at 34,051, RUT +0.01% at 1,769.

SECTORS: Energy -1.26%, Consumer Discretionary -1.06%, Real Estate -0.92%, Financials -0.27%, Communication Services -0.07%, Materials -0.04%, Consumer Staples +0.09%, Technology +0.18%, Utilities +0.21%, Industrials +0.55%, Health +0.59%.

First Republic Bank (FRC)/ JPMorgan Chase (JPM) - FDIC and California regulators announced that they were to close First Republic Bank and sell-off its USD 93.5bln of deposits and most assets to JPMorgan. (Newswires)

IBM (IBM) - CEO said the Co. is to pause hiring for jobs AI could do and roughly 7,800 IBM jobs could be replaced by AI in the coming years, according to Bloomberg. (Newswires)

NXP Semiconductors NV (NXPI) - Q1 2023 (USD): Adj. EPS 3.19 (exp. 3.02), Revenue 3.12bln (exp. 3.00bln). Adjusted gross margin 58.2% (exp. 58%). Adjusted free cash flow USD 381mln (exp. 649.6mln). Sees Q2 EPS 3.07-3.49 (exp. 2.92). Sees Q2 revenue USD 3.10-3.30bln (exp. 3.03bln). (Newswires) Shares rose 4.7% after-market

Meta (META) - Co. launched a USD 8.5bln five-part (5yr, 7yr, 10yr, 30yr, 40yr) Dollar bond offering (initial reports suggested a smaller USD 7bln). (Newswires)

Tesla (TSLA) - Co. raise prices of some models in the US and China by around USD 200-250, according to reports. (Newswires)

02 May 2023 - 06:48- Research Sheet- Source: Newsquawk