Newsquawk Daily European Equity Opening News - 5th March 2024

5th March 2024

ASIA

APAC stocks traded mixed as the region digested China's Work Report and Caixin Services PMI data. ASX 200 closed slightly lower as strength in mining and health care was offset by losses in the consumer sectors. Nikkei 225 initially retreated beneath the 40,000 level after the latest Tokyo CPI data showed an acceleration in price growth, but then gradually recovered its losses and returned to positive territory.Hang Seng and Shanghai Comp. were mixed with notable underperformance in the Hong Kong benchmark amid weakness in tech and health care, while the miss on Chinese Caixin Services PMI also provides a headwind for risk appetite. Conversely, the mainland just about remained afloat after the announcement of the government Work Report with the GDP growth target maintained at around 5%, as expected, although Premier Li noted the foundation of China's economic recovery is not solid yet and domestic demand is not strong.

EUROPEAN CLOSES

CLOSES: DAX: -0.03% at 17,710.45, FTSE 100: -0.55% at 7,640.33, CAC 40: +0.28% at 7,956.41, Euro Stoxx 50: +0.32% at 4,910.65, IBEX 35: +0.05% at 10,069.80, FTSE MIB: -0.07% at 32,912.34, SMI: -0.24% at 11,466.00.

SECTORS: IT 1.26%, Healthcare 0.59%, Industrials 0.11%, Financials 0.03%, Telecoms -0.19%, Utilities -0.21%, Materials -0.42%, Consumer Stpl -0.48%, Consumer Disc -0.76%, Energy -0.78%

FTSE 100

IAG (IAG LN) – Co’s British Airways will invest GBP 750mln over three years in improving its IT system as part of a GBP 7bln transformation plan, according to Bloomberg. (Newswires)

UK Retail Names - UK BRC Retail Sales YY (Feb) 1.0% (Prev. 1.4%); YY (Feb) 1.1% (Prev. 1.2%). Barclays says UK consumer spending in February rose 1.9% Y/Y and was dampened by wet weather, while it stated that consumer confidence about non-essential spending was the highest since November 2021. (Newswires)

UK Cos - Chancellor Hunt will announce within his budget on Wednesday the recovery loan scheme will be extended for an additional two years until 2026. (Sky News)

OTHER UK COMPANIES

BROKER MOVES

Rio Tinto (RIO LN) downgraded to Hold from Buy at Liberum

DAX

Bayer (BAYN GY) - Q4 (EUR): Revenue 11.9bln (exp. 11.7bln). Adj. EBITDA 3.02bln (exp. 2.25bln). Core EPS 1.85 (exp. 1.48); Sees 2024 Adj. EBITDA between 10.7-11.3bln (exp. 10.62bln). Structural changes remain an option but not for now. Crop Science records a significant decline in sales and earnings against a very strong prior year, mainly due to lower glyphosate prices. Pharmaceuticals register stable sales (Fx & portfolio adj.), and lower earnings. Consumer Health continues positive business performance. Outlook: decreased earnings, higher free cash flow expected. Index Weightings DAX 40 (2.7%), Euro Stoxx 50 (1%), Stoxx 600 (0.3%). Shares seen +1.9% in Lang & Schwarz premarket.

OTHER GERMAN COMPANIES

Stroeer (SAX GY) - FY23 (EUR): Adj. EBITDA 569mln (exp. 568mln), Revenue 1.91bln (exp. 1.91bln). Guides Q1 Organic Revenue "up to +15%." (Newswires)

BROKER MOVES

Rational (RAA GY) downgraded to Reduce from Hold at HSBC

Siemens (SIE GY) downgraded to Reduce from Hold at HSBC

CAC

Thales (HO FP) - Q4 (EUR) Revenue 5.57bln (exp. 5.33bln), Organic Revenue +8.8% (exp. +3.4%), EBIT Margin 11.6% (prev. 11% Y/Y), Dividend 3.40, +16% Y/Y. Guides initial FY24 Revenue 19.7-20.1bln (exp. 19.8bln), Organic Revenue +4-6% (exp. +6.5%), EBIT margin 11.7-12%. (Newswires)

Vivendi (VIV FP) – Vivendi’s Canal+ has raised its bid for South Africa’s MultiChoice Group to ZAR 125/shr (prev. ZAR 105/shr), valuing the business at some USD 2.9bln, according to Bloomberg (Bloomberg)

OTHER FRENCH COMPANIES

BROKER MOVES

Covivio (COV FP) upgraded to Buy from Hold at Jefferies

PAN EUROPE

Auto Names - Tesla (TSLA) closed lower by 7.2% whilst Nio (NIO), XPeng (XPEV) and Li Auto (LI) fell between 7-13% yesterday - desks cite Tesla's China shipments data yesterday falling to the lowest in over a year.

China-exposed Sectors - China targets 2024 GDP growth of "around 5%" as expected, according to the Official Work Report. China sees 2024 CPI at around 3% (exp. around 3%). China will continue to implement proactive fiscal policy and prudent monetary policy. China will move faster to foster a new development model for real estate. Click here for the full release. Separately, Chinese Caixin Services PMI (Feb) 52.5 vs Exp. 52.9 (Prev. 52.7); Composite PMI (Feb) 52.5 (Prev. 52.5). (Newswires)

BROKER MOVES

KBC (KBC BB) upgraded to Buy from Hold at Berenberg

SMI

Roche (ROG SW) - Unit Genentech Inc receives US FDA NDA supplement 6, 20 approval for Xofluza. (Newswires)

VAT (VACN SW) - FY23 (CHF): EBITDA 270.9mln (exp. 322mln, prev. 400.4mln Y/Y), Revenue 885.3mln (exp. 998mln). 2024 is expected to be a year of renewed market growth. Guides Q1 Revenue 185-205mln. (Newswires)

OTHER SWISS COMPANIES

Lindt & Spruengli AG (LISN SW) - FY23 (CHF): Net 671mln (exp. 646mln, prev. 570mln Y/Y), EBIT 813mln (exp. 804mln, prev. 745mln Y/Y), Revenue 5.2bln (exp. 5.189bln, prev. 4.97bln Y/Y). Affirms FY24 guidance. (Newswires)

SoftwareOne (SWON SW) - Co. took note of the dissolution of the agreement between the shareholder group and Bain Capital to pursue a public takeover offer. Co. said a purchase offer for the Co. in the near future is unlikely. (Newswires)

Sandoz (SDZ SW) - Colin Bond to retire as CFO on 30th June, replaced by Remco Steenbergen. (Newswires)

BROKER MOVES

Schindler Holding (SCHP SW) downgraded to Equal Weight from Overweight at Barclays

SCANDINAVIA

Novo Nordisk (NOVOB DC) - Eli Lilly (LLY) has come to agreements with the US-backed producer National Resilience alongside BSP Pharma. for the filling and finishing of weight-loss drug Zepbound, via FT citing sources. (FT)

BROKER MOVES

Alfa Laval (ALFA SS) downgraded to Hold from Buy at HSBC

Handelsbanken (SHBA SS) downgraded to Hold from Buy at SEB

Vestas Wind Systems (VWS DC) upgraded to Buy from Hold at HSBC

Wartsila (WRT1V FH) downgraded to Hold from Buy at HSBC

US

CLOSES: SPX -0.12% at 5,131, NDX -0.42% at 18,226, DJI -0.25% at 38,990, RUT -0.1% at 2,074.

SECTORS: Utilities +1.64%, Real Estate +1.07%, Materials +0.7%, Industrials +0.38%, Financials +0.23%, Technology +0.21%, Consumer Staples +0.11%, Health -0.13%, Energy -1.08%, Consumer Discretionary -1.27%, Communication Services -1.51%.

Advanced Micro Devices (AMD) - AMD faced a setback in selling an AI chip to China due to US export restrictions, Bloomberg reports. The chip, designed to meet regulations, didn't receive clearance. Officials deemed it too powerful, requiring a license. The report said it was unclear if AMD would apply for a license.

Apple (AAPL) - iPhone sales in China plunged 24% Y/Y in the first six weeks of 2024, according to Counterpoint Research cited by Bloomberg; Huawei Sales +64%; Total China smartphone sales -7%. (Newswires)

MicroStrategy (MSTR) - Shares slipped 1.5% after hours on news that it plans a USD 600mln convertible senior notes offering, targeting qualified institutional buyers. The notes, due 2030, aim to finance Bitcoin (BTC) acquisitions and serve general corporate needs.

Nvidia (NVDA) - Co. on China, says new density and performance export controls have Co. working on alternatives; China is interested in working with Nvidia as it has for decades - Morgan Stanley conference

05 Mar 2024 - 06:50- Research Sheet- Source: Newsquawk