Newsquawk Daily European Equity Opening News - 9th August 2023

9th August 2023

ASIA

Asia-Pac stocks traded mixed as participants digested a deluge of earnings releases and the latest inflation data from China which was mixed but still showed consumer prices in deflationary territory for the first time in more than two years. ASX 200 (+0.2%) was just about kept afloat by the outperformance in its top-weighted financial sector after Australia’s largest lender CBA posted a record FY profit. Nikkei 225 (-0.3%) ultimately weakened with trade initially indecisive amid an influx of earnings releases and with the biggest winners and losers all driven by corporate results including SoftBank which was near the bottom end of the spectrum after its surprise loss. Hang Seng (-0.1%) and Shanghai Comp. (-0.4%) were subdued as markets reflected on the mixed inflation data from China which showed CPI Y/Y slipped into deflation territory, albeit at a narrower-than-expected drop in prices and M/M consumer prices unexpectedly increased, while China’s factory gate prices continued to fall at a steeper than forecast pace.

Cathay Pacific Airways (293 HK) - H1 (HKD): Profit attributable 4.3bln (prev. -5.0bln Y/Y), rev. 43.6bln (prev. 18.6bln Y/Y), Co. plans to buy back 50% of preference shares by year-end for over HKD 9.75bln and remainder of preference shares by end-July 2024. (Newswires)

CBA (CBA AT) - Co. FY23 (AUD) net 10.2bln (prev. 9.6bln Y/Y), Co. announces final dividend of AUD 2.40/shr and intends to conduct a further AUD 1bln on-market share buyback, while it said it is well-provisioned for the changing financial conditions but noted it is seeing consumer demand moderate and economic growth slow. Co. continues to target FY dividend payout ratio of 70%-80% of cash NPAT and expects margin headwinds next FY to be partly offset by the benefit of higher average cash rates. (Newswires)

Suncorp (SUN AT) - Co. FY23 (AUD) net profit attributable 1.15bln (prev. 681mln Y/Y), cash profit 1.25bln (prev. 673mln Y/Y), rev. 18.4bln (prev. 16.2bln Y/Y), Co. noted the operating environment remains challenging and noted Suncorp Bank sale is now expected by the middle of the 2024 calendar year. (Newswires)

EUROPEAN CLOSES

Bourses: DAX -1.10% at 15,775, FTSE 100 -0.36% at 7,527, CAC 40 -0.69% at 7,269, Euro Stoxx 50 -1.11% at 4,289, IBEX 35 -0.61% at 9,302, FTSE MIB -2.12% at 27,942, SMI -0.50% at 11,051.

Sectors: Healthcare 3.33%, Industrials 0.76%, Utilities 0.49%, Consumer Stpl -0.06%, Energy -0.35%, Telecoms -0.49%, Consumer Disc -1.06%, Materials -1.10%, IT -1.26%, Financials -1.70%

FTSE 100

Severn Trent (SVT LN) - Faces first UK class action suit over sewage pollution where the Co. underreported instances where it pumped sewage into open water. (Newswires)

Vodafone (VOD LN) - South Africa regulator recommends blocking Vodacom fibre purchase. (Newswires)

OTHER UK COMPANIES

IWG (IWG LN) - Co. is assessing a departure from the London Stock Exchange and potentially move its listing to New York, according to the founder. (The Times)

BROKER MOVES

abdrn (ABDN LN) reiterated with Underperform at Credit Suisse

DAX

E.ON (EOAN GY) – Q2 (EUR): Revenue 18.2bln (prev. 23.3bln Y/Y). Adj. EBITDA 2.95bln (prev. 1.97bln). Adj. Net 1.94bln (prev. 815mln). Co. raises FY23 guidance. “Declining prices on wholesale markets will be systematically passed on to customers; as announced, additional power and gas price reductions for millions of customers will come in late summer”. (E.ON)

OTHER GERMAN COMPANIES

Delivery Hero (DHER GY) - Q2 (EUR): Revenue 2.58bln (exp. 2.53bln). Raises FY23 total segment Revenue, +15% YY (prev. +10% YY). (Newswires)

Brenntag (BNR GY) – Q2 (EUR): Revenue 4.26bln (exp. 4.64bln). Operating EBITDA 332mln (exp. 327mln). EPS 1.23 (prev. 1.86 Y/Y). Co. cuts midpoint of FY23 operating EBITDA guidance. “There was a very positive trend in business in the focus industries Pharma and Water Treatment. However, this was not enough to fully offset the subdued demand in other focus industries, where customers ran down inventories that had been built up previously and waited for prices to fall.” (Brenntag)

Hannover Re (HNR1 GY) - H1 (EUR): Net 960mln (prev. 814.9mln YY), EBIT 1.4bln (prev. 1.1bln YY), GWP 12.27bln (prev. 11.82bln YY). (Newswires)

BROKER MOVES

BMW (BMW GY) downgraded to Sell from Neutral at Citi

Fraport (FRA GY) reiterated with Neutral at JPMorgan Chase

Fresenius SE (FRE GY) upgraded to Buy from Hold at Deutsche Bank

Mercedes-Benz (MBG GY) downgraded to Neutral from Buy at Citi

Porsche AG (P911 GY) downgraded to Neutral from Buy at Citi

Siemens Energy (SIE GY) downgraded to Neutral from Overweight at JPMorgan Chase

Volkswagen (VOW3 GY) upgraded to Buy from Neutral at Citi

CAC

OTHER FRENCH COMPANIES

BROKER MOVES

Renault (RNO FP) upgraded to Buy from Neutral at Citi

PAN EUROPE

ABN AMRO (ABN NA) - Q2 2023 (EUR): Net 870mln (exp. 576.3mln). Loan-loss recovery 69mln (exp. provision 96.4mln). Sees FY costs around 5.2bln (prev. saw around 5.3bln). NII 1.62bln (exp. 1.64bln Y/Y). Interim dividend set at EUR 0.62 per share. COMMENTARY Credit quality remains solid, with impairment releases of EUR 69 million; buffers remain in place. Continued strong NII, benefitting from the higher interest rate environment. All client units contributed with improved net profit. (ABN AMRO)

Italian Banks - The Italian government has acted to limit the impact of the surprise windfall tax on banks whereby the levy on banks’ net interest income will be capped at 0.1% of risk-weighted assets, which is a fifth of the level analysts had suggested the levy could reach, according to The Times. (The Times)

Stellantis (STLAM IM/STLAP FP) - UAW union says Stellantis (STLA IM), Chrysler parent, is seeking concessions in bargaining talks including cuts to medical coverage. Says Co. opposes an end to two-tier wages, a practice of newer workers getting paid much less than veteran workers. UAW is selling more than 40% pay rises over four years, significant additional time off, and a restoration of defined benefit pensions previously eliminated for newer workers. (Newswires)

Telecom Italia (TIT IM) - Italy and KKR (KKR) are discussing MoU for government to co-invest alongside US fund in Telecom Italia's fixed-line grid, according to Reuters sources. (Reuters)

Voestalpine (VOE AT) - Q1 (EUR): EBIT 316mln (prev. 693mln YY), EBITDA 505mln (prev. 879mln YY), Revenue 4.40bln (prev. 4.47bln YY). (Newswires)

BROKER MOVES

Verbund (VER AT) downgraded to Underweight from Equal Weight at Morgan Stanley

SMI

Novartis (NOVN SW) - Remibrutinib Phase III trials met their primary endpoints and showed rapid symptom control in chronic spontaneous urticaria. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

Dufry (DUFN SW) reiterated with Overweight at JPMorgan Chase

SCANDINAVIA

BROKER MOVES

D/S Norden (DNORD DC) upgraded to Buy from Hold at SEB

Equinor (EQNR NO) upgraded to Outperform from Sector Perform at RBC

Equinor (EQNR NO) downgraded to Neutral from Buy at DA Davidson

Fortum (FORTUM FH) initiated with Overweight at Morgan Stanley

US

CLOSES: SPX -0.42% at 4,499, NDX -0.87% at 15,273, DJIA -0.45% at 35,314, RUT -0.59% at 1,947.

SECTORS: Materials -1.06%, Consumer Discretionary -0.87%, Financials -0.87%, Technology -0.78%, Consumer Staples -0.66%, Industrials -0.46%, Real Estate -0.46%, Communication Services -0.24%, Energy +0.49%, Utilities +0.49%, Health +0.78%.

US-China - A US plan to restrict investment in China is likely to apply only to Chinese companies that get at least half of their revenue from sectors such as quantum computing and artificial intelligence, people familiar with the matter said. (Bloomberg)

Amazon (AMZN) - Is in talks to invest in SoftBank (9984 JT) unit Arm ahead of IPO, according to sources cited by Reuters. (Reuters)

Nvidia (NVDA) - Announces new GH200 Grace Hopper super chip; new chip to be in production in Q2 2024 - CEO Keynote speech. Announces GH200 Grace Hopper platform "based on a new Grace Hopper Superchip with the world's first HBM3e processor - built for the era of accelerated computing and generative AI." The dual configuration delivers up to 3.5x more memory capacity and 3x more bandwidth than the current generation offering. (Newswires)

Rivian Automotive Inc (RIVN) - Q2 2023 (USD): Adj. EPS -1.08 (exp. -1.41), Revenue 1.12bln (exp. 1bln); FY vehicle production view 52k (prev. 50k) KEY METRICS: Adj. EBITDA loss 881mln (exp. loss 1.13bln). Operating expense 873mln (exp. 955.6mln). FY GUIDANCE: Adj. EBITDA loss 4.20bln (prev. loss 4.30bln, exp. loss 4.18bln). CapEx 1.70bln (prev. 2.00bln, exp. 1.9bln). Production view 52k vehicles (prev. 50k). COMMENTARY: Sees reaching positive gross profit in 2024.

09 Aug 2023 - 06:49- Research Sheet- Source: Newsquawk