Dec 18 ,2023
Synopsis:
European equity markets ended mixed to lower with pan-European indices closing around session lows after failing to sustain earlier gains. Denmark +1.2%, Norway +1.0%, FTSE 100 +0.5% led outperformers whilst Germany and Portugal both down (0.6%), Netherlands (0.5%), Spain (0.4%) led underperformers.
In geopolitical developments, two commercial ships have been attacked in the Red Sea by Yemen's Houthi, marking the latest in a series of assaults amid rising tensions. BP has decided to pause all shipments through the Red Sea. Follows Moller-Maersk decision on Friday to also halt shipments after two attempted attacks on its vessels (Times).
In central banks updates, ECB published its latest survey of monetary analysts whilst Bundesbank released its monthly report. ECB sources said no dovish pivot see before March, which is likely to make any rate cut before June difficult. This is several months later than market expectations. Meanwhile in the UK, BoE deputy chief Broadbent said uncertainty has delayed the BoE's reaction function and will take time to understand forces driving economy. Highlighted it might need longer period of below-trend growth given extent that tight labour market is fuelling strong domestic inflation.
Looking at macroeconomic updates, German Ifo business climate index missed in December at 86.4 vs consensus 87.8 and prior 87.2 revised from 87.3 reading. Current conditions index also lower at 88.5 vs 89.7 forecast and prior 89.4, while expectations index at 84.3 vs 85.9 consensus and prior 85.1 revised from 85.2
In corporate news, CECONOMY (CEC.GR) reported FY adj. EPS €0.08 vs FactSet €0.14. Thyssenkrupp nucera (NCH2.GR) posted Q4 earnings including Q4 EPS €0.03 vs year-ago (€0.01) and said it expects significant sales growth in the mid-double-digit percentage range for the new. All for One Group (A1OS.GR) confirmed prelim FY results and guidance. In the UK, Hollywood Bowl Group (BOWL.LN) released FY numbers and updated capital allocation policy. Amigo Holdings (AMGO.LN) reported H1 adjusted EPS 2.0p vs year-ago (2.7p); continues to be open to proposals for a reverse takeover.
Further on M&A front, Iliad submits proposal to Vodafone (VOD.LN) to merge their Italian businesses. Koch Ag & Energy Solutions agrees to acquire OCI (OCI.NA) Global's fertilizer plant in Wever, Iowa, for $3.6B. IBM to acquire StreamSets and webMethods platforms from Software (SOW.GR) for €2.13B in cash. Unilever (ULVR.LN) to sell Elida Beauty business to Yellow Wood Partners for an undisclosed sum. Casino Group (CO.FP) announced exclusive discussions with Auchan Retail and Groupement Les Mousquetaires for sale of hypermarkets and supermarkets.
On the speculation front, EQT reportedly said to be near agreement to buy medical device maker Zeus Company in potential $3B+ deal. Nikko Asset Management (TKO.FP) in advanced talks to buy into Tikehau Capital. OnePoints reportedly wants to increase its stake significantly and take control of the governance in Atos (ATO.FP). Meanwhile, boards of LondonMetric Property (LMP.LN), LXi REIT confirmed that they are in discussions regarding possible all-share merger.
Digest:
Sectors - STOXX Europe 600:
Outperformers
Oil & Gas +1.10%, Basic Resources +0.78%, Health Care +0.65%, Chemicals +0.27%, Media +0.24%, Food & Beverage +0.01%, Travel & Leisure (0.07%), Telecom (0.07%), Banks (0.08%), Financial Svcs (0.14%), Insurance (0.16%),
Underperformers
Construct & Mtls (1.91%), Technology (1.86%), Utilities (1.31%), Autos & Parts (1.16%), Persnl & HHold Goods (0.66%), Ind Goods & Svcs (0.48%), Retail (0.45%), Real Estate(0.37%),
Macro/Peripheral markets:
EU
ECB
ECB probably at rate peak but too soon to consider cuts, Nagel says - Bloomberg
UK
UK recession risk returns with data signalling possible downgrade - Bloomberg
London's transport body warns of funding shortfall after securing £250mn - FT
UK is to implement a new import carbon pricing mechanism by 2027 to support the decarbonisation drive - release
UK's Emissions Trading Scheme Authority launches 2 consultations; deadline for responses 11-Mar-24 - release
BOE Broadbent speech 'Signal versus noise' - release
Biden ditches trade deal talks with Britain - Telegraph
Germany
Italy
Italy has failed to curb migration, Meloni admits at far-right festival - FT
Netherlands
Greece
Economist ranks Greek economy in top place - ekathimerini
New burden on the debt from 2033 - ekathimerini
Geopolitics
UK, Germany and France step up calls for Israel to agree Gaza ceasefire - FT
Company news:
Notable Gainers
+33.3% AMGO.LN (Amigo Holdings £0.00, -0.00) -- H1 earnings
+20.9% OCI.NA (OCI NV €24.32, +4.20) -- Koch Ag & Energy Solutions agrees to acquire company's fertilizer plant in Wever, Iowa, for $3.6B; to use the proceeds from sale to reduce holding company debt, consider a return of capital to shareholders
+12.5% MCPHY.FP (McPhy Energy €3.72, +0.41) -- contract
+7.9% KWS.LN (Keywords Studios £15.24, +1.11) -- acquires The Multiplayer Group Ltd for £76.5M
+6.4% EKT.GR (EnergieKontor €75.00, +4.50) -- sells Garbet onshore wind park project; raises FY23 guidance
+6.3% IPO.LN (IP Group £0.56, +0.03) -- launches share buyback up to £20M
+4.4% MEN.LN (Molecular Energies £0.83, +0.03) -- significant progress within Green House Capital Group Technological breakthrough on Dual Fuel Hydrogen Mobility Green House set for IPO
+4.3% MAU.FP (Maurel et Prom €6.17, +0.26) -- Wentworth Resources updates on offer from company
+4.2% TIT.IM (Telecom Italia €0.28, +0.01) -- receives Vivendi's lawsuit; NetCo deal goes ahead as planned
+4.2% SQZ.LN (Serica Energy £2.15, +0.09) -- signs $525M six-year reserves based lending facility with $525M accordion
+4.1% ENT.LN (Entain £9.83, +0.39) -- Jefferies upgrade
+3.8% VOD.LN (Vodafone Group £0.67, +0.02) -- Iliad looking to finalize joint venture proposal with Vodafone to combine Italian operations by end of January - Reuters
+3.4% NORTHM.DC (North Media DKK61.00, +2.00) -- concludes agreement with Ge-Te Media Aktiebolag to acquire SDR Svensk Direktreklam AB and EGRO Konsult AB
+3.2% AFX.GR (Carl Zeiss Meditec €100.35, +3.07) -- Eurazeo confirms in exclusive discussions to sell its stake in D.O.R.C. to company
+3.0% GIGA.NO (Gigante Salmon NOK9.00, +0.26) -- Initiates testing and commissioning with water in first production unit
+2.6% BERG.B.SS (Bergman & Beving SEK176.20, +4.40) -- acquires 80% of the shares in Orbital Fabrications
+2.2% NOVO.B.DC (Novo Nordisk DKK678.10, +14.30) -- Novo Nordisk reportedly working with IndiaMART to stop illegal Wegovy sales in India - Reuters
+2.1% SOW.GR (Software €32.50, +0.68) -- Silver Lake (Mosel Bidco SE) to make a delisting tender offer for remaining company shares at €32/share; IBM to acquire StreamSets and webMethods platforms for €2.13B in cash;
+2.0% GAW.LN (Games Workshop Group £99.90, +2.00) -- to develop films and television series with Amazon Content Services LLC
+2.0% TKO.FP (Tikehau Capital €19.84, +0.38) -- Nikko Asset Management in advanced talks to buy into Tikehau Capital - Bloomberg
+1.8% MITRA.BB (Mithra Pharmaceuticals €1.14, +0.02) -- receives positive DSMB opinion on DONESTA European phase 3 trial
Notable Decliners
-30.3% RBGP.LN (RBG Holdings £0.12, -0.05) -- FY trading update
-12.5% TRIN.LN (Trinity Exploration & Production £0.35, -0.05) -- update on operations at its Jacobin oil discovery
-10.3% ATO.FP (ATOS SE €7.05, -0.81) -- OnePoints wants to increase its stake significantly and take control of the governance in Atos -- BFMTV
-8.9% CEC.GR (CECONOMY €2.07, -0.20) -- FY earnings
-5.1% EMBRAC.B.SS (Embracer Group SEK27.50, -1.47) -- extension of credit and loan facilitie
-4.6% FRES.LN (Fresnillo £5.59, -0.27) -- Morgan Stanley downgrade
-2.7% CHAR.LN (Chariot £0.11, -0.00) -- increases stake in JV Etana with H1 Holdings Limited to 49% from 25%
-2.6% CLBS.LN (Celebrus Technologies £1.85, -0.05) -- appoints new Chair
-2.0% SPX.LN (Spirax-Sarco Engineering £100.95, -2.05) -- appoints new CFO
-2.0% ANORA.FH (Anora Group €4.14, -0.09) -- lowers FY guidance
-1.8% CFR.SW (Richemont CHF119.75, -2.15) -- Richemont, FARFETCH and Symphony Global terminate agreements; Richemont will re-evaluate options for YNAP
-1.7% DIA.IM (DiaSorin €90.32, -1.58) -- approves 2024-2027 Business Plan
-1.7% FME.GR (Fresenius Medical Care €37.67, -0.67) -- Intermediate Capital Group finalising deal to acquire Cura Day Hospitals - Australian Financial Review
-1.0% LMP.LN (LondonMetric Property £1.96, -0.02) -- Boards of LondonMetric Property plc, LXi REIT plc note recent media speculation; confirm that they are in discussions regarding possible all-share merger
EU companies reporting tomorrow:
Earnings:
France: MedinCell (MEDCL.FP)
Nordics: SkiStar (SKIS.B.SS), Per Aarsleff Holding (PAAL.B.DC)
Southern Europe: SeSa (SES.IM)
UK: De La Rue (DLAR.LN)
Data:
Economics:
Germany Dec Ifo survey
Business Climate 86.4 vs consensus 87.8 and prior revised 87.2 from 87.3
Current Conditions 88.5 vs consensus 89.7 and prior 89.4
Expectations 84.3 vs consensus 85.9 and prior revised 85.1 from 85.2
Spain Oct Trade Balance (€5.1B) vs consensus (€4.1B) and prior (€3.8B)
Markets:
€-$ +0.0028 or +0.26% to 1.0925
£-$ (0.0017) or (0.13%) to 1.2653
€-£ +0.0033 to 0.8633
S&P 500 +0.44%
Performance year-to-date
FTSE 100: +2.18%
DAX: +19.59%
CAC: +16.92%
MIB: +27.65%
Stoxx 600: +11.87%
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