Mar 04 ,2024
Synopsis:
European indices ended mixed, with Denmark outperforming the region. Stoxx 600 posted fresh all-time high today, boosted by gains in ASML.NA and NOVO.B.DC. Bank of America (BofA) in recent note raised EU value vs growth to market weight from underweight, as strength in tech and luxury goods, Europe's two biggest growth sectors, explains most of the roll-over in value versus growth so far this year. Value/growth ratio at two-year lows despite rising yields. Broker suggests performance of growth sectors leaves little upside, while value may decline slightly before rebounding. BofA remains overall negative on EU equities citing weaker growth, higher risk premia and EPS downgrades.
In macro-news, Sentix investor confidence survey for March saw better Eurozone reading at -10.5 versus consensus -10.8 versus prior -12.9, which was the fifth consecutive improvement and highest number since April 2023. Current situation index also seeing an uptrend with best reading since June 2023 at -18.5 versus prior -20.0. Similar dynamic for expectations index at -2.3, which was the best reading since February 2022, and continues the consistent improvement seen since Q4 2023. ZEW said it would be an exaggeration to describe it as a spring revival with Germany in recession and Eurozone still in a "downturn regime". Wednesday's UK budget is tipped to include measures to support UK investment into the UK equity market. Plans are being drawn up to allow private companies to offer shares on exchanges. Reuters cited a FT report, which said the Private Intermittent Securities and Capital Exchange System (Pisces) would act as a crossover between public and private markets. Investors will be able to sell stakes on a limited number of days. Treasury source said it will boost pipeline of IPOs. Other measures under consideration include creating a tax-free savings account for investing in UK-only markets (Bloomberg). Pension funds will also be forced to disclose how much of their savers' contributions go into UK assets (Telegraph). Schemes will be given until 2027 to disclose information, as well as industry costs and net investment returns. Leading City figures also pushing for chancellor to scrap stamp duty on buying shares amid concerns it is hampering City of London competitiveness (CityAM). New research showed it could increase long-run GDP between 0.2% and 0.7%. Swiss inflation eased to 1.2% y/y in February, down from 1.3% in January, yet above the 1.1% median. Core also eased to 1.1% from prior 1.2%. Compared to previous month, inflation rose by 0.6% due to rising prices for housing rent, air transport, supplementary accommodation, and international holidays. However, food prices continued to decline. Bloomberg highlighted number might mute speculation about SNB cutting rates earlier than expected, while Reuters said disinflation trend strengthens case for easing. Bloomberg pointed out that while majority of economists do not see first rate cut until September, some analysts now anticipate June, or even a move at next meeting on 21-Mar, though this seems unlikely
On a busy DACH sector, Delivery Hero (DHER.GR) announced a financing transaction inorder to extend its existing term facilities and to raise add-on term facilities, with the company also confirming FY guidance; BridgeBio Pharma granted Bayer (BAYN.GR) exclusive European license for acoramidis in ATTR-CM for up to $310M whilst - in another deal - SoftwareONE Holding (SWON.SW) founding shareholders provided an update on group acting in concert with Bain Capital; Henkel (HEN.GR), Aryzta (ARYN.SW), COMET Holding (COTN.SW) and Evonik Industries (EVK.GR) posted earnings
Elsewhere, Ryanair Holdings (RYA.ID) and Wizz Air Holdings (WIZZ.LN) issued Feb traffic numbers whilst - in France - Kering (KER.FP) is reportedly interested in Italian eyewear company Marcolin in up-to-€1.3B deal; Italy's Enel (ENEL.IM) will acquire a 49% stake in Enel Libra Flexsys for €1.1B
Looking ahead to tomorrow's calendars, Bayer (BAYN.GR), TRATON (8TRA.GR), Stroer & Co. (SAX.GR), Chocoladefabriken Lindt & Sprungli (LISN.SW), VAT Group (VACN.SW), Thales (HO.FP), Brembo (BRE.IM), Ashtead (AHT.LN), Intertek (ITRK.LN), Inchcape (INCH.LN), Greggs (GRG.LN), Rotork (ROR.LN), IWG (IWG.LN) and Travis Perkins (TPK.LN) will be among other companies to update investors. On the macro-calendar, Italy, Spain, Sweden Feb services PMIs and final reads for Eurozone, France, Germany and UK, Italy Q4 final GDP, France Jan industrial production and Eurozone Jan PPI will be the main releases
Digest:
Sectors - STOXX Europe 600:
Outperformers: Technology +0.77%, Health Care +0.53%, Banks +0.29%, Telecom +0.05%, Ind Goods & Svcs (0.03%), Construct & Mtls (0.03%)
Underperformers: Basic Resources (1.26%), Real Estate(1.19%), Travel & Leisure (1.11%), Retail (1.07%), Oil & Gas (0.78%), Persnl & HHold Goods (0.60%), Autos & Parts (0.52%), Food & Beverage (0.45%), Financial Svcs (0.39%), Chemicals (0.31%), Utilities (0.22%), Insurance (0.13%), Media (0.06%)
Macro:
Germany says Kremlin's claim it is planning war with Russia is 'absurd' (Guardian)
Germany under pressure to explain intercepted phone call (BBC)
France moves to make abortion a constitutional right amid rollbacks in US and Europe (Politico)
UK's Tory support hits lowest level for more than 40 years, damning poll shows (Independent)
Quite good discussions on ITA-Lufthansa deal - Vestager (Ansa)
Spain braces for wildfires as beef farmers battle red tape (Reuters)
Company news:
Notable Gainers
+31.6% MEN.LN (Molecular Energies £0.25, +0.06) -- strategic progress in Green House Capital Group
+26.3% RENX.LN (Renalytix £0.51, +0.11) -- receives unsolicited approach from large publicly listed strategic diagnostics company; also updates on financing
+15.4% MIRI.LN (Mirriad Advertising £0.02, -0.00) -- signs agreement with leading US media and entertainment conglomerate
+4.9% ROO.LN (Deliveroo £1.19, +0.06) -- Sachem Head Capital Management LP discloses ~5.23% stake in Deliveroo as at 1-Mar
+4.6% HPHA.GR (Heidelberg Pharma €3.20, +0.14) -- announces royalty financing agreement with HealthCare Royalty for up to $115M
+3.9% CKN.LN (Clarkson £38.20, +1.45) -- FY earnings
+3.6% VTU.LN (Vertu Motors £0.70, +0.02) -- 5M trading update
+3.2% NKR.NO (Nekkar NOK10.38, +0.32) -- contract
+1.8% DIA.IM (DiaSorin €94.18, +1.70) -- receives 510(k) clearance from the FDA for the company's new LIAISON PLEX platform as well as its first panel of tests
+1.6% QTX.LN (Quartix Technologies £1.63, +0.02) -- FY earnings
+1.1% ARYN.SW (Aryzta CHF1.59, +0.02) -- FY earnings
+1.0% COTN.SW (COMET Holding CHF318.20, +3.20) -- FY earnings; index change
+0.9% DHER.GR (Delivery Hero €22.31, +0.20) -- financing transaction to extend its existing term facilities and to raise add-on term facilities; confirm FY24 guidamce
+0.1% EVK.GR (Evonik Industries €17.19, +0.03) -- Q4 earnings
Notable Decliners
-10.5% NODL.NO (Northern Drilling NOK0.39, -0.05) -- decided to delist the shares of Northern Drilling from trading on Oslo Børs
-10.0% EMBRAC.B.SS (Embracer Group SEK17.88, -1.98) -- index change
-8.8% SHLF.NO (Shelf Drilling NOK24.90, -2.40) -- Q4 earnings; contract
-7.7% AB.FP (AB Science €2.15, -0.18) -- will host a live webcast today
-3.7% HUNT.NO (Hunter Group NOK2.10, -0.08) -- announces final results, allocation of subsequent offering
-3.3% FARN.LN (Faron Pharmaceuticals £1.48, -0.05) -- announces €3.2M commitments for convertible loans
-2.4% MNDI.LN (Mondi £13.79, -0.33) -- increases preliminary takeover offer for DS Smith - Bloomberg
-2.3% BILL.SS (Billerud SEK88.66, -2.10) -- index change
-1.9% KER.FP (Kering €416.00, -7.90) -- interested in eyewear company Marcolin in up-to-€1.3B deal -- Miss Tweed
-1.8% SWON.SW (SoftwareONE Holding CHF16.28, -0.29) -- founding shareholders provide update on group acting in concert with Bain Capital
-1.6% GURN.SW (Gurit Holding CHF66.80, -1.10) -- FY earnings
-1.4% DATA.LN (GlobalData £1.76, -0.03) -- FY earnings
-1.4% SMDS.LN (DS Smith £3.22, -0.05) -- Mondi increases preliminary takeover offer - Bloomberg
-1.2% SSAB.B.SS (SSAB SEK78.66, -0.96) -- order
-0.5% IMPN.SW (Implenia CHF30.50, -0.15) -- contract
EU companies reporting tomorrow:
Benelux: D'Ieteren (DIE.BB), Nyxoah (NYXH.BB), MotorK (MTRK.NA), TKH Group (TWEKA.NA)
DACHs: Bayer (BAYN.GR), TRATON (8TRA.GR), Redcare Pharmacy (RDC.GR), NEXUS (NXU.GR), Stroer & Co. (SAX.GR), Chocoladefabriken Lindt & Sprungli (LISN.SW), VAT Group (VACN.SW), Inficon (IFCN.SW), dormakaba (DOKA.SW), Forbo (FORN.SW), HUBER+SUHNER (HUBN.SW), Ascom (ASCN.SW)
France: Thales (HO.FP), Ekinops (EKI.FP)
Nordics: Systemair (SYSR.SS)
Southern Europe: Brembo (BRE.IM), Acea (ACE.IM), Ariston (ARIS.IM), Maire Tecnimont (MAIRE.IM), Mota-Engil (EGL.PL)
UK/Ireland: Ashtead (AHT.LN), Intertek (ITRK.LN), Inchcape (INCH.LN), Greggs (GRG.LN), Rotork (ROR.LN), IWG (IWG.LN), Travis Perkins (TPK.LN), Keller (KLR.LN), Johnson Service Group (JSG.LN), Bakkavor (BAKK.LN), SIG (SHI.LN), dotDigital (DOTD.LN), Reach (RCH.LN), Foxtons (FOXT.LN), Headlam (HEAD.LN), Beeks Financial Cloud (BKS.LN) STV Group (STVG.LN), Origin Enterprises (OIZ.ID)
Trading Update: Nordnet (SAVE.SS)
CMD/events: Bayer (BAYN.GR), Coface (COFA.FP), Maire Tecnimont (MAIRE.IM), Cellnex Telecom (CLNX.SM), Scanfil (SCANFL.FH), Ependion (EPEN.SS)
Data:
Economics:
Eurozone Mar Sentix investor confidence (10.5) vs consensus (10.8), prior (12.9)
Switzerland Feb CPI +1.2% y/y vs consensus +1.1%, prior +1.3%; +0.6% m/m vs consensus +0.5%, prior +0.2%
Spain Feb unemployment change (7.5K) vs consensus (5.0K), prior +60.4K
Markets:
WTI Crude (Apr 24): ($0.67) or (0.84%) to $79.30
€-$ +0.0019 or +0.18% to 1.0860
£-$ +0.0044 or +0.35% to 1.2698
€-£ (0.0014) to 0.8555
S&P 500 (0.09%)
Performance year-to-date
FTSE 100: (1.27%)
DAX: +5.76%
CAC: +5.43%
MIB: +8.42%
Stoxx 600: +3.82%
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