Jun 17 ,2024
Synopsis:
European equity markets closed mixed but above the levels in our prior update following weak performance last week amid political risk in Europe with spotlight on France. Travel, Banks and Autos were the best performers. Real Estate, Healthcare and Utilities the main decliners.
Markets sentiment improving somewhat after last week's selloff. Spotlight to remain on French electoral developments. Far-right leader Le Pen said she'll work with Macron if her party wins election in an appeal to moderates. Left-leaning alliance remains second in the polls. Reuters sources said ECB is no rush to discuss French bond rescue and onus on politicians to reassure investors after big move in French assets last week. More broadly across global markets, recent focus has been on flip-flopping global macro narrative, central bank easing bets for 2024 fizzling out, the AI secular growth tailwind, global political uncertainty.
UK election polls shows historic low for ruling Conservatives. The Standard cited Labour's shadow chancellor who told the FT she wants closer UK-EU trade and more foreign investment as it looks to support growth. Elsewhere, Ukraine peace summit saw Zelensky fail to win over Global South with India, Brazil, South Africa and opting out of signing summit document.
Latest ECB-speak reiterates data-dependency. Chief economist Lane said will see bumps in inflation.
Quiet macro calendar in Europe. Eurozone final labor cost data confirmed at 5.1% y/y. Rightmove update show UK house prices flat in June.
M&A news dominated corporate headlines. In the Nordics, Sampo (SAMPO.FH) offered 1.25 newly issued Sampo A shares in exchange for each share of Topdanmark (TOP.DC) in a deal worth DKK33B whilst - in the UK - Hikma Pharmaceuticals (HIK.LN) acquired few Xellia's assets for $135M plus additional contingent consideration of up to $50M. Also, United Internet (UTDI.GR) will make no further investments in holding company Kublai and Banco de Sabadell (SAB.SM) has postponed the completion of sale of Paycomet to Nexi (NEXI.IM).
On the reporting front, at its CMD today ING (INGA.NA) stated that it will target FY27 fee income of €5B, a cost/income ratio of 52-54% and a return on equity of 14% whilst - on another CMD - Amadeus IT Group (AMS.SM) presented its 2023-2026 financial performance; also, Essity (ESSITY.B.SS) presented a new set of financial targets following the divestment of the subsidiary Vinda.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Travel & Leisure +1.40%, Banks +0.99%, Autos & Parts +0.85%, Insurance +0.81%, Retail +0.63%, Financial Svcs +0.61%, Technology +0.53%, Consumer Products and Services +0.20%, Chemicals +0.18%, Media +0.12%, Construct & Mtls +0.12%
Underperformers:
Real Estate (1.04%), Health Care (1.03%), Utilities (0.98%), Basic Resources (0.74%), Personal Care Drug and Grocery Stores (0.37%), Food, Beverage and Tobacco (0.30%), Telecom (0.05%), Energy+0.02%
Macro:
EU
EU leaders meet in Brussels to divvy up top jobs. These are the frontrunners - Euronews
ECB
Post-Brexit
Rachel Reeves to seek 'improved' UK-EU trade terms if Labour wins election - FT
UK
France
France's Le Pen says she won't seek Macron's resignation if far right wins snap election - Politico
Germany
Scholz Demands More Team Spirit as Budget Showdown Looms - Bloomberg
Greece
Election aftershocks dominate the agenda, focus on the center-left - ekathimerini
Company news:
Notable Gainers
+22.2% TOP.DC (Topdanmark DKK354.00, +64.40) -- Sampo takeover offer
-1.2% SAMPO.FH (Sampo €38.81, -0.48)
+8.5% IDEX.NO (IDEX Biometrics NOK1.57, +0.12) -- receives production order for IDEX Pay as Beautiful Card Corporation is granted Mastercard Letter of Approval
+8.3% SFQ.GR (SAF-HOLLAND €17.26, +1.32) -- raises FY adj. EBIT margin guidance; expects FY EBIT margin to be around 10% vs prior guidance 9-9.5%
+4.6% RET.BB (Retail Estates €65.50, +2.90) -- Kepler Cheuvreux upgrade
+4.1% ELTEL.SS (Eltel SEK7.70, +0.30) -- and Elisa renews important frame agreement in Finland
+3.5% RKH.LN (Rockhopper Exploration £0.15, +0.01) -- Ombrina Mare monetisation of Arbitration Award update
+3.3% NNIT.DC (NNIT DKK106.80, +3.40) -- initiated buy at ABG Sundal Collier
+2.9% INGA.NA (ING Groep €15.78, +0.44) -- CMD
+2.6% EL.FP (EssilorLuxottica €206.30, +5.20) -- UBS upgrade
+2.3% DB1.GR (Deutsche Börse €186.45, +4.20) -- Kepler Cheuvreux upgrade
+1.8% SPKSJF.DC (Sparekassen Sjælland-Fyn DKK227.00, +4.00) -- raises FY PBT guidance to DKK 700-800M vs prior guidance DKK 650-750M
+1.7% ASCL.LN (Ascential £3.36, +0.05) -- H1 trading update
+1.7% MOBA.NO (Morrow Bank NOK4.78, +0.08) -- company presentation
+1.2% DNB.NO (DNB Bank NOK208.20, +2.50) -- share buyback of up to 1.0% of the company's shares
Notable Decliners
-22.7% KAR.SS (Karnov Group SEK66.40, -19.50) -- Greenoaks Capital Partners, Long Path Partners withdraw offer
-22.1% MIND.LN (Mind Gym £0.30, -0.09) -- FY earnings
-4.7% IPH.FP (Innate Pharma €2.03, -0.10) -- updated results from the Sanofi developed Blood Cancer Phase 1/2 SAR443579/IPH6101
-4.7% ERG.IM (ERG €23.64, -1.16) -- initiated underperform at BofA
-3.8% VWS.DC (Vestas Wind Systems DKK175.20, -6.85) -- BofA downgrade
-1.8% SSPG.LN (SSP Group £1.66, -0.03) -- Goldman Sachs downgrade
-0.9% FCT.IM (Fincantieri €5.13, -0.04) -- Fincantieri Chairman Claudio Graziano has passed away -- Ansa
EU companies reporting tomorrow:
Earnings:
France: Vente-Unique.com (ALVU.FP)
Nordics: Roblon (RBLN.B.DC), Biovica International (BIOVIC.B.SS)
Southern Europe: Admie Holdings (IPTO) (ADMIE.GA)
UK: Ashtead Group (AHT.LN), Telecom Plus (TEP.LN), Tatton Asset Management (TAM.LN), De La Rue (DLAR.LN), Oxford BioDynamics (OBD.LN)
Trading Update: Whitbread (WTB.LN), SThree (STEM.LN)
Traffic: VINCI (DG.FP)
Data:
Economics:
Italy May Final CPI +0.8% y/y vs preliminary +0.8%; +0.2% m/m vs preliminary +0.2%
Spain Apr Trade Balance (€4.70B) vs consensus (€3.50B) and prior (€2.0B)
Markets:
WTI Crude (Jul 24): +$1.04 or +1.33% to $79.49
€-$ +0.0018 or +0.17% to 1.0723
£-$ +0.0005 or +0.04% to 1.2689
€-£ +0.0010 to 0.8450
S&P 500 +0.16%
Performance year-to-date
FTSE 100: +5.29%
DAX: +7.86%
CAC: +0.38%
MIB: +8.49%
Stoxx 600: +6.79%
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