Jul 01 ,2024
Synopsis
European equity markets set to open broadly higher after last week's (and month's) losses. Euro strengthening following smaller-than-predicted victory by Le Pen's National Rally (further details below). Crude nudging higher while copper leading retreat among base metals
Asian equities mixed Monday. Taiwan outperforming amid widespread gains in semis. Quiet elsewhere with mainland China narrowly mixed (Hang Seng closed for public holiday). China official manufacturing PMI shrunk in-line with expectations, weighed down by continued declines in new orders and exports. Accompanied by dissipation of pricing pressures amid soft demand. Non-manufacturing PMI below consensus as construction activity fell to lowest in eleven months. Data offers early signal that tepid domestic demand continued into June, underlining focus on upcoming Politburo meeting for fresh policy signals.
The initial results of the first round of France's parliamentary elections indicate that Marine Le Pen's National Rally (RN), which is anti-immigration, is set to win 33.2% of the vote. Trailing behind are the left-wing alliance with 28.1%, and President Macron's alliance with 21%. The BBC highlights that Marine Le Pen and Jordan Bardella are aiming for an absolute majority of 289 seats in the 577-seat National Assembly. However, seat projections for the upcoming second-round run-off votes suggest they might not achieve this; pollsters predict the far-right could secure between 230 and 280 seats. The Financial Times points out that Ipsos' projection does not consider the complexities of France's two-round voting system, which includes the possibility of candidates withdrawing to disadvantage the far right or far left. (France24, BBC, FT, Le Monde)
Analysts at Deutsche Bank note the 1st round snap election results broadly inline with exit polls and market pricing and likely to be met with a marginal relief reaction today. However, given the two round electorate system, firm notes there remains uncertainty on the seat projections for the second round and it expects relatively high share price volatility with fundamentals likely to remain largely out of focus this week as well for the French banks.
In central banks today, Ireland Central Bank's McKiernan panellist at 12:30CET at event hosted by The House of the Euro, title What are the implications of a Digital Euro for EU competitiveness and strategic autonomy?. Bundesbank's Nagel speech at 14:15CET at Frankfurt Finance Summit. ECB Forum on Central Banking (through Wed), ECB's Lagarde speech at 20:00CET. Slovakia Central Bank publishes latest macroprudential commentary whilst AWG and MPAG workshop on financial stability analysis of large changes in interest rates jointly hosted with Latvia's Central Bank.
European macro data releases out today include Italy, Norway, Spain, Sweden Jun manufacturing PMIs and final reads for Eurozone, France, Germany and UK, Germany Jun preliminary CPI, Switzerland May retail sales, UK May mortgage approvals, M4 money supply, Jun house price index - Nationwide, Greece May unemployment rate, Ireland Jun preliminary HICP, Netherlands May retail sales, Austria Jun unemployment rate, Portugal May unemployment rate. Also of note, France, Italy, Spain Jun new car registrations are due to be released
Among stocks in focus: APAM.NA (Aperam) guides Q2 adjusted EBITDA higher than €55M vs FactSet €74.5M. ATO.FP (ATOS SE) reaches agreement on financial restructuring terms between the company and a group of banks and bondholders. Atlas Luxco S.à r.l. announces public offers to purchase all of the outstanding common shares and SDRs of Millicom International Cellular S.A. (TIGO.SS) for $24.00 in cash per Common Share and per SDR
B-shares of Kalmar Corp. (KALMAR.FH), spun-off by Cargotec (CGCBV.FH), will be listed on Nasdaq Helsinki.
Politics/Macro/World News
Top company news
Earnings/updates
ATO.FP (ATOS SE) -- reaches agreement on financial restructuring terms between the company and a group of banks and bondholders
APAM.NA (Aperam) -- guides Q2 adjusted EBITDA higher than €55M vs FactSet €74.5M [2 est, €71-78M]
CGCBV.FH (Cargotec) -- registers partial demerger; Kalmar to be listed on Nasdaq Helsinki
ORPHA.DC (Orphazyme) -- announces settlement of outstanding and raises FY operating profit guidance
KALMAR.FH (Kalmar) -- specifies its outlook for 2024
M&A
TIGO.SS (Millicom) -- Atlas Luxco S.à r.l. announces public offers to purchase all of the outstanding common shares and SDRs of Millicom International Cellular S.A. for $24.00 in cash per Common Share and per SDR
MF.FP (Wendel) -- agrees to acquire ~50% of Globeducate, one of the world's leading international K-12 education groups
BLK (BlackRock) -- confirms acquisition of Preqin for £2.55B ($3.2B) in cash
SPR (Spirit AeroSystems) -- Boeing confirms acquisition of Spirit AeroSystems for $37.25/share in stock or enterprise value of $8.3B
AIR.FP (Airbus SE) -- Airbus provides details on potential deal with Spirit AeroSystems
ACOMO.NA (ACOMO NV) agrees to acquire nuts and dried food business from Caldic for an undisclosed sum
RQIH.LN (R&Q Insurance Holdings) -- R&Q Insurance completes sale of equity interest in Accredited Insurance for $420M
LLQ.SW (Lalique Group) -- Silvio Denz, majority shareholder of Lalique Group publishes the provisional interim results of the voluntary public tender offer
OJM.IM (Openjobmetis) -- Groupe Crit announces preliminary results of mandatory offer for Openjobmetis; will hold 98.80%; will pursue squeeze-out and delisting
SG.IM (SAES Getters) -- S.G.G. Holding S.p.A. announces provisional results of offer for SAES Getters (post EU close 28-Jun)
FER.SM (Ferrovial) -- Players lining up to compete for AGS Airports - Sunday Times
PGHN.SW (Partners Group Holding) -- Partners Group buys majority stake in FairJourney Biologics from GHO Capital at valuation of €900M (CHF870.8M) - FT
BVIC.LN (Britvic) -- Top-ten Britvic holder tells Carlsberg to raise its offer - Mail on Sunday
EDPR.PL (EDP Renovaveis) -- to sell 191 MW wind portfolio in Italy for EV of €0.4B
TIETO.FH (Tietoevry) -- notes strategic review of Tech Services progressing; active sales process ongoing with timeline extended
BOSN.SW (Bossard Holding) -- acquires Dejond Fastening NV; terms not disclosed
AUSS.NO (Austevoll Seafood) -- Br Birkeland AS completes sale of 100% of the shares in the two wholly owned subsidiaries Br Birkeland Fiskebåtrederi AS and Talbor AS
FFARM.NA (ForFarmers) -- to acquire Van Triest Veevoeders; terms undisclosed
ZEHN.SW (Zehnder Group) -- completes the sale of Climate Ceiling Solutions business to Private Assets SE & Co. KGaA
Healthcare
GSK.LN (GSK Plc) -- issues statement on Zantac (ranitidine) litigation - Gross case
IDIA.SW (Idorsia) -- announces JERAYGO (aprocitentan) approved in Europe as first and only ERA for the treatment of resistant hypertension
IDIA.SW (Idorsia) -- Higher cantonal composition authority issues written court decision in respect to the amendments to the terms of the 2024 convertible bonds
SDZ.SW (Sandoz Group) -- FDA approves biosimilar Pyzchiva (ustekinumab-ttwe) to be commercialized by Sandoz in US
VLA.FP (Valneva) -- Receives Marketing Authorization in Europe for the World's First Chikungunya Vaccine, IXCHIQ
ALBPS.FP (Biophytis) -- presented its Phase 2-3 COVA study results in severe forms of Covid-19 at the World Congress on Infectious Diseases
FYB.GR (Formycon) -- announces FDA grants approval for Eylea biosimilar FYB203/AHZANTIVE (aflibercept-mrbb)
Other
NESN.SW (Nestle) -- seeking stable growth in sales volumes for remainder of year, says Schweiz am Wochenende - Reuters
SAF.FP (Safran) -- signs agreement for implementation of share buyback for cancellation first tranche
BARC.LN (Barclays) -- annual US stress test results
SAN.SM (Banco Santander) -- Banco Santander's updated SCB will be 3.5% of its Common Equity Tier 1 capital resulting in an overall CET1 capital requirement of 8.0%.
SDRL.NO (Seadrill) -- effects cancellation of 5.3M treasury shares
Estimated weekend box office revenues in US, Canada $152.7M, +19.1% y/y - Box Office Mojo
Rio Tinto to install carbon free aluminium smelting cells at Arvida smelter
Key rating changes
Upgrades
CLN.SW (Clariant) -- to buy from neutral at Goldman Sachs
CNA.LN (Centrica) -- to buy from hold at Berenberg
HBH.GR (Hornbach Holding) -- to buy from hold at Berenberg
FCT.IM (Fincantieri) -- to buy from hold at Stifel
1SXP.GR (SCHOTT Pharma) -- to outperform from neutral at Oddo
Downgrades
AKZA.NA (Akzo Nobel) -- to sell from neutral at Goldman Sachs
BC8.GR(Bechtle) -- to underperform from neutral at BNP Paribas Exane
Data
Nikkei +0.03% to 39593.38
Hang Seng +0.00% to 17718.61
Shanghai Composite +0.62% to 2985.87
S&P futures +16.5 vs prior close of 5521.5
€-$ +0.0017 or +0.16% to 1.0761
$-¥ +0.21 or +0.13% to 161.01
€-¥ +0.48 or +0.28% to 173.26
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