Oct 07 ,2024
Synopsis:
European equity markets closed mixed. After an initial period on range-bound trading either side of unchanged, pan-European indices moved higher in the afternoon, though Wall Street's muted performance capped European shares improvement.
With shares ending in a narrow range just below the best levels of the session, Greece (0.6%) and Belgium, Norway both (0.5%) led underperformers, with Denmark +2.4%, Portugal +0.7%, Italy +0.6% and Spain +0.5% leading outperformers.
Today was the first anniversary of Hamas' attack against Israel, and the two sides traded volleys of strikes. Interfax reported that Russia's Putin to meet Iran's President on 11-Oct. As the war in Ukraine entered its 955th day, Ukraine claimed it struck a major oil terminal in Crimea and Russia launched hypersonic missiles at Ukraine. President Zelenskyy says the war is in 'a very important phase'. The Netherlands confirmed that it had sent a first batch of F-16 fighter jets to Ukraine
Eurogroup meeting took place, participants included ECB's Lagarde and Cipollone.
In Norway, finance minister presented the government's proposal for the state budget 2025. In France, finance minister Armand says country will bring its deficit below the 3% mark by 2029, ahead of presenting the budget on Thur. In the UK, MPs return after the Party conf recess, with questions on work and pensions including on winter fuel payments. There was a demonstration (Daily Record) on the cut ahead of parliament's resumption at 14:30BST. Other business saw government statements on the Middle East, British Indian Ocean Territory negotiations and government's funding decision on Carbon capture, usage and storage.
Chancellor Scholz attends Hamburg Sustainability Conf . EU's Vestager in fire side chat on Europe AI and global competitiveness at the CopenhAIgen Forum and speaks later in the day at AI related event .
EU Parliamentary Committee on Budgets to adopt its position on the EU Budget 2025, also committees on agriculture and rural development, transport and tourism as well as environment, public health and food safety meet.
In central banks updates, ECB's Villeroy, in an interview in La Repubblica, was the latest official to advocate for a rate cut this month. Bundesbank's Payment Transactions Symposium, speakers included ECB's Cipollone (speech) and Bundesbank's Balz (speech). ECB conf on Monetary Policy (through Tue), ECB's Lane speech earlier. ECB's Escriva spoke at event in Madrid organised by KPMG and Expansión. Bundesbank's Nagel spoke at event celebrating the joining of the EU Commission to the European repo market.
BaFin and Bundesbank announce the results of the Less Significant Institutions stress test 2024 (presentation) that showed the profitability at Germany's small and medium-sized banks and savings banks improved significantly in 2023, with most institutions have good capital ratios and the capability of handling the very demanding challenges posed in this year's stress test
Economic data included disappointing Germany Aug factory orders and data from the Halifax Building Soc. showing annual growth in UK house prices in Sep at the highest rate since Nov-22, and whilst market conditions have improved, housing costs remain a challenge, and Halifax expects property price growth over the rest of this year and into next to remain modest.
Amongst the limited corporate news flow, Equinor (EQNR.NO) acquires a 9.8% stake in Ørsted (ORSTED.DC) and plans to raise this to 10%. DS Smith (SMDS.LN) shareholders approve acquisition by International Paper (IP), the UK company's shares also downgraded to underweight from equal weight at Barclays, Italgas (IG.IM) presents Strategic Plan 2024-2030, acquisition of 2i Rete Gas and reaffirms 2024 guidance. Bureau Veritas (BVI.FP) sold its food testing business to Mérieux NutriSciences for €360M (Enterprise Value) and reportedly, the Adani Group is in discussions to acquire Heidelberg (HEI.GR) India cement business.
Earnings updates provided by Shell (SHEL.LN) issued its Q3 update note, Grainger (GRI.LN), Clas Ohlson (CLAS.B.SS) and Lerøy Seafood Group (LSG.NO).
Applied Nutrition (+APPNUT.LN) confirms it intends to undertake an IPO; admission to trading expected to occur in Oct-24
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Banks +0.99%, Oil & Gas +0.78%, Persnl & HHold Goods +0.78%, Health Care +0.72%, Telecom +0.33%
Underperformers:
Real Estate (1.41%), Insurance (0.69%), Technology (0.68%), Utilities (0.51%), Chemicals (0.23%), Food & Beverage (0.15%), Ind Goods & Svcs (0.15%), Travel & Leisure (0.08%), Basic Resources (0.07%), Retail (0.06%), Autos & Parts +0.06%, Financial Svcs +0.07%, Media +0.08%, Construct & Mtls +0.11%
Macro/Peripheral markets:
EU:
European households hoard savings as US consumers drive global recovery - FT
France:
Germany:
Government's latest forecast to show 2024 GDP (0.2%) y/y vs prior estimate +0.3%, 2025 +1.1% vs prior +1.0% and 2026 +1.6% - Süddeutsche Zeitung
German retail environment deteriorates latest Ifo survey shows - release
Ireland:
Ireland Q3 house price index +0.8% q/q, +7.5% y/y; Another mid-digit inflation gain likely in 2025 - MyHome.ie report
Norway:
Government's forecast in Budget 2025 include GDP 2024 +1.1%, 2025 +2.1% and 2026 +1.2% - release
UK:
Company news:
Notable Gainers
+24.8% IMMNOV.SS (Immunovia) -- acquires all blood samples required to clinically validate its next-generation test for pancreatic cancer
+17.4% HNSA.SS (Hansa Biopharma) -- positive results from a 12-month follow up analysis from the NICE-01 trial of HNSA-5487
+15.0% BGBIO.NO (BerGenBio) -- preliminary safety data from Phase 1B portion of the BGBC016 study in first-line NSCLC patients
+12.4% PDL.LN (Petra Diamonds) -- sale of Blue Diamond Mines to Koffiefontein Holdings
+9.9% FDP.LN (FD Technologies) -- sale of First Derivative Business to EPAM Systems for E.V. of £230M
+6.0% ORSTED.DC (Ørsted) -- Equinor (EQNR.NO) acquires 41.2M shares corresponding to 9.8% of shares and votes in company
-3.4% EQNR.NO (Equinor)
+4.7% JEN.GR (Jenoptik) -- buy from hold at Deutsche Bank
+4.2% BRNK.GR (Branicks Group) -- repays VIB bridge financing
+4.0% RUI.FP (Rubis) -- €50M share buyback program
+3.1% CLAS.B.SS (Clas Ohlson) -- Sep sales (ex acquired Spares Group) +4% to SEK793M
+2.8% FUM.LN (Futura Medical) -- to receive $5.0M milestone payment
+2.5% POS.AV (PORR) -- to carry out share buyback program for maximum of ~786K (€15M)
+2.1% SHEL.LN (Shell) -- Q3 integrated gas production of 920-960 kboe/d
+2.1% CFR.SW (Richemont) -- Mytheresa (MYTE) to acquire YOOX NET-A-PORTER in exchange for a 33% equity stake in Mytheresa
+2.1% IPO.LN (IP Group) -- extends buyback program until 31-Dec-24
+1.8% NEXI.IM (Nexi) -- and UniCredit reach agreement on payments deal -- Corriere
+1.7% BRG.NO (Borregaard) -- buy from hold at Berenberg
+1.3% HEI.GR (Heidelberg Materials) -- Adani Group in discussions to acquire Heidelberg's India (500292.IN) cement business - Economic Times
+1.2% ECK.LN (Eckoh) -- to receive £2.25M following favourable settlement in patent dispute
Notable Decliners
-5.7% KOJAMO.FH (Kojamo) -- CEO Jani Nieminen steps down; appoints CFO Erik Hjelt as interim CEO
-5.5% TPE.GR (PVA TePla) -- hold from buy at Jefferies
-4.8% TIETO.FH (Tietoevry) -- underperform from neutral ay BofA; short-term recommendation downgraded to sell from hold at Handelsbanken
-3.8% KNOW.SS (Knowit) short-term recommendation downgraded to sell from hold ay Handelsbanken
-3.3% ATE.FP (Alten) -- underperform from buy at BofA
-3.1% FXPO.LN (Ferrexpo) -- Q3 total commercial production 1.40M tonnes, (16.4%) q/q
-3.1% TKA.GR (ThyssenKrupp) -- could potentially cancel its multi-billion dollar flagship project to convert steel mills to green steel using hydrogen -- Handelsblatt
-2.7% UBI.FP (Ubisoft Entertainment) -- notes recent press rumours regarding potential interest around the company; shares reversed initial modest gains
-2.4% ZIL2.GR (Elringklinger) -- to record non-cash impairment losses relating to the sale of two businesses; adjusts FY guidance for the sale of the two companies
-2.4% BAKKA.NO (Bakkafrost) -- hold from buy at DnB Markets
-2.2% GRI.LN (Grainger) -- post-close trading update: reports like-for-like PRS rental growth 6.3%; REIT conversion remains on track for Oct-25
-2.1% MUL.LN (Mulberry Group) -- issues offer update
+0.8% FRAS.LN (Frasers Group)
-1.8% LSG.NO (Lerøy Seafood Group) -- Q3 total harvest volume of salmon and trout 51.4K GWT, ex volumes from Scottish Seafarms
-1.5% AGR.LN (Assura) -- H1 Trading Update: portfolio now stands at 625 properties with annualised rent roll of £179.1M
-1.4% SRE.LN (Sirius Real Estate) -- H1 LFL rent roll +5.5% y/y
-1.4% SBB.B.SS (Samhällsbyggnadsbolaget i Norden) -- subsidiary Sveafastigheter sets indicative price range of SEK39.5-45.5/share for IPO
-1.3% SYENS.BB (Syensqo) -- hold from buy at Deutsche Bank
-1.2% EVT.GR (Evotec) -- hold from buy ay Jefferies
On earnings/updates: ANIM.IM (Anima Holding), GET.FP (Getlink)
EU companies reporting tomorrow:
Trading Update: OMV (OMV.AV), The UNITE Group (UTG.LN), Imperial Brands (IMB.LN), Kid (KID.NO)
Traffic: Finnair (FIA1S.FH)
CMD/events: Delivery Hero (DHER.GR), Duetz (DEZ.GR), Kerry Group (KRZ.ID)
Data:
Economics:
Denmark Aug manufacturing production (4.8%) m/m vs consensus (4.6%), prior revised +7.6% from +7.3%
Germany Aug factory orders (5.8%) m/m vs consensus (2.0%), prior revised +3.9% from +2.9%
Norway Aug manufacturing production (1.1%) m/m vs consensus (1.0%), prior revised +2.1% from +2.0%
UK Sep house price index +4.7% y/y vs consensus +5.1%, prior +4.3%; +0.3% m/m vs consensus +0.2%, prior +0.3% - Halifax
Eurozone
Aug retail sales +0.8% y/y vs consensus +0.9%, prior (0.1%); +0.2% m/m vs consensus +0.2%, prior revised 0.0% from +0.1%
Oct investor confidence (13.8) vs consensus (14.6), prior (15.4) - Sentix
Markets:
WTI Crude (Nov 24): +$2.18 or +2.93% to $76.56
€-$ +0.0008 or +0.07% to 1.0976
£-$ (0.0033) or (0.25%) to 1.3083
€-£ +0.0029 to 0.8391
S&P 500 (0.26%)
Performance year-to-date:
FTSE 100: +7.38%
DAX: +14.04%
CAC: +0.44%
MIB: +11.34%
Stoxx 600: +8.45%
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