>>> What to look at today - 24th of October 2024

Asian equities retreated as concerns about China’s economy and a tight US presidential election dented sentiment. The yen halted a three-day drop. Shares in China, Hong Kong and South Korea fell while US stock futures advanced. Japan’s Finance Minister Katsunobu Kato said he sees one-sided, rapid moves in the currency market after the yen slumped over 1% against the dollar on Wednesday. Benchmark 10-year US yields dropped three basis points, largely erasing the prior session’s increase when it hit the highest level in almost three months. A dollar gauge fell while oil prices rebounded after retreating on Wednesday as traders assessed tensions in the Middle East and the outlook for market balances heading into 2025.  In the US, the presidential contest between Donald Trump and Kamala Harris could hardly be tighter, with the candidates statistically tied among likely voters in each of the seven swing states in the Bloomberg News/Morning Consult poll. Regional equities have lost momentum after rallying 5% in September as traders weigh the risks including concerns about whether China’s recent stimulus blitz is enough to revive growth. The pace of Federal Reserve easing is also on investors’ radar, with swap traders now less than 100% certain of rate cuts over the two remaining policy meetings this year. Elsewhere, Taiwan Semiconductor Manufacturing Co. halted shipments to a client after discovering that chips made for that client ended up with Huawei Technology Co., potentially violating US sanctions. In South Korea, SK Hynix Inc.’s shares gained after the firm posted record quarterly profit and revenue. Over in Hong Kong, Horizon Robotics Inc.’s shares jumped nearly 38% over the issue price in their trading debut, adding to optimism over a revival in initial public offerings in the Asian financial hub. A pullback in US and Asia-based tech and artificial intelligence companies has opened up an attractive entry point, Julia Wang, executive director and global market strategist at JPMorgan Private Bank, said on Bloomberg Television. In commodities, gold edged higher after falling by the most in 11 weeks on Wednesday on higher US bond yields and profit-taking near record-high levels. US After Hours TSLA +11.6%, WHR +3.8%, PTEN +3.2%, LVS +2.4% higher on earnings; MC -22.3%, ICLR -16.7%, CYH -9.9%, SLM -6.1%, PI -5% lower on earnings.

Nikkei +0.16% Hang Seng -1.39% CSI -1.23% Shanghai -0.90% Shenzen -1.01%

Eur$ 1.0791 CNH 7.1215 CNY 7.1134 JPY 152.33 GBP 1.2927 CHF 0.8660 RUB 96.0205 TRY 34.2735 WTI$ 71.65 Gold 2,728 +0.46% BTC 67,357 +1.15% ETH 2,551 +1.54%

S&P +0.19% Nasdaq +0.51% EuroStoxx +0.06% FTSE +0.27% Dax -0.02% SMI +0.12%

Macro :
- DAX Will Underperform if Trump Wins, JPMorgan Strategists Say
- Italy’s Tax Inflows to Get €4 Billion Uplift From Bank Measures

Keep an eye on :
- AAD GY : Amadeus Fire 9M Revenue EU337.7M Vs. EU331.5M Y/y
- ALFA SS : Alfa Laval 3Q Adjusted Ebita Misses Estimates
- ALTR US : Siemens Is Said in Talks to Acquire Software Group Altair
- AAPL US : Apple Shares Fall as Analyst Says IPhone 16 Orders Were Reduced
- ATO FP : Atos 3Q Revenue EU2.31B Vs. EU2.58B Y/y
- AXFO SS : Axfood 3Q Operating Profit Misses Estimates
- AZE BB : Azelis 3Q Revenue Misses Estimates
- BARC LN : *BARCLAYS 3Q INVESTMENT BANK REV. GBP2.85B, EST. GBP2.85B
- BEI GY : Beiersdorf 9M Organic Sales +6.5%
- BETSB SS : Betsson 3Q Revenue Beats Estimates, Betsson 3Q Oper. Profit Beats Ests.; 4Q Off to 'Positive Start'
- BESI NA : BE Semiconductor 3Q Orders Misses Estimates
- BHG SS : BHG Group 3Q Sales Meets Estimates
- BB FP : BIC 3Q Net Sales Meets Estimates
- BILL SS : Billerud 3Q Adjusted Ebitda Beats Estimates
- BONAVA SS : Bonava 3Q Operating Loss SEK258M, Est. Loss SEK39.4M
- BUCN SW : Bucher 9M Sales CHF2.42B Vs. CHF2.73B Y/y
- BVI FP : Bureau Veritas Revenue Beats, Guidance Boosted: Street Wrap
- CPRI US : Capri Holdings Weighs Options for Versace: Corriere
- CA FP : Carrefour 3Q LFL Sales Ex-Fuel, Ex-Calendar Beats Estimates
- CBK GY *COMMERZBANK FAILS TO REVIVE WELLS FARGO RMBS CLAIMS ON APPEAL
- COOR SS : Coor 3Q Net Sales Misses Estimates
- CLARI FP : Clariane Maintains FY Organic Revenue Forecast
- BN FP : Danone 3Q Like-for-Like Sales Beats Estimates
- DSYFP : Dassault Systemes Cuts FY Non-IFRS Rev Ex-FX Forecast
- EBUS NA : Ebusco to Outsource Production in Turnaround Plan
- EDEN FP : Edenred 3Q Operating Revenue Misses Estimates
- ELK NO : Elkem 3Q Ebitda Beats Estimates
- ENEA SS : Enea Raised to Buy at ABG; PT 130 kronor
- ENI IM : KKR to Take 25% Stake in Eni’s Enilive for €2.94b
- EQNR NO : Equinor 3Q Adjusted Operating Income After Tax Beats Estimates
- ERA FP : Eramet 3Q Sales EU809M Vs. EU980M Y/y, Eramet Buys Back Tsingshan Stake in Eramine
- EVO SS : Evolution 3Q Ebitda Beats Estimates, Evolution Sees FY Ebitda Margin Below 69% to 71%, Saw 69% to 71%
- FSKRS FH : Fiskars 3Q Comparable Ebit Beats Estimates, Fiskars 3Q Comparable Ebit Beats Estimates, Fiskars Plans to Split in Two, Changes Units’ Leadership
- GALD SW : Galderma Sees FY Net Sales Growth +8.8% to +9.5%
- GRNG SS : Granges 3Q Adjusted Operating Profit Meets Estimates
- RMS FP : *HERMES 3Q SALES AT CONSTANT FX +11.3%, EST. +10.5%
- HOLMB SS : Holmen 3Q Operating Profit Beats Estimates
- HUH1V FH : Huhtamaki 3Q Adjusted Ebit Meets Estimates
- IBM US : IBM 3Q Revenue Meets Estimates: Snapshot
- IFCN SW : Inficon Narrows FY Sales Forecast, Misses Estimates
- IPS FP : Ipsos 3Q Organic Revenue -0.1%
- KER FP : Kering Sees FY Recurring Oper Income About EU2.5B, Est. EU2.82B
- KNEBV FH : Kone 3Q Orders Beats Estimates, Kone Narrows FY Adjusted Ebit Margin Forecast
- LIAB SS : Lindab 3Q Operating Profit Misses Estimates
- LONN SW : Lonza Says 3Q Performance in Line With Confirmed FY Outlook
- MDM FP : Maisons du Monde 3Q Sales EU213.5M Vs. EU252.3M Y/y
- MT US : Mattel 3Q Adjusted EPS Beats Estimates
- METSO FH : Metso Names Sami Takaluoma as New CEO
- ML FP : Michelin FY Total Segment Oper Income Forecast Misses Estimates
- MIPS SS : Mips 3Q Net Sales Beats Estimates
- MTGB SS : MTG 3Q Net Sales Misses Estimates
- MTX GY : MTU Aero 3Q Adjusted Ebit Beats Estimates
- NESTE FH : Neste 3Q Adjusted Ebitda Misses Estimates
- NOD NO : Nordic Semiconductor 3Q Revenue Meets Estimates
- NHY NO : Norsk Hydro 3Q Adjusted Ebitda Beats Estimates
- ONTEX BB : Ontex Sees FY Like-for-Like Sales +2% to +3%
- ONWD BB : Onward Medical Share Offering Prices at €5/Share: Terms
- OVH FP : OVH FY Adjusted Ebitda Beats Estimates
- PNDXB SS : Pandox 3Q Ebitda Misses Estimates
- PTON US : Shares of Peloton surge 11% after David Einhorn says stock is significantly undervalued
- PHARM NA : Pharming 3Q Revenue $74.8M Vs. $66.7M Y/y
- RNO FP : Renault Maintains FY Operating Margin Forecast
- RESURS SS : Resurs Bank Increases ABS Financing With JPMorgan to SEK4B
- SPM IM : Saipem 3Q Revenue Beats Estimates, Saipem Orders Strong, Consensus Estimates May Rise: Street Wrap
- SEBA SS : SEB 3Q Net Interest Income Misses Estimates (1)
- SDRL US : Transocean Is Said to Discuss Merger With Rival Seadrill, *SEADRILL SHARES GAIN 5.7% POSTMARKET
- SEBA SS : SEB Starts New Share Buyback Program for SEK2.5 Bln
- SHLF NO : Shelf Drilling Gets AoC Approval for Barsk jack-up rig
- WAF GY : Siltronic 3Q Sales Beats Estimates
- 000660 KS : SK Hynix Posts Record Profit After AI Demand Powers On
- SOBI SS : Sobi 3Q Ebita Beats Estimates
- SW FP : Sodexo Sees 2025 Organic Revenue +5.5% to +6.5%
- SRAIL SW : Stadler Wins $129 Million Contract From Salt Lake City
- STEFB SS : Stendorren Fastigheter Considers Directed Share Issue of SEK500M
- STERV FH : Stora Enso 3Q Adjusted Ebit Misses Estimates
- SEBA SS : Sweden’s SEB Misses on Lending Profit as Rate Cuts Take Toll
- SY1 GY : Symrise FY Organic Sales Forecast Misses Estimates
- TTK GY : Takkt 3Q Sales EU269.0M
- TELIA SS : Telia 3Q Adjusted Ebitda Beats Estimates
- TEMN SW : Temenos Sees FY Annual Recurring Revenue +11% to +12%
- TSLA US : Tesla Kicks Off Magnificent Seven Earnings With a Beat Tesla 3Q Adjusted EPS Beats Estimates: Snapshot
- TGS NO : TGS 4Q Dividend per Share Forecast Matches Estimates
- TRELB SS : Trelleborg 3Q Adj. Ebita Misses; Sees Slightly Lower 4Q Demand
- UBER US : Uber, Lyft Shares Slide on Tesla’s Plans for Ridehailing in 2025
- UBSG SW : Ermotti Says UBS Is Thinking About What’s Next After CS Merger
- ULVR LN : *UNILEVER 3Q UNDERLYING SALES +4.5%, EST. +4.25%
- VASTN NA : Vastned 3Q Occupancy 98% Vs. 98.6% Q/Q
- VKTX US : Viking Therapeutics Reports Third Quarter 2024 Financial Results and Provides Corporate Update
- VIMIAN SS : Vimian 3Q Revenue Meets Estimates
- VIS SM : Viscofan 3Q Net Income Misses Estimates
- VLTSA FP : Voltalia 3Q Revenue EU131.1M
- WIHL SS : Wihlborgs 3Q Income From Property Management Misses Estimates

>>> Europe : Brokers Upgrades & Downgrades - 24th of October 2024

>>> Up
* Allegro Raised to Buy at Citi; PT 42 zloty
* Atlas Copco Raised to Buy at Pareto Securities; PT 200 kronor
* Atria Raised to Buy at Inderes; PT 13 euros
* DBV Tech ADRs PT Raised to $7 from $5 at HC Wainwright
* Dowlais Raised to Neutral at Citi; PT 58 pence
* Kuehne + Nagel Raised to Hold at Research Partners
* SwedenCare Raised to Buy at SEB Equities; PT 52 kronor
* Tomra Raised to Buy at Jyske Bank; PT 170 kroner
* WithSecure Raised to Buy at Inderes; PT 1.10 euros

>>> Down
* Impax Asset Cut to Hold at Investec; PT 396 pence
* Michelin Cut to Hold at HSBC; PT 36 euros
* L'Oreal Cut to Hold at DZ Bank; PT 380 euros
* Storebrand Cut to Hold at Nordea
* Thule Cut to Hold at Pareto Securities; PT 350 kronor

>>> Initiation
* Telefonica Deutschland Rated New Buy at First Berlin; PT 3 euros
* Mendus Rated New Buy at Pareto Securities; PT 14 kronor
* Quilter Rated New Buy at Jefferies; PT 175 pence

>>> Call
* DAX Will Underperform if Trump Wins, JPMorgan Strategists Say

FT : Meet Joelle Pineau: shaping AI as the world grapples with its potential

Meet Joelle Pineau: shaping AI as the world grapples with its potential
Meta’s head of research into the technology explains the career path that led to weighing questions on society’s future

Joelle Pineau first encountered the concept of bias in artificial intelligence a quarter of a century ago as a student at the University of Waterloo, Ontario. She had been recruited to a project at the university to help train a voice recognition system for helicopter pilots.

To build an unbiased system, they wanted female pilots to train the technology but could not find any available. So it was Pineau, an engineering graduate, sitting next to a pilot in the cockpit, whose voice was recorded to help train the system on the stress levels a pilot might typically experience.

“I embraced the challenge,” she recalls. “It was very rigorous science, this experience of calling out bias in your data and finding a solution around it. Not that we had enough [of a] sample to really make a strong case but, at least, we could have a measure of the bias and the performance of the system to report on the gap.”

Pineau, now 49, is speaking virtually from a room in Meta’s New York offices, named “Reproducible Research”. She is now vice-president of AI research at Meta, the tech company that owns Facebook, Instagram and WhatsApp.

Meta is a leader in the development of AI. Its Fundamental AI Research (Fair) lab conducts Meta’s long-term research and aims to achieve scientific breakthroughs in the tech, which are implemented into its products across platforms.

Chief executive Mark Zuckerberg has outlined his vision to build artificial general intelligence — where systems have a level of intelligence equal to most humans. Meta says it wants to build this on open source, making the tech readily available to developers and academics instead of behind closed proprietary systems.

Llama, its series of open-source large language models, rivals closed models from competitors such as OpenAI, Google and Anthropic. It has been used in Meta AI, an interface that users can chat with in WhatsApp and Facebook, as well as for image generation.

Meta’s advanced research is done via Fair, where Pineau leads around 1,000 people across 10 locations. “It is a big responsibility,” she says. “Sometimes, I see things in our research lab, and then it’s just a few months before it’s in the hands of millions, if not billions, of people.”

What was the pathway from budding musician and maths whizz to shaping some of the most powerful technology in the world?

Pineau’s fascination with complex subjects was born from a love of maths “from a very young age”, she says. “I remember being fascinated by basic mathematical concepts like the power laws or the logarithmic base.” A keen interest in music — playing piano and viola in orchestras — ultimately remained a hobby.

At 19, Pineau’s first job was working for Canada’s ministry of natural resources, building models relating to solar energy in fish farms. Later, she worked at a fire research lab in her home town, Ottawa. She has a PhD in robotics from Carnegie Mellon University, where she built roving robots that could detect and navigate obstacles and assistants for nursing homes.

It was then that she discovered AI and machine learning, building algorithms and conversational chatbots — primers for the advanced technology behind Meta AI and Microsoft-backed OpenAI’s ChatGPT bot, today. “It was very primitive at the time, the late 1990s, but it was fun.”

While teaching computer science at McGill University, Montreal, “there came a time when it was pretty obvious that a lot of the biggest innovation in AI was going to happen in industry”, Pineau says. So, in 2017, she joined Meta, then known as Facebook, to open its Fair lab in Canada, alongside existing labs in Paris and New York.

“I jumped in with curiosity as to what you can do in research when you have industry-level investment,” she says. “Meta was the only [company] that had a commitment to open science and open research. And so I didn’t bother interviewing anywhere else.”

Pineau did not set out to become a leader, she says, and acknowledges that “it is a little bit difficult to find people who both have the ability to do research and an appetite to have more management responsibility”. But she is now part of a leadership team that is more female than male.

“I didn’t hire most of these people into [Fair], but I created opportunities and supported their roles,” she says. Then she adds: “It is also easier as a woman leader to draw other women in . . . so that’s also another important part of the equation.”

During her university career, Pineau was one of 15 women in a cohort of 75 at Waterloo, and one of six in 20 in robotics at Carnegie Mellon. Today, the number of women joining the tech sector remains low and, in 2019, professional services firm Accenture found that half were leaving by age 35.

“Anything I say, you have to put through the filter of the ‘survivor bias’ . . . I’m still in this field probably because I actually had a number of quite positive experiences,” she says. Pineau cites the support she has had, over time, from a number of generous colleagues and contacts. But she was also “quite aware” of the imbalance of men and women in the field.

Pineau believes that academia has made “remarkable strides”, however, and that measures such as allowing students to specialise or change their subject during their course could help to improve gender balance.

She is still affiliated with McGill University and lives in Montreal, where playing music, running and spending time with friends outside the tech world “gives me a very different perspective” from counterparts in California.

That bit of distance, alongside a long history of working in AI, has given her valuable perspectives as the world grapples with hype and concern over the potential of this powerful technology.

“No one can really predict the future, but there is definitely a moment [happening now],” she argues. “Since the launch of ChatGPT, for the first time, every day, anyone, anywhere, can experience AI in a completely different way. Previous to that . . . it was sort of invisible.”

For Fair, there are still “a ton of open research problems” and, more broadly at Meta, questions on the product and regulation side.

“There is a lot of scrutiny but also a lot of really good, important questions that we need to decide as a society,” Pineau says. “How are we going to position ourselves? There’s no right or wrong answer. What are the ways in which we want to work together to create an environment that favours innovation, that keeps people safe, and respects the work of creators?

“We’ve got to find the right ways to weave all of that together.”

WSJ : Beirut Hospital Evacuates After Israel Accuses Hezbollah of Stashing $500

Beirut Hospital Evacuates After Israel Accuses Hezbollah of Stashing $500 Million Underneath
Lebanese health officials denied there was a bunker filled with cash and gold; Israel said the accusation is based on solid intelligence

BEIRUT—When Israeli military officials said this week that Hezbollah had stashed $500 million in gold and cash underneath a Beirut hospital, the accusation set off a scramble to evacuate the large medical facility out of fear it would be bombed.

Two days later, Al-Sahel Hospital still stands, though empty of patients and staff. And a debate is raging over whether there are any Hezbollah funds under the medical center, with Lebanese officials vehemently denying the accusation.

The Lebanese Army has launched its own investigation into the claims. U.S. Defense Secretary Lloyd Austin weighed in on Tuesday, saying Israel hadn’t provided evidence of its assertion.

Israeli officials have stood by their allegation, saying that military intelligence found the presence of the bunker full of cash and that they are certain of the finding. In the past month, Israel has shown that its intelligence has penetrated Hezbollah thoroughly, pulling off deadly attacks with explosive-laden pagers and walkie-talkies, and killing much of the group’s leadership including its top leader Hasan Nasrallah inside a bunker.

Israel said it had refrained from striking the hospital when it hit other Hezbollah-linked economic targets on Monday, which included airstrikes on a nonprofit bank linked to Hezbollah and a separate underground vault of cash and gold used by another bank linked to the group, Al-Qard Al-Hassan. Israeli officials have said they are trying to undermine the group’s finances and base of political support.

“The Israeli air force is monitoring the compound, however we will not strike the hospital itself,” Israeli military spokesman Daniel Hagari said during a news conference on Monday night.

During the news conference, Hagari showed a video that Israel created to illustrate the bunker below Al-Sahel hospital and said it includes “rooms, beds, and infrastructure for long stays and the ability to direct combat from underground,” and a vault with hundreds of millions of dollars in cash and gold.

Israeli officials told the public where to look for the money, issuing a set of instructions for where to find a tunnel shaft to what it said was a Hezbollah bunker accessible through a building adjacent to the hospital. The Israeli military hasn’t said what it intended to achieve by drawing attention to the alleged bunker.

Wall Street Journal reporters visited both Al-Sahel Hospital and one of the two adjacent buildings where the Israeli military said the tunnel could be entered. Journal reporters found the door of a nonfunctioning elevator in the basement location where Israeli officials said one entrance would be.

Fearing an impending Israeli strike on the area, workers raced to clear out buildings near the hospital on Wednesday. A group of men hauled away oxygen tanks from a clinic while another piled women’s clothing from a storefront into a motorized cart.

Al-Sahel’s director general, Dr. Mazen Alame, called the allegations about a Hezbollah bunker with money under his hospital false. He called the allegations “a direct threat not only to us but to the health system in Lebanon. It’s like dominoes. If we close, the other hospitals will start to close.”

Nearly 50 staff members, including some who had taken shelter in the hospital after fleeing their homes nearby, and about a dozen patients scrambled to leave the facility after Israel first unveiled its claim of the underground stash on Monday night, said Alame.

Alame and other hospital officials, along with half a dozen people in the area interviewed by The Wall Street Journal said they had seen no evidence of any tunnels underneath the hospital and adjacent buildings, which they said also house offices of people opposed to Hezbollah. The private hospital isn’t affiliated with Hezbollah or any other political party, and also functions as a teaching facility, Alame said.

“Hezbollah doesn’t want you to find the money, so they are likely blocking and hiding the entrance to the bunker in various ways, possibly by building walls to obscure the entrances to the bunker,” said Nadav Shoshani, another Israeli military spokesman.

Within Beirut, the claim spread further fear and anxiety in a city that has been shaken by a campaign of airstrikes that have emptied much of the southern Shiite-majority section of the city and brought down apartment blocks across the capital.

At the building next door to the hospital, which the Israeli military identified as containing an entrance to the bunker, lawyers, doctors, and others with offices in the building watched with dismay as workmen carted away clothes, files, and medical equipment on Wednesday. Strikes nearby had shattered the windows of the building, leaving shards of glass that crunched underfoot.

“This is my life’s work that’s here, and I can’t get everything out all at once,” said Diaa Eddin Zibara, a lawyer and co-owner of the building. “It’s going to be a huge loss even if I can get some valuables out.”

The Israeli claims came as pressure is mounting on the Lebanese healthcare system as a whole. Another Israeli strike on Monday night destroyed several buildings across the street from the nearby Rafiq Hariri University Hospital, killing at least 18 people, Lebanese officials said. Rescue workers searching for missing people dug through a mountain of concrete on Wednesday. The strike blew out the windows of the nearby hospital. Rescue workers said they had found a single severed leg at the site on Wednesday.

Israel said the strike was directed at a terrorist target near the hospital and the hospital wasn’t hit. “The hospital was not targeted, and the hospital itself and its operation were not affected,” the military said.

The World Health Organization said earlier this month that it verified 23 attacks on healthcare facilities and workers since Israel intensified its military campaign in September. The attacks led to 72 deaths and 43 injuries among health workers and patients, the WHO said. In areas affected by the conflict in Lebanon, nearly half of 207 primary health centers have closed, the U.N. body said.

Brian Finucane, a former State Department official who is now a senior adviser at International Crisis Group, said the U.S. military has in recent years struck cash reserves used by Islamic State on the grounds that the money could sustain the group’s war effort because it could use it to pay fighters. The U.S. views strikes on economic and financial targets as legitimate only when there is a direct connection to a war-sustaining activity, he said.

“Israel has not provided enough information about the nature of these funds or how they would be used,” he said. “They’ve got a lot of work to do to establish that this stuff is there and the loot, if it exists, meets the standard for being a lawful military objective,” he said.

FT : Tate & Lyle gave up sugar for ultra-processed food

Tate & Lyle gave up sugar for ultra-processed food
Now the UK-listed ingredients company faces a potential takeover after turning its back on its sucrose origins

If you are watching your weight but fancy a McVitie’s digestive biscuit (“loved for their classic crunch, distinctive, salty-sweet wheat flavour and true Britishness”) you have more choices than before. Along with the original and chocolate varieties in UK supermarkets, there is now “the light one”, with 50 per cent more fibre and 30 per cent less sugar.

This dietary miracle was enabled by the food ingredients company Tate & Lyle, which contributed its Sta-Lite polydextrose fibre to give the biscuits a similar taste and crunch, but with fewer calories. If you ask why Tate & Lyle is helping to take sugar out of biscuits rather than putting it in, you have clearly not been concentrating.

Never mind digestive biscuits, Tate & Lyle has itself gone through an extraordinary transformation in the past 15 years, with few of its old ingredients left. The company known in the UK for refined cane sugar and Lyle’s Golden Syrup has turned its back on sucrose for stranger things. 

This is confusing, given that its founding business has carried on operating under the name Tate & Lyle Sugars since being sold to American Sugar Refining in 2010. Companies often diversify from their roots: Shell no longer imports seashells, for example. But few go so far as to attack their original products.

Tate & Lyle’s journey from sugar producer to sugar reducer has been a long haul. It moved into sucralose, sold its corn-based sweeteners and starches division in the Americas, and this year paid $1.8bn for CP Kelco, a US producer of pectin and speciality gums. It once refined cane sugar, but now calls itself “a global leader in sweetening, mouthfeel and fortification”.

Whether the reformulation was worth the effort is another matter. Its two-decade hunt for higher-margin growth has had rather underwhelming results. It was one of the founder constituents of the FT-30 index in 1935 but its life as a public company may soon end: the FT disclosed last week Advent International, a US private equity company, is preparing a takeover offer.

Tate & Lyle would not be too big a bite for Advent, given that its market capitalisation before this news was only £2.8bn. It has experienced rushes of investor enthusiasm over the years: one emerged and fizzled two decades ago over the potential of its Splenda brand of sucralose. But it has been expecting a higher valuation for longer than Vladimir and Estragon waited for Godot in Samuel Beckett’s play.

This is partly an identity problem. It is listed in the UK, where the brands it licenses to Tate & Lyle Sugars still have deep resonance. Lyle’s Golden Syrup had the world’s oldest unchanged branding and the sugar company provoked a furore this year when it changed the image of a dead lion on some products to something sweeter. The founding company’s starches and fibres are only famous in industrial circles.

The underlying difficulty is that it makes ingredients for ultra-processed foods. The painful irony (made more so by the fact that Tate & Lyle Sugars’ revenues rose sharply last year due to high demand for cane sugar) is that it found its way out of one health controversy only to land in another.

Unlucky timing, perhaps, but it faces a struggle to convince investors and scientists that its new range of products is better than what it made before. It used to sound noble to help packaged food companies such as Pladis, which produces McVitie’s biscuits, remove fats, salt and sugar and add nutrients and fibre. This manoeuvre now comes under the banner of ultra-processing.

Tate & Lyle insists that it is improving packaged brands: Nick Hampton, chief executive, calls the backlash “a big opportunity for our business”. It says making low-sugar products more palatable and giving them longer shelf lives contributes to good health, albeit they are processed. Pectins can keep fruit compotes in low-fat supermarket yoghurts stable, for example.

The company may have a point. Many studies have found that ultra-processed foods are bad for health, but some suggest that most harm is done by specific ingredients rather than by processing itself. Martin Warren, chief scientist of the Quadram Institute, says it is a “step in the right direction” to make such foods more nutritious, as long as they do not displace fresh stuff.

But Tate & Lyle is in a strange position, years after dropping sugar. Its competitors are much larger ingredient companies such as the Swiss-Dutch DSM-Firmenich and Ireland’s Kerry Group. Advent’s interest is an opportunistic tilt at a cheap UK enterprise but it reflects the reality that Tate & Lyle is best known for the past. Its fibres may be in your biscuit, but you would never know.

FT : Commercial property’s moment of truth

Commercial property’s moment of truth
Interest rates have peaked and activity in several sectors is picking up, but some fear bad news is still to emerge

Citypoint was the City of London’s first skyscraper. When it was built in the 1960s, as an office for British Petroleum, it was the tallest building completed in the square mile since St Paul’s Cathedral in 1710.

Today, the tower near Moorgate station is again leading the market in City real estate — but in a different way.

Brookfield, the Canadian investment group, last month put Citypoint on the market, seeking offers over £500mn. If it sells, it would be the largest office building to change hands in the City in more than two years.

The hiatus in dealmaking has been the main outward symptom of a downturn in commercial real estate that began after interest rates started to rise in March 2022. Higher rates make the debt that is the lifeblood of real estate deals much more expensive.

Prices across commercial property, a category that includes shops, offices, hotels and warehouses, have fallen about 20 per cent from their peak in 2022, analysts estimate.

But predictions of a crash akin to the one that followed the 2008-10 financial crisis have so far not materialised. Relatively few buildings in distress have surfaced, and only a handful of lenders have been hit by bad loans.

The question is whether the storm is now over for the battered commercial property sector, or the worst is yet to come. Lagging valuations mean investors and lenders can avoid facing up to bad news about falling property value immediately. Financial damage from the downturn may emerge for years after the market starts to recover.


The lack of deals has made it harder for valuers to pin down exactly what properties across the multi-trillion-dollar market are worth. In parts of the sector, like big London offices, there is scant market evidence.

Citypoint was last independently appraised for its lenders in March 2023 at £670mn. But rating agency S&P put its value at £431mn in August, down from £457mn in autumn 2023. The key issue is whether it can sell for more than the roughly £460mn of debt secured against the building.

The Citypoint sale is comparatively transparent because of its high profile and the disclosures required for the commercial mortgage-backed securities linked to the building.

But some investors warn there are worse realities lurking within unsold portfolios. “The beauty of our industry is that it is so opaque and inconsistent,” says one senior executive at a private equity group.

“Some managers will be more honest. And some have been more optimistic. I think it’s all over the place. And we won’t really know until the transaction volume picks back up.”

Not all property investors conduct third-party valuations like the one applied to Citypoint, relying instead on their own appraisals.

Hamid Moghadam, chief executive of Prologis, the largest US-listed commercial landlord managing around $200bn, says some managers are posting “phoney baloney” returns because they have not written down property values to reflect market reality during the downturn.

“The strategy in that case is just to hold your breath long enough that values come back and you never have to write it down,” he adds. “But I don’t think that is the right way of treating your investors.”

Any investors who are “holding their breath” on old valuations will be running out of air. Now that interest rates seem to have peaked, dealmaking is picking up. Other large London office buildings, including one known as the “Can of Ham” owing to its distinctive shape, are also now on the market. Larger portfolios of warehouses, retail parks and apartments are changing hands.

This resurgence will be welcomed by those who want to realise their investments or hope to buy at discounted prices. But it also brings a moment of truth on pricing.

Peter Papadakos, head of European research at advisory firm Green Street, says values will become clear as more properties are pushed on to the open market.

“That is where the truth comes out,” he adds.

Brookfield has brought Citypoint to market in part because the debt against the building, which was extended last Christmas at a higher interest rate, falls due in January.

The building is also owned by a fund within the group that dates back to 2012 and is largely selling its remaining assets. Overall, the fund has reported strong performance, with a realised 18 per cent net internal rate of return — an industry measure of annual returns. Brookfield declined to comment on how it valued the building for fund investors.

The Canadian group, which also co-owns London’s Canary Wharf and flagship offices in Manhattan, has invested around £40mn improving Citypoint, boosting its occupancy rate to around 90 per cent and securing better rents.

It is trying to sell at a challenging time.

Transaction volumes globally fell 45 per cent from 2022 to 2023 and have since flatlined at the lowest levels in a decade, according to MSCI. Its analysts said deals had been held up by “a mismatch in buyer and seller pricing expectations that must narrow further for liquidity to return”.

In the US, MSCI’s measure of property-related financial distress reached nearly $100bn in June, but remained far short of the almost $200bn recorded at the previous peak in 2010. “Do not go get your ‘I Survived the Great Pricing Reset’ T-shirt quite yet,” MSCI analysts wrote.

Investors also debate whether current pricing in markets hit by the shock of higher borrowing costs and geopolitical events is the best way to measure an asset’s long-term value.

Green Street estimates that across the industry many real estate investment trusts and institutional funds are still valuing their properties at roughly 10-15 per cent over what could be achieved right now.

The picture varies widely. In areas like apartment blocks, warehouses and some retail properties, rising rents and customer demand are giving investors confidence. Offices are more troubled, partly because of uncertainty about the level of demand in a post-pandemic world of hybrid working. But values also vary hugely depending on location, age and quality.

Scrutiny over valuations has been felt acutely by a few large investment trusts managed by property giants including Blackstone and Starwood Capital.

During the pandemic, the two famed investment groups were the most successful on Wall Street in attracting investment from wealthy individuals using private funds that offered limited opportunity for withdrawals.

Their two funds, Blackstone Real Estate Income Trust and Starwood Real Estate Income Trust, collectively attracted over $60bn between 2017 and 2022, and went on a buying spree that peaked in 2020 and 2021 when property values were high and interest rates were near zero.

Both Breit and Sreit have considerable leeway when it comes to valuing assets and were slow to mark down property values when interest rates began to rise quickly in 2022.

But fund investors formed their own views, pulling about $20bn out of both funds since late 2022 and forcing managers to limit redemptions in order to conserve cash and reduce the amount of property they had to sell.

Blackstone’s executives offloaded some of Breit’s most profitable assets, including a stake in the Bellagio Hotel in Las Vegas. The vehicle also secured $4.5bn of new investment from the University of California in early 2023 to bolster liquidity and avert a fire sale. But the return guarantees it promised the university have created a $751mn liability on Blackstone’s balance sheet.

Since 2022, Blackstone has sold $27bn of property at an average premium of 4 per cent to carrying value. In recent months, redemptions have slowed sharply and Blackstone has paid out investors’ requests in full. President Jonathan Gray said this month the fund was on track to begin drawing new money again.

The company said the semi-liquid structure of Breit had worked as intended. It added that rising prices, falling debt costs and lower levels of new construction activity “all point to a continuing recovery in commercial real estate”.


Starwood sold fewer properties, because founder Barry Sternlicht believed real estate markets were in panic mode. To meet about $5bn in redemption requests, Starwood sold $2.8bn of assets but also used internal cash and drew down almost all of a $1.5bn credit line.

Starwood was able to sell its properties “within 2 per cent of Sreit’s gross carrying values”, it has told investors, implying about a 4 per cent discount to their marks when including debt.

But by paying back investors with its own cash, Starwood has depleted its coffers and in May was forced to restrict quarterly redemptions from up to 5 per cent of the fund’s net assets to just 1 per cent. The move caused a furore among Sreit’s investors.

In September, Sreit met just 4 per cent of redemption requests, according to public filings. Investors had placed orders to withdraw nearly $780mn from the $9.4bn fund last month but received just $31mn in cash, the filings state.

The fund has begun marketing properties like apartments and logistics facilities in recent weeks, say two people familiar with the matter, adding that it has received some price indications above the most recent valuations.

The company declined to comment, but Sternlicht previously told investors that redemption restrictions on Sreit could last into mid-2025 “in anticipation of a lower interest rate environment and an improved real estate capital markets picture”.

It will probably take years for real estate pricing, and the damage to investors and lenders, to fully shake out.

On the plus side, lower overall debt levels going into this reset in pricing have made the sector more resilient compared with the years after the 2008 financial crisis.

Lenders’ attitudes and tolerance towards bad loans and troubled properties are the key factors in whether managers can ride out the downturn without ever having to fully address the trough in property values.

“We are never going to see a large enough quantum of distressed sales that the volume of distressed sales itself will impact on the overall pricing of commercial real estate,” says Green Street’s Papadakos.

“In the [global financial crisis] we did have a lot of distressed sales that cascaded those values even deeper into the red.

“This time, the valuations will trickle down to flat for a long time. Maybe for 24 to 36 months,” he adds. The recovery will be “protracted . . . because no one is forced to do anything”.

In the UK, nearly 80 per cent of property loans had a loan-to-value ratio below 60 per cent, according to Bayes Business School’s mid-year report. Default rates have risen, but only to 2-4 per cent on bank loans and 14 per cent for debt funds set up specifically to finance real estate, Bayes said.

Raimondo Amabile, co-chief executive officer of PGIM Real Estate, says lenders are showing “a lot of patience” for assets that may currently be worth less relative to the loans against them, but where there is solid income and the situation is improving as interest rates fall.

Only some subsectors are causing headaches for lenders. “Behind the scenes, there is a lot going on in the office sector. If you go to talk to the banks, there is a lot — 90 per cent [of actual or potential distress] is office and the other 10 per cent is struggling retail,” he says.

“Is this going to generate a huge wave of distress in the market? No,” he reasons, because these troubled assets are too small a part of commercial real estate overall.

Mark Carney, the former Bank of England governor, told the FT this month that post-financial crisis regulations meant that banks were stronger and real estate risks were less concentrated.

“When there have been hits . . . it is more broadly diversified,” he said. “There are pockets of more acute risk in commercial real estate. I think those are increasingly recognised and marked.”


Property values are stabilising, and beginning to rise in some sectors like US residential properties and European logistics. Most investors expect that positive trend will gather momentum as more interest rate cuts come through.

One big risk to that recovery is a divergence between central bank interest rates and actual borrowing costs. Baseline borrowing costs in major financial markets have risen in the past month, even though policy rates have remained unchanged or fallen.

Blackstone’s Gray previously told the FT that a significant risk to real estate would be if the large scale of government deficits around the world led to a rise in the cost of capital “separate and apart from inflation”.

“This recovery would take longer if you [had] that,” he said.

Debt repayment deadlines are not the only factor pushing properties on to the market. Investment managers, especially those with time-limited funds, are under increasing pressure to return cash to their investors.

Papadakos says many managers “need desperately” to exit, especially if they are trying to raise a new fund. “If you go around asking a pension fund for £500mn, they will probably tell you: ‘give me [back] the £350mn that I gave you in 2021’,” he says.

Selling can be double-edged if the price agreed implies a mark down to the rest of the portfolio. Under pressure from lenders and investors, managers can try to sell those properties that will change hands at or close to their book value.

Provided borrowing costs remain stable or decline, most market analysts expect commercial real estate will not experience a squeeze akin to the one following the global financial crisis.

Amabile of PGIM predicts that many distressed loans will ultimately be sold by the banks to opportunistic funds, which buy them well below face value in the hope of recouping value later on.

“Normally, the market crashes. There are a couple of years of ‘extend and pretend’. They realise there is no solution. And then they end up in [non-performing loan] sales,” he says.

It was through a distressed debt deal that Brookfield acquired Citypoint. The building’s previous owners had paid £650mn in 2007, just before the market crashed, and defaulted on their loans in 2012. Brookfield bought the debt in 2014 and took full control of the building in 2016. The price they paid was enough for the lenders to recoup their money, according to press reporting at the time.

The building’s history is a reminder that there are winners and losers in the trading game around prime commercial properties, but the play never stops.

FT : Chinese EV and self-driving tech companies turn to IPOs for cash

Chinese EV and self-driving tech companies turn to IPOs for cash
Funding has been drying up for car start-ups in fiercely competitive domestic market

China’s electric vehicle and self-driving start-ups are heading to markets to raise cash at the risk of lower valuations, with funding drying up amid intense competition in the sector.

In Hong Kong’s biggest share sale this year for a primary listing, Horizon Robotics raised HK$5.4bn ($696mn) in an initial public offering this week.

The chipmaker for self-driving cars, backed by Alibaba, Baidu, BYD, Intel and Volkswagen, sold 1.36bn shares at HK$3.99 to value the company at $6.7bn — about 23 per cent lower than the $8.7bn it was worth based on its last funding round in December.

Horizon debuted on Thursday, with the stock initially rising 30 per cent from its offer price to $5.20, before falling back to be 10 per cent higher in midday trading at $4.38. Analysts suggested it had been boosted by Tesla’s positive earnings overnight.

But Dickie Wong, executive director of research at Hong Kong-based Kingston Securities, said market enthusiasm for the self-driving concept could just be “temporary hype”. “The IPO subscription is less about a company’s fundamentals, but more about the overall market sentiment,” said Wong, referring to a recent revival in Hong Kong’s IPO market.

A good reception from investors had seemed far from assured, with prospects for Chinese companies in the sector damped by an economic slowdown and a cut-throat market at home as well as political resistance to their products in the US and Europe. Horizon rival Black Sesame slumped 27 per cent on its Hong Kong debut in August. 

“The industry-wide reshuffle is going on . . . over the past three years, there’s been a notable decline in total net current assets of listed Chinese auto companies, which is something investors are concerned about,” said Li Jingtao, an analyst at Citic Securities. “A valuation gap sometimes appears at the IPO stage.”

Other autonomous driving start-ups Zongmu and Minieye also filed IPO prospectuses with the Hong Kong stock exchange this year, along with EV maker Hozon.

Elsewhere, self-driving tech developer Momenta and robotaxi operators WeRide and Pony.ai have successfully lobbied China’s securities regulators to allow them to list in the US. Pony.ai filed its prospectus last week to list on the Nasdaq.

Their moves come against a background of financing for start-ups working on smart car technology more than halving to Rmb45bn ($6.3bn) in 2023, from Rmb100bn in 2021, according to data from the China Industry Innovation Alliance for the Intelligent and Connected Vehicles.

“Multiple factors have contributed to the drop in investors’ enthusiasm for the sector, including a chilly venture market and an uncertain path to profitability,” said Xu Yanhua, general secretary of the industry group, at an event earlier this year. 

“Existing shareholders have piled pressure on these companies to [list their shares],” said an investor in a Chinese self-driving start-up preparing for a public offering, adding that investors have become more cautious amid China’s economic slowdown. 

Despite the discount risks, a public listing remains crucial for cash-strapped Chinese auto groups to survive in a crowded market where consolidation has been taking place.

“The situation will be difficult for new entrants, especially those that haven’t gone public yet. Cash flow pressure will naturally weed them out,” said Li from Citic Securities. 

“They are in need of a continuous cash injection,” said S&P Global Mobility analyst Lu Daokuan, pointing to the substantial losses being recorded by start-ups every year.

The Chinese government’s attitude towards the self-driving industry is “overall positive”, Lu added, noting that Beijing aims to achieve large-scale production of Level 3 autonomous vehicles by 2025 and local governments around the country are pushing to scale up deployment of robotaxi fleets on the road.

Hozon, known for its Neta brand and the only EV maker in the IPO line-up, has admitted to paying some of its staff only half their wages for September, raising questions about the company’s financial health. As of April 30, the CATL-backed automaker had assets worth Rmb10.4bn that were exceeded by Rmb12.2bn in liabilities, its prospectus showed. 

Hozon declined a request for comment. 

The performance of overseas-listed Chinese EV companies also gives little cause for optimism.

Zeekr, an electric car brand spun off from Chinese conglomerate Geely, was the latest to list its shares in New York this year, but at a valuation less than half of what the company was worth in its previous financing round. Its stock has fallen about 20 per cent since going public in May.

Chinese carmakers’ international revenues are also being threatened by political opposition in the US and Europe. Last month, the Biden administration proposed banning Chinese software and hardware for internet-connected vehicles, citing a threat to national security.

In Europe, the EU is poised to impose tariffs of up to 45 per cent on imports of Chinese EVs, mirroring similar measures by the US and Canada.

>>> US After Hours Summary: TSLA +11.6%, WHR +3.8%, PTEN +3.2%, LVS +2.4% higher

After Hours Summary: TSLA +11.6%, WHR +3.8%, PTEN +3.2%, LVS +2.4% higher on earnings; MC -22.3%, ICLR -16.7%, CYH -9.9%, SLM -6.1%, PI -5% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: TSLA +11.6%, AMTB +11.5%, MOH +11%, LC +9.9%, MXL +8.9%, FAF +8.3%, GBX +8.1%, SLP +7.4%, CLS +7.1%, GL +6.9%, PEGA +6.5%, EGBN +5.5%, QS +5.2%, RBBN +5%, CACI +4.9%, LRCX +4.8%, VKTX +4.7%, TER +4.6%, MAT +4.3%, WHR +3.8%, PTEN +3.2%, LVS +2.4%, TMUS +2.4%, VIST +2.2%, CHX +2.2%, WU +1.7%, RJF +1.6%, SEIC +1.1%, PLXS +1%, CCS +0.1%, EPRT +0.1%, SSB +0.1%

Companies trading higher in after hours in reaction to news: SDRL +9.7% (RIG and SDRL dicussing potential merger, according to Bloomberg), RIG +3.9% (RIG and SDRL dicussing potential merger, according to Bloomberg), SHEN +3.6% (increases dividend), AMSF +3.5% (declares special dividend of $3/sh), GRAL +3.4% (presents initial results from study of Galleri), MORN +2.4% (CFO to step down), DFH +2.1% (to acquire Alliant National Title Insurance), OKUR +2% (stock offering by selling shareholders), PLTR +0.8% (LHX and PLTR announce strategic partnership to accelerate LHX's digital transformation), LHX +0.7% (LHX and PLTR announce strategic partnership to accelerate LHX's digital transformation), NOC +0.7% (awarded $1.8 bln US Air Force contract modification), SNOW +0.6% (NOW and SNOW partner on zero copy integration), BA +0.4% (awarded transaction agreement with the US Space Force Space Systems), PAG +0.3% (to acquire Porsche Centre Melbourne), ESI +0.3% (exploring a potential sale, according to Bloomberg), BKD +0.2% (stock offering by selling shareholders), AWI +0.1% (increases dividend), PFE +0.1% (CDC committee votes to expand recommendation for certain pneumococcal vaccines), PATH +0.1% (transforming operations for Omega Healthcare)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: MC -22.3%, ICLR -16.7%, CYH -9.9%, SLM -6.1%, PI -5%, NEM -4.8%, CLB -3.9%, WFG -3.9%, ROL -3.5% (also names new exec chairman), URI -3.1%, GGG -3%, ORLY -2.9%, IBM -2.6%, CVBF -2.3%, AMP -2.1%, NOW -1.1% (also announces a series of partnerships with NVDA, SNOW, RMNI, DataBricks, Pearson; also introduces workflow data fabric), OII -1%, VLTO -1%, MSA -0.9%, CHDN -0.8%, CP -0.4%, TYL -0.4%, ALGN -0.3%, KNX -0.2%, EQC -0.1%, KALU -0.1%

Companies trading lower in after hours in reaction to news: ODV -21% ($50 mln private placement), BNED -9.1% (stock offering by selling shareholders), WULF -4.5% ($350 mln convertible notes offering; also authorizes new $200 mln share repurchase program), TXT -3.2% (CFO to retire, names new CFO), BRO -0.7% (increases dividend)