- Zalando (ZAL TH) +3.3%
- Zalando Upgraded to Buy at Berenberg on Positive Execution
- Ryanair (RY4C TH) +2.4%
- Equinor (DNQ TH) +1.8%
- Leonardo (FMNB TH) +1.6%
- Fincantieri to Buy Leonardo’s Wass Unit for Up to €415 Million
- Delivery Hero (DHER TH) +1.2%
- Just Eat, Peers’ Growth vs. Profit Dilemma Begs for Sector M&A
- BAT (BMT TH) +1.1%
- Norsk Hydro (NOH1 TH) +1.1%
- HelloFresh (HFG TH) +0.9%
- Vodafone (VODI TH) +0.9%
- Unilever (UNVB TH) -0.6%
- Evotec SE (EVT TH) -0.7%
- Axa (AXA TH) -0.9%
- Siemens Energy (ENR TH) -0.9%
- Gerresheimer (GXI TH) -1.1%
- Sanofi (SNW TH) -1.3%
- Novavax to Get Up to $1.2B in Covid-19 Vaccine Deal with Sanofi
- Getinge (GTN TH) -1.3%
- Getinge Cut to Hold at Nordea
- Brunello Cucinelli (8BU TH) -1.6%
- Brunello Cucinelli Reinstated Hold at Jefferies; PT 97 euros
- Grifols (OZTA TH) -2%
- Symrise (SY1 TH) -2.6%
- Symrise Cut to Hold at Berenberg
DAX:
- Zalando (ZAL TH) +3.9%
- Zalando Upgraded to Buy at Berenberg on Positive Execution
- Continental (CON TH) +1.1%
- Daimler Truck (DTG TH) +0.9%
- Fresenius SE (FRE TH) +0.9%
- BMW (BMW TH) +0.7%
- Siemens Energy (ENR TH) -0.8%
MDAX:
- HelloFresh (HFG TH) +1.3%
- Delivery Hero (DHER TH) +1.2%
- Freenet (FNTN TH) +1%
- K+S (SDF TH) +0.9%
- Hugo Boss (BOSS TH) +0.9%
SDAX:
- Deutsche PBB (PBB TH) +1.9%
- Deutsche PBB Consensus Now Captures Risks, Citi Upgrades
- Thyssenkrupp Nucera AG & Co KGaa (NCH2 TH) +1.9%
- Indus Holding (INH TH) +1.8%
- Deutz (DEZ TH) +0.9%
- Borussia Dortmund (BVB TH) +0.6%
- DWS (DWS TH) -0.6%
- DWS Cut to Hold at Jefferies; PT 41 euros
- PVA TePla (TPE TH) -1%
- Salzgitter (SZG TH) -1%
College anti-Israel agitators would be sent to Gaza under new House GOP bill
FIRST ON FOX: A new House Republican bill would send any person charged and convicted for illegal activity on a college campus to Gaza for at least six months.
Rep. Andy Ogles, R-Tenn., introduced the bill on Wednesday alongside Reps. Randy Weber, R-Texas, and Jeff Duncan, R-S.C., in response to the ongoing anti-Israel demonstrations on college campuses across the country.
Several of those protests have turned violent, with clashes between police and activists, as well as hundreds of activists being arrested across multiple campuses.
While Ogles’ bill text does not mention Israel or the anti-Israel groups, it specifically targets unlawful activity on college campuses after Oct. 7, 2023, when Hamas militants invaded Israel in a surprise attack that killed over 1,000 people
Those convicted would be forced to serve a minimum six-month community service sentence in Gaza, where Israel is currently waging a brutal campaign to eradicate Hamas and rescue the remaining Israelis that terrorists took hostage in October.
“Students have abandoned their classes to harass other students and disrupt campus-wide activities, including university commencement ceremonies nationwide. Enough is enough,” Ogles told Fox News Digital.
“That’s why I introduced legislation to send any person convicted of unlawful activity on the campus of an American university since October 7th, 2023, to Gaza to complete a minimum of six months of community service.”
Weber added, “If you support a terrorist organization, and you participate in unlawful activity on campuses, you should get a taste of your own medicine. I am going to bet that these pro-Hamas supporters wouldn’t last a day, but let’s give them the opportunity.”
The bill is likely to face uncertain odds in the House, where Republicans hold a razor-thin majority of just one seat. Even if it passed, the Democrat-controlled Senate will almost certainly ignore it.
It is an example, however, of the heightened tensions wracking the U.S. over Israel’s war with Hamas.
The college protests here have garnered bipartisan criticism from virtually all Republicans and a significant number of Democrats, but progressives have continued to show strong support for the students and other activists on campus.
Comments by Rep. Ilhan Omar, D-Minn., for example, referring to some Jewish students as “pro-genocide” have earned her a GOP-led censure resolution, filed by Rep. Don Bacon, R-Neb., on Tuesday.
Her fellow “Squad” member, Rep. Rashida Tlaib, D-Mich., has also been censured for her comments about Israel in the wake of Oct. 7
Sanofi-Novavax licensing deal looks to boost post-pandemic vaccine sales
Agreement worth up to $1.2bn includes plan for combined flu and Covid-19 shots
Sanofi has struck a licensing deal worth up to $1.2bn with Novavax to commercialise the struggling Covid-19 vaccine maker’s coronavirus jab and use the technology to develop its own combined shot with flu.
The partnership strengthens Sanofi, one of the world’s largest vaccine makers by sales, in the post-pandemic Covid-19 jab market, where pharmaceutical groups are increasingly focused on combined shots against two or more infectious diseases.
Under the agreement, Sanofi would lead the sales push of Novavax’s Covid-19 jab from next year in most countries worldwide and have the rights to combine the US biotech’s protein-based vaccine technology with its flu shots and other infectious disease jabs, the companies said on Friday.
Novavax will receive an upfront payment of $500mn in cash and an equity investment, and will stand to receive the remaining $700mn upon the completion of certain regulatory and development milestones.
Sanofi will take a roughly 5 per cent stake in Novavax. Novavax will also benefit from a double-digit percentage of royalties from the sales of its Covid jab as well as any combined shot using its technology, but Sanofi will take the vast majority of revenues.
“We’re excited by the prospect of combining Novavax’s adjuvanted Covid-19 vaccine that has shown high efficacy and favourable tolerability, with our rich portfolio of differentiated flu vaccines that have demonstrated superior protection against flu and its serious complications,” said Jean-François Toussaint, who heads Sanofi’s vaccine research and development.
Touissant said the combined shot would offer patients “enhanced convenience and protection against two serious respiratory viruses”. Sanofi had a Covid-19 booster vaccine approved by the European Medicines Agency in 2022 but it has struggled to make a dent in the market.
The licensing agreement caps a tumultuous period for Novavax, whose market value boomed to more than $40bn at the height of the pandemic, propelled by investor excitement over its Covid shot. But it has since fallen by almost 99 per cent.
The vaccine maker has undertaken a $1.1bn cost-cutting drive in the past year to stave off a possible bankruptcy and has faced pressure from an activist investor for a board shake-up.
Novavax suffered from a series of mis-steps with the launch of its Covid-19 vaccine, which was late to market because of a sluggish approval process. It then faced collapsing demand as governments withdrew from procurement deals.
Novavax’s vaccine, a more traditional protein-based formulation combined with an adjuvant to boost its effectiveness, has been pitched to patients as a counterpoint to mRNA jabs from BioNTech/Pfizer and Moderna that have inspired vaccine scepticism over rare side-effects. But sales have lagged.
“Novavax is now in a stronger position to refocus our efforts on leveraging our technology platform and novel adjuvant,” said John Jacobs, Novavax chief executive.
Novavax will still be allowed to press ahead with development of its combined Covid-flu shot, which is set to enter late-stage trials in the second half of this year.
>>> Up
* 3M Co Raised to Buy at HSBC; PT $115
* Bpost Raised to Hold at Jefferies; PT 3.50 euros
* Fluidra Raised to Overweight at JPMorgan; PT 24 euros
* Hexagon Composites Raised to Buy at SpareBank; PT 31 kroner
* Legrand Raised to Buy at Citi; PT 125 euros
* Melia Hotels Raised to Buy at Intermoney Valores; PT 9 euros
* Millicom GDRs Raised to Buy at ABG; PT 300 kronor
* NYAB Oyj Raised to Accumulate at Inderes; PT 55 euro cents
* Odfjell Raised to Buy at Fearnley; PT 225 kroner
* Prysmian PT Raised to 62.50 euros from 53 euros at Citi
* Tapestry Raised to Buy at CFRA; PT $47
* Tapestry Raised to Buy at CFRA; PT $47
* Warner Bros Discovery Raised to Overweight at KeyBanc; PT $11
* Zalando Raised to Buy at Berenberg; PT 29.70 euros
>>> Down
>>> Down
* Axactor Cut to Hold at Arctic Securities; PT 4.50 kroner
* BFF Bank Cut to Neutral at BNPP Exane; PT 11 euros
* BFF Bank Cut to Neutral at Mediobanca SpA; PT 11.50 euros
* Castellum Cut to Underweight at Barclays; PT 110 kronor
* Castellum Cut to Underweight at Barclays; PT 110 kronor
* DWS Cut to Hold at Jefferies; PT 41 euros
* Symrise Cut to Hold at Berenberg
* Rush Factory Cut to Sell at Inderes; PT 25 euro cents
>>> Initiation
>>> Initiation
* Brunello Cucinelli Reinstated Hold at Jefferies; PT 97 euros
* Formycon Rated New Outperform at RBC; PT 63 euros
* Getinge Cut to Hold at Nordea
* Hermes Reinstated Buy at Jefferies; PT 2,650 euros
>>> Call
* Legrand Now Past the Worst, Double-Upgraded to Buy at Citi
* Hermes Reinstated Buy at Jefferies; PT 2,650 euros
>>> Call
* Legrand Now Past the Worst, Double-Upgraded to Buy at Citi
* Melia Guidance to Prompt Upgrades, Pipeline Weaker: Jefferies
* Zalando Upgraded to Buy at Berenberg on Positive Execution
Shares in Asia rose Friday after an upbeat day on Wall Street following jobs data that supported the case for US interest-rate cuts. The MSCI Asia Pacific Index rose 0.7% as Hong Kong’s benchmark index reached its highest level since September and equities in Japan, South Korea and Australia also climbed. US contracts posted modest gains after the S&P 500 index closed less than 1% away from its all-time high on Thursday. The Hang Seng advanced following news that regulators were considering a proposal to exempt individual investors from paying taxes on dividends earned from Hong Kong stocks bought via Stock Connect. However, onshore Chinese stocks fell as investors assessed a report saying US President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs as soon as next week. Treasuries were steady, with the US 10-year yield staying around 4.45%, after support from a successful $25 billion sale of 30-year US bonds. Initial applications for US unemployment benefits rose last week to the highest level since August, topping estimates, with cooling in the jobs market supporting the case for interest rate cuts. Fed Bank of San Francisco President Mary Daly said rates are currently restraining the economy, but it may take “more time” to return inflation to their goal. Emerging market currencies were broadly higher against the greenback, extending gains from Thursday when the dollar weakened. The greenback was steady Friday while the yen was little changed at around 155 per dollar. Data set for release in Asia Friday includes industrial output for India and the first-quarter current account balance for China. New loans and money supply data for China may also be released as early as today. Elsewhere, JPMorgan Chase & Co. said it was on track to include India in its emerging market debt index from June, a move that is expected to drive inflows from global investors. Meanwhile, Oversea-Chinese Banking Corp. offered S$1.4 billion ($1 billion) to buy the remaining stake in Great Eastern Holdings Ltd. that it does not currently own, in an effort to solidify its wealth management leadership position. Oil extended gains into a third day as key technical levels provided a floor for losses while investors digested a mixed US inventories report. Gold traded slightly higher after jumping more than 1% on Thursday. To Doug Ramsey at Leuthold, another 10% gain in the S&P 500 isn’t out of the question, at least statistically. He analyzed 80 years of data on bull-market rallies, focusing on those that happened when unemployment was this low and the economic cycle this mature. If the current rally meets the prior records for length and height, the S&P 500 would end the year at 5,705. If the economy is slowing, unemployment rising, inflation receding, and the Fed is expected to cut rates, there will be plenty of buyers for US Treasury notes and bonds, according to Joe Kalish at Ned Davis Research. US After Hours Busy earnings session; NTRA +16.2%, SG +14.6%, CDNA +13.4%, GH +12.3%, SOUN +12.2% higher on earnings; PGNY -29.8%, AAOI -16.6%, FROG -15.6%, NVTS -12.6%, FIGS -10.7%, SVV -10.3% lower on earnings; MGNX -65.2% on Phase 2 data.
Nikkei +0.27% Hang Seng +2.12% CSI +0.02% Shanghai +0.03% Shenzen -0.64%
Eur$ 1.0776 CNH 7.2281 CNY 7.2249 JPY 155.62 GBP 1.2518 CHF 0.9064 RUB 92.5613 TRY 32.2658 WTI$ 79.85 +0.8% Gold 2,356 BTC ETH
S&P +0.11% Nasdaq +0.10% EuroStoxx +0.20% FTSE +0.45% Dax +0.26% SMI +0.66%
Macro :
- Bank of England’s Bailey Joins Debate on ‘Name and Shame’ Powers
- Hedge Funds Capula, Schonfeld Hire Yen Rates Traders From Banks
Keep an eye on :
- AAL LN : Botswana’s Masisi vows to protect interests in De Beers amid BHP’s Anglo bid
- AAL LN : Anglo American’s South Africa investors open to improved BHP bid
- ARM US : Arm Poised to Benefit From Apple's AI-Server Chips: React
- SAB SM : Sabadell Accuses BBVA of Breaking Rules With $12 Billion Offer
- BLNK US : Blink Charging Aims to Expand Network as Tesla Pulls Back
- BA US : Boeing 737 Makes Emergency Landing in Japan, No Injuries: Kyodo
- BP/ LN : BP Keen to Buy Tesla Supercharging Sites for US Expansion
- IAG LN : IAG 1Q Revenue Meets Estimates
- COR PL : Corticeira Amorim 1Q Net Income EU16.1M Vs. EU23.8M Y/y
- COR PL : Corticeira Amorim 1Q Net Income EU16.1M Vs. EU23.8M Y/y
- EDP PL : EDP 1Q Net Income Beats Estimates
- ENEL IM : Enel 1Q Adjusted Net Income Beats Estimates, 1Q Beats Estimates on Hydro-Power Production Increase
- XOM US : Calpers Mulls Vote Against Exxon CEO’s Re-Election to Board: FT
- SFER IM : Ferragamo 1Q Net Revenue at Constant FX Rates Misses Estimates
- FCT IM : Fincantieri to Buy Leonardo’s Wass Unit for Up to €415 Million
- ILTY IM : Illimity Bank 1Q Net Income EU10.8M Vs. EU7.8M Y/y
- LDO IM : Leonardo to Sell Sub Unit to Fincantieri for Up To €415m
- IVG IM : Iveco Boosts FY Consolidated Adj. Ebit Forecast, Beats Estimates
- MB IM : Mediobanca 3Q Net Income Beats Estimates
- MEL SM : Melia Hotels 1Q Net Income EU7.5M Vs. Loss EU0.5M Y/y
- NESN SW : Nestlé will invest R$1 billion by 2026 to expand coffee production in Brazil and projects a jump in
- PARA US : Sony and Apollo’s plan for Paramount Global includes reducing it to parts
- PEN NO : Panoro Energy Finds Oil at Hibiscus South Extension off Gabon
- PIRC IM :Pirelli 1Q Revenue Beats Estimates, Pirelli Beats, Second-Quarter Commentary Positive
- RECSI NO :REC Silicon 1Q Revenue $42.1M Vs. $40.5M Q/Q
- RENE PL : REN 1Q Net Income EU3.7M Vs. EU12.8M Y/y
- SHL GY : Siemens Healthineers to Invest More Than €290M in Oxford Plant
- TPOU LN : Third Point Redemption Offer Was Taken up in Full
- UBSG SW : UBS Weighs Bonus for Investment Bankers Who Refer Rich Clients
- US IM : UnipolSai 1Q Insurance Sales EU4.20B Vs. EU3.87B Y/y
- VGP BB : VGP Committed Annualized Rental Income at April 30 Is €376.2M
- YAR NO : Top Fertilizer Maker Nutrien Shares Climb on Demand Outlook
- 175 HK : Geely’s EV Maker Zeekr Is Said to Raise $441 Million in US IPO
Anglo American’s South Africa investors open to improved BHP bid
Shareholder stance defies government hostility to plan that would break up national champion
Anglo American’s key South African shareholders are open to a takeover offer from BHP, despite government concerns that the miner’s £30bn-plus proposal is bad for Africa’s most industrialised economy.
The investors, which collectively hold more than 15 per cent of Anglo, told the Financial Times that BHP would need to sweeten its offer, but they were not opposed in principle to an acquisition by the Australian group.
Their openness comes despite comments from mining minister Gwede Mantashe saying he was personally “negative” on the deal, which would spin off two South African subsidiaries.
London-listed Anglo has been woven into South Africa’s economy over its 107-year history, and a takeover is a sensitive matter for the ruling African National Congress in an election year. The local competition regulator has warned that it will have the final say.
But David Masondo, South Africa’s deputy finance minister and chair of the Public Investment Corporation, which owns 8.4 per cent of Anglo, said the state-owned entity was yet to take a position based on the original proposal. “We’ll need to assess any offer, and assess the value it offers”, he said. But he added that the PIC would “look favourably on a higher offer.”
Other local fund managers said the complexity of the deal structure — involving a spin-off of Anglo’s South African platinum and iron ore businesses, Amplats and Kumba — requires an even higher premium than if the whole business was being bought.
Dawid Heyl, a fund manager at Ninety One, which owns 2.1 per cent of Anglo, said that a deal along the lines proposed could be struck, but the price would have to be “substantially” higher.
“It would be easier, though, if BHP were to come back with a higher and simpler offer, which removes the conditionality of getting rid of Amplats and Kumba, which would make it trickier,” he said.
Karl Leinberger, chief investment officer at Coronation Fund Managers, which owns 1.2 per cent of Anglo, said that it would “definitely” consider a higher offer. But he cautioned that “if BHP only wants the rump of the business, for example, while leaving shareholders with the risk of the other assets, they’d have to pay more for it”.
UK-based M&G Investments, which owns 1.4 per cent of Anglo, said it too “will be supportive” if a proposed deal provides better value for its funds.
The wrangling comes as BHP is preparing a formal offer that could transform the producer of iron ore, coal and nickel into a mining supermajor, with Anglo’s coveted copper mines in Latin America as the main prize.
The call for a better bid will also test BHP’s resolve to avoid overpaying after Anglo rejected an initial proposal last month that valued it at £25 per share as “highly unattractive” for its shareholders.
BHP is unlikely to radically increase its offer in its formal bid, which is due by May 22 under UK takeover rules, and the company has limited room to go higher, according to a person familiar with the company’s thinking. Anglo’s stock is currently trading at £26.57 per share.
The deal, initially valued at £31bn, would be the mining sector’s biggest on record if successful and is a bet on the importance of copper, which is predicted to suffer shortages as demand surges for renewables, power grids and electrical cars.
Bankers speculate that the bid could come ahead of an industry event in Miami next week, which would put the spotlight on Anglo’s chief executive Duncan Wanblad.
A formal BHP offer would increase the pressure on Anglo’s management to communicate its own plan to reshape the company and regain confidence of its investors.
Some Anglo shareholders are advocating for BHP to add a cash component to the offer. Andrew Snowdowne, a fund manager at Sanlam Investments, which owns 1 per cent of Anglo, said “the inclusion of a cash component in the offer should be positively received by the market, as it helps establish a minimum acquisition price in case BHP shares decline”.
BHP is not at the stage where it will add a cash component to its offer because of the large overlap in the two companies’ shareholder bases, although it could later if necessary, according to one person familiar with BHP’s thinking. The Australian miner is also resistant to including Anglo’s South African assets as part of its bid because of their misalignment with the company strategy, according to another person.
Anglo and BHP declined to comment.
The smuggling trail keeping Russian passenger jets in the air
Sanctions have caused imports of spare parts to collapse. But airlines have found new ways to get components into the country
In July 2022, the staff at Vnukovo airport in Moscow found an unusual item in the luggage of a passenger: a piece of equipment that engineers call an “air data inertial reference unit”.
Modern passenger aircraft are packed with sophisticated technology and few devices are more delicate than these advanced pieces of avionics, which use gyroscopes and accelerometers to monitor the twists and turns.
According to paperwork that was later filed by customs officers, the item weighed 11kg and was listed as costing $40,000. It was destined for S7, Russia’s second-largest airline.
Nor was this a one-off occurrence. By the end of 2022, a further 10 ADIRUs sent in passenger luggage destined for S7 were reported in customs forms at Moscow airports.
The luggage trade is a striking example of the unorthodox supply routes that Russian airlines have been forced to rely on since the full-scale invasion of Ukraine in February 2022. Hit by sweeping sanctions and export controls, they have had to reinvent the ways they source parts in order to keep their planes in the air.
Sanctions represent a massive threat to air travel in Russia. Aircraft require continuous support and regular software upgrades, as well as a regimen of checks — and the Russian companies are now largely cut off from their suppliers. Airbus, for example, told the FT that “there is no legal way that genuine aircraft parts, documentation and services can get to Russian carriers”.
Before the war, Boeing and Airbus planes comprised more than 70 per cent of Russia’s fleet of aircraft in service. Cirium, a UK-based aviation data company, estimates that, as recently as March 2024, 87 per cent of the total hours logged by Russian airlines were in Boeing or Airbus aircraft. Even Russian-built aircraft are reliant on myriad spare parts made abroad.
So far, there are few signs that sanctions have significantly disrupted air travel within Russia. Cirium data shows that flight hours are around the prewar level.
But data collected by the FT shows that there has been a sharp drop in the amounts of components entering Russia over the past two years.
Using Russian customs data from Maxim Mironov, a professor at the IE business school in Madrid, Corisk, a risk management consultancy, and commercial sources, the FT has been able to analyse the flow of parts into Russia.
These filings, which the Russian authorities have continued to collect but which are not intended for publication, consistently show the collapse in volumes of imports both for specific components and for the Russian airline sector as a whole.
For example, the ability of S7 and its subsidiaries to obtain parts at will has been devastated — from peaks of over $100mn per month in late 2021 to well under $20mn in most months over the past two years.
Russian airlines have made up some of this shortfall by using a sprawling network of sometimes fly-by-night companies.
The country’s storied aerospace sector — replete with famous names like Sukhoi, Tupolev and Ilyushin — is currently reliant on a range of tiny artisanal suppliers, many of them based in the UAE.
Russia is also taking steps to prolong the life of foreign-made parts. Andrei Litvinov, a former Aeroflot pilot who retired after a 40-year career, told the FT: “Take, for example, the Superjet 100 [a regional passenger jet]. It’s supposed to be made out of Russian parts, but the filters . . . they’re French. And when they get clogged, they need to be replaced. But because of sanctions, now they take them off, clean them, and put them back instead.”
Concerns about Russian airline safety are growing. The International Civil Aviation Organization, the UN agency responsible for air traffic, gave Russia a “red flag” in 2022 for failing to meet its “airworthiness” criteria.
Jan-Arwed Richter, founder of Jacdec, an independent aviation safety company, says it has observed a rise in Russian incidents, but one that may be explained by improvements to its own data collection. The first effect of sanctions, he says, would be a rise in reliability problems and flight cancellations rather “than putting the safety of a flight at risk”.
Andrey Patrakov, founder of RunAvia, a Russian flight safety service, told the FT last year he had not flown with a Russian airline since March 2022. He said: “I don’t fly in Russia. I travel in Russia by train or I don’t travel at all. I fly abroad only with foreign companies. I even take those Armenian or Moldovan companies which before I used to think were a bit obscure, now I think they’re less dangerous than any of our Aeroflot planes. Or even S7.”
The aircraft maintenance industry is wide, deep and complicated. Michigan-based consultancy AeroDynamic Advisory estimates the world’s airlines spend $45bn a year on replacement parts.
But while the owner of a plane must be able to account for where the parts are from and only use certified parts, there is no requirement on manufacturers to track where products go. After servicing and certification, parts can then be restored to service on other aircraft. Retired planes can also be cut into spare parts.
There is, says Kevin Michaels, head of AeroDynamic Advisory, “a lot of inventory spread out across the globe in a lot of places”.
Russia now faces the challenge of sneaking supplies out of this pool of parts. The small company that appears to have packed that first inertial reference unit into passenger luggage has become their main supplier of this sensitive equipment.
Turboshaft, a modest Emirati business registered to a warehouse in Sharjah Airport, is a microcosm for the way that Russia is obtaining its parts. The company is run by Timur Badr, a 39-year-old Russian gym enthusiast. Born in Astrakhan, Badr’s family has lived in Dubai since he was a child. His UAE residency permit lists him as a citizen of St Kitts and Nevis.
According to customs data, Turboshaft was not listed as a supplier to S7 in the year prior to the full-scale invasion. It first appears as a supplier of the airline in May 2022, when it delivered a steel rotary valve and the “O-ring” for the flush on an Airbus toilet. Within weeks, it was sending sensitive electronics in luggage. In total, Turboshaft has shipped $1.5mn of goods to S7 since the start of the war, according to the customs documentation.
A representative of Badr told the FT that he been a supplier of S7 before the full-scale invasion, but that he had stopped selling parts to Russia in February 2022. He added that Turboshaft is “aware of, and respectful of, the international sanctions regime”.
The improvised imports of ADIRUs fits a broader pattern. Prior to the war, customs records show that 45 per cent of S7’s US-made components came from the US directly. A similar volume of American goods came via France, Germany, the UK and Netherlands.
Since then, less than 3 per cent are listed as coming from those countries. Around a tenth come from China, a fifth come from the Maldives, another fifth from Turkey and a third from the UAE. In most cases, these come from companies of similar profile to Turboshaft.
The UAE is a central hub in this trade for good reason: it has long been seen as a key location for the transnational smuggling networks which supply airline parts to Iran, whose airline industry has had to cope with a variety of sanctions regimes since 1979.
Turboshaft has itself been involved in trades involving Iran. In 2016, it bought two mothballed Airbus aircraft from the Greek government for $4.2mn. Badr sold the aircraft on, and they rapidly appeared in Iran. One of the aircraft was taken up by the sanctioned Iranian airline Mahan Air. The other eventually joined the sanctioned Syrian Air, for which it still flies.
Badr’s representative said that he bought the planes “through an auction and sold them [on]. Turboshaft FZE had no knowledge or intention as to any future use.”
Customs returns also show another entity supplying Russia — Treetops Aviation — with which Turboshaft shares a very close relationship. In some documents, Treetops has given postal addresses also used by Turboshaft. One of those addresses, in a high-rise in Dubai, was registered to Badr.
Furthermore, documents seen by the FT show Treetops was the listed source of goods provided by Badr to a US customer. A phone number used by Treetops has also been used by a relative of Badr’s.
Badr’s representative rejected these points and stated that “Turboshaft FZE legitimately traded spare parts with Treetops as part of [its] routine and legitimate business”.
Since the start of the war, Treetops has become a significant supplier to Russia. In 2023, customs documents show that it shipped $7mn of parts to S7. As the parts supply market has fractured, it has become the second largest supplier of parts to S7 — and the largest not to be directly the subject of US sanctions.
How did someone like Badr get involved in supplying Russian airlines? While the businesses involved in this trade have been transformed in the last two years, the networks that have sprung into action to supply Russia are not new.
Turboshaft itself was established in 2011. Badr used to sell parts found in Russia and Ukraine to the rest of the world, according to Dave Hansen, director of operations at Aermotive, a parts supplier in Mesa, Arizona. But there have been complaints about the quality of products Turboshaft was selling. One sale to Aermotive from 2021 led to a court case. Last year, an Arizona judge found in favour of Aermotive’s complaint that Turboshaft had sold it an alternator which proved to be unserviceable.
Hansen said: “The quality of what he was selling was terrible. That’s why we ended up in a lawsuit. He sold us engine starters that we tested and were no use except as paperweights. There was a constant concern about what he was representing.”
Since the onset of the war, Turboshaft appears to have reversed its business model; customs records suggest Turboshaft started sourcing goods abroad for shipment into Russia.
One unexplained feature of Badr’s business is his relationship with the Russian authorities. In 2020, a warrant was issued in Russia for Badr’s arrest. His warrant documentation says he is wanted for failing to declare the import of a sum of cash.
A representative for Badr said that this warrant was issued after Badr refused to pay a bribe to the Russian customs authorities. He also stated that Badr regards the Putin administration as “totalitarian”.
But customs records suggest Badr may have used his skills in the service of the Russian security state in 2022 — after the full-scale invasion of Ukraine.
A company called Black Metal FZE, which is linked to Badr, has been identified as a supplier to the Russian military by C4ADS, the Washington-based defence think-tank. While no company of that precise name is currently registered in the UAE, Badr has previously traded using the same name. Turboshaft’s website continues to be registered to “Black Metal FZE”.
Black Metal is the listed supplier in the customs documents of $2.1mn of items to the 275th Aviation Repair Plant, a Russian installation in Krasnodar that repairs military aircraft. Many of the shipments were marked in the customs dockets as being Czech parts for aircraft instrumentation and avionics systems.
The items, which were recorded as having been originally produced by the Czech companies Technometra Cesky Brod and Mesit ASD, were marked as being for military use. There is no suggestion the producers knew about this transaction. The Black Metal filings found by C4ADS also reveal that the shipment was arranged by Rosoboronexport, a Russian military goods import-export agency.
All of the filings for Black Metal’s exports to the military installation show the company using a Dubai address previously registered to Badr personally.
The allure of selling aircraft parts to Russia is clear; sanctions and export controls have dramatically increased the cost of sensitive imports.
Versions of devices such as ADIRUs that cost $50,000 to $70,000 on the open market are now routinely sold into Russia for more than $120,000. One customs filing submitted by Treetops lists an object described as an ADIRU whose weight implies only one item was in the package. It was sold for more than $600,000.
Patrakov, the expert on Russian aviation safety, says that big mark-ups are being offered across the spectrum. He uses the example of a standard in-air anti-collision system. “The size of a shoebox, it’s a required feature for the safety of the aircraft . . . One unit, depending on the airplane, costs $15,000-25,000. But now the cost of shipping it to Sheremetyevo [in Moscow] is over $100,000 per unit.
“The problems caused by all these sanctions . . . were extinguished with a flood of money. The airlines had the opportunity to buy parts for more money in smaller volumes and lower quality, but still meeting the minimum safety threshold.”
He adds: “Maintaining airworthiness is expensive . . . So why is all of this still working, and the planes even flying? There was unprecedented support for the airline industry.”
The state has been a major player in keeping civil aviation in the air. In 2022, Rosaviatsia — the Russian state agency that oversees civil aviation — received Rbs200bn (€2.7bn) from the government, of which over 70 per cent or Rbs144bn (€1.9bn) was not planned before the full-scale invasion of Ukraine, according to the Audit Chamber, a watchdog that monitors government spending in Russia.
Most of this went to “subsidise domestic flights . . . in the face of external sanctions”, the Chamber’s analysts wrote. For 2023, the subsidies shrunk to Rbs57bn (€770mn).
Rosatom, the country’s nuclear champion and a high-tech manufacturing power, is already working on making parts that were once imported.
As imports have shrunk, the Russian aviation authorities have responded by loosening some rules — such as automatically extending airworthiness certifications for aircraft to extend the lifetimes of parts.
Cannibalisation of planes is expected to follow. An official Russian government plan, published in June 2022, stated that a fall-off in flights was expected as planes were retired and “partially dismantled” to be used for spare parts. “At least 70 per cent of the foreign aviation fleet will remain in operation by the end of 2025, meeting the projected capacity needs,” the plan claims.
In the end, however, losing access to the technical support of the manufacturers and the ability to replace specific parts is expected to lead to planes becoming unserviceable.
At a meeting in August 2023, Sergei Chemezov, the head of Rostec, Russia’s defence-industrial conglomerate, told Vladimir Putin that “from 2025, we will start losing all our foreign planes, because they will need full maintenance overhauls and so on”.
There is still no clear solution to this problem: in spring 2023, state-owned Aeroflot, Russia’s biggest airline, sent at least one of its planes — an Airbus A330 — to Iran for servicing “as a trial step”, but was not entirely happy with the service.
In the long term, Russia has unveiled a plan to build 1,000 new aircraft by 2030. The state allocated Rbs580bn (€10.7bn) in 2022 to buy aircraft from foreign lessors and aid domestic aircraft construction. The plan, however, has already suffered delays.
Litvinov, the former pilot, believes Russia should have focused on domestic airplane production years ago. “Foreign planes will go into disrepair and there will be nothing to replace them with,” he says. “That’s what is critical.”
He adds: “The problem is not that [the planes] will all start falling out of the sky every day, but that there may come a point when there will simply be nothing to fly on.”
After Hours Summary: Busy earnings session; NTRA +16.2%, SG +14.6%, CDNA +13.4%, GH +12.3%, SOUN +12.2% higher on earnings; PGNY -29.8%, AAOI -16.6%, FROG -15.6%, NVTS -12.6%, FIGS -10.7%, SVV -10.3% lower on earnings; MGNX -65.2% on Phase 2 data
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: NTRA +16.2%, ADMA +15.3%, FNKO +14.6% (also names new CEO), SG +14.6%, CDNA +13.4%, GH +12.3%, IAS +12.2%, SOUN +12.2%, AMPS +12.1%, ARRY +8.7%, MTUS +7.6%, RBA +6.9%, PACB +5.8%, EVH +5.3% (also partnering with Careology, a digital cancer care platform), GEN +4.9% (also increases share buyback authorization to $3 bln), IOVA +4.5%, COLD +4.2%, BE +3.6% (also announces a power capacity agreement with Intel), CARG +3.5%, EVCM +3.2%, BLNK +2.8%, ACLX +2.8%, ONTO +2.7%, NNI +2%, DBX +1.6%, HRB +1.6%, TREX +1.4%, CLNE +1.2%, MTD +1.2%, WPM +0.8%, RXRX +0.6%, HCAT +0.4%, VTYX +0.4%, CHUY +0.1%, ETNB +0.1%
Companies trading higher in after hours in reaction to news: ERAS +10.2% (stock offering by selling shareholders), ACIC +8.6% (announces sale of Interboro Insurance Co), PACB +5.8% (stock offering by selling shareholder), PDSB +5.7% (Phase 2 trial meets primary study endpoint), ORN +5.3% (announces significant contract award valued at nearly $80 mln), SABR +3.9% (insider buys disclosed after the close worth approx. $220K), ACLX +2.8% (ACLX and GILD announce several key operational updates on anito-cel program), ANAB +2.5% (announces top-line results from GEMINI-1 and GEMINI-2 Phase 3 trials; also amends agreement with Sagard Healthcare), ODV +2.2% (provides corporate updates), INSW +2.1% (acquired two product carriers), CLSK +2% (to acquire two bitcoin mining locations), AGYS +1.9% (Marriott selects Agilysys point-of-sale platform), FMC +1.5% (announces research agreement with AgroSpheres to develop novel bioinsecticides), RNA +1.5% (files mixed shelf securities offering), ALTI +1.1% (acquires Envoi LLC), AB +0.5% (reports April AUM), IVZ +0.3% (reports April AUM), EVC +0.3% (names new CFO), ASPI +0.3% (stock offering by selling shareholder), GILD +0.1% (ACLX and GILD announce several key operational updates on anito-cel program)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: PGNY -29.8%, AAOI -16.6%, FROG -15.6%, NVTS -12.6%, FIGS -10.7%, SVV -10.3% (also names new CFO), AMN -7.4%, RVNC -6.8% (also launches DAXXIFY for the treatment of cervical dystonia), ARLO -6.7% (also renews partnership with Verisure), YELP -6%, ZIP -6%, SKIN -5.3%, DCBO -5.3%, VCTR -4.3% (also increases dividend), BW -4.2%, SLF -4.1% (also increases dividend), GDOT -3.7%, COLL -3.6% (also CEO to step down; also authorizes $35 mln accelerated share repurchase program), U -3.3%, RICK -3.1%, PODD -2.7%, MERC -2.5%, INDI -2.4%, RXT -2%, SYNA -1.8%, ARWR -1.7%, ALRM -1.6%, MARA -1.5%, AMPL -1.4%, DIOD -1.3%, SSP -1.3%, GETY -0.8%, WEST -0.7%, LAW -0.5%, AVPT -0.2%, ESE -0.1%
Companies trading lower in after hours in reaction to news: MGNX -65.2% (reports interim TAMARACK Phase 2 data, also reports earnings), RWAY -4.5% (3.75 mln share offering by OCM Growth), GPI -2.8% (authorizes new $250 mln share repurchase program), APAM -1.9% (reports April AUM), SVRA -1.4% (files $400 mln mixed shelf securities offering), PRIM -1.3% (files mixed shelf securities offering), DNN -0.7% (names new board chair), NHC -0.3% (increases dividend), CRMD -0.2% (files $150 mln mixed shelf securities offering), MTRN -0.1% (increases dividend), CRL -0.1% (files mixed shelf securities offering)