>>> Europe : Brokers Upgrades & Downgrades - 29th of February 2024

>>> Up
* Administer Raised to Accumulate at Inderes; PT 2.80 euros
* Barrick Gold Raised to Buy at Jefferies; PT C$28.50
* Coupang Raised to Buy at Deutsche Bank; PT $21
* Direct Line Raised to Equal-Weight at Barclays; PT 219 pence
* Leroy Raised to Buy at SEB Equities; PT 52 kroner
* Melrose Industries PT Raised to 735 pence from 620 pence at Citi
* MOL Raised to Outperform at Santander Biuro Maklerskie
* Newmont Corp Raised to Buy at Jefferies; PT $38
* Solaria Energia Raised to Buy at JB Capital Markets; PT 18 euros
* St James's Place Raised to Buy at Citi; PT 615 pence
* Vestas Raised to Buy at Jyske Bank; PT 220 kroner
* Vocento Raised to Outperform at Grupo Santander; PT 1 euro

>>> Down
* Bayer Cut to Neutral at Citi; PT 33 euros
* Digital Workforce Services Cut to Reduce at Inderes
* Encavis Cut to Hold at Berenberg; PT 12 euros
* Novavis Group Cut to Accumulate at Erste Group; PT 3.12 zloty

>>> Initiation
* Banco BPM Rated New Outperform at Oddo BHF
* Learning Tech Reinstated Neutral at Goldman; PT 97 pence
* Sobi Rated New Buy at Berenberg; PT 315 kronor

>>> Call
* Freenet Results Solid, Guidance May Be Conservative, Citi Says
* Neoen’s Target Updates Are Reassuring, Morgan Stanley Says
* Sobi Started With Buy Rating at Berenberg on Top-Tier Growth

>>> What to look at today - 29th of February 2024

Equities in Asia were mixed, while Treasuries steadied after Wednesday’s gains ahead of the Federal Reserve’s key inflation metric that will help identify the path forward for interest rates. Bitcoin surged past $61,000. Japanese and South Korean shares fell Thursday while stocks in China rose led by small-cap names after Wednesday’s selloff amid Beijing’s ongoing crackdown on quant strategies. US equity futures were little changed in Asian trading after small losses for the S&P 500 and Nasdaq 100 overnight. Chinese equities have rebounded sharply this month and are set for their biggest outperformance versus global stocks since July after authorities took a slew of measures to bolster market sentiment. Investors are looking ahead to next week’s meeting of the National People’s Congress to deliver more support measures. Bitcoin extended gains after surging above $60,000 for the first time in more than two years Wednesday, reflecting new demand from exchange traded funds. The currency almost touched $64,000. The 2021 record high is just below $69,000. Other notable moves in Asian shares included a jump for Japanese lender Aozora Bank Ltd. after a fund linked to activist investor Yoshiko Murakami reported a shareholding. Alibaba shares dropped in Hong Kong after the company rolled out its second major cost cuts for cloud services in years.   Declines for US stocks overnight came as data showed strong consumer spending despite a small revision to US gross domestic product growth in the fourth quarter of 2023. The report comes ahead of the Fed’s favored inflation gauge due Thursday and was broadly supportive of the caution voiced by Fed officials in recent weeks. US stocks have reached a significant inflection point — poised to either “top out or broaden out,” according to Craig Johnson at Piper Sandler. Technical evidence suggests the next 10% move in the equity market is likely lower than higher, he said. Treasuries were steady in Asia after a rally Wednesday saw the 10-year yield falling four basis points and the policy-sensitive two-year slipping six basis points. Australian yields echoed the move in early Asian trading while New Zealand yields were largely unchanged. Foreign exchange markets were little changed Thursday, with the yen leading gains against the dollar among its Group-of-10 peers after Bank of Japan Board Member Hajime Takata signaled that the case for ending the world’s last negative interest rate policy is gaining momentum. The greenback gained against most major currencies Wednesday, most notably the New Zealand dollar, which fell 1.2% against the US currency.  In Asia, economic reports due Thursday include fourth-quarter GDP data for India, the current account balance in Thailand, and inflation data for Sri Lanka and Vietnam. New York Fed President John Williams said Wednesday the central bank has “a ways to go,” in its battle against inflation and Atlanta Fed chief Raphael Bostic urged patience in regard to policy tweaks. Overall, recent comments from Fed officials underscore the importance of data in guiding policy moves. Following a jump in both the consumer and the producer price indexes, Thursday’s core personal consumption expenditures gauge will likely highlight the bumpy path the central bank faces in achieving its 2% target. The PCE is seen validating recent commentary from officials showing no rush to ease monetary policy. Traders are currently pricing around 80 basis points of easing by year-end — almost in line with what officials in December indicated as the likeliest outcome. That would equate to three cuts in 2024 — as the Fed moves have historically been increments of 25 basis points. To put things in perspective, swaps were projecting almost 150 basis points of cuts this year at the start of February. In commodities, oil extended declines Thursday following a fall in prices for West Texas Intermediate in the previous session.  Elsewhere, SQM, the world’s second-larget lithium producer, reported a 82% drop in quarterly profits amid global glut for battery material that the company expects to keep prices subdued this year.   US After Hours OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% higher on earnings; LPSN -25%, WW -24.5%, SNOW -20.8%, FWRD -20.7%, DV -18.4% lower on earnings.

Nikkei -0.11% Hang Seng +0.31% CSI +1.59% Shanghai +1.54% Shenzen +2.93%

Eur$ 1.0838 CNH 7.2088 CNY 7.1934 JPY 149.76 GBP 1.2665 CHF 0.8785 RUB 91.3191 TRY 31.2275 WTI$ 78.52 -0.03% Gold 2,037 +0.12% BTC 62,930 +3.94% ETH 3,475 +4.59%

S&P -0.03% Nasdaq -0.06% EuroStoxx +0.02% FTSE +0.12% Dax +0.03% SMI -0.06%

Macro :
- Xi’s Big Ambition in EV Is Unlikely to Boost Growth: China Today
- EU High-Leverage Firms Could Reverse Pandemic Underperformance
- Citadel Securities Hires Ex-Millennium’s Kotecha as APAC Head
- Negative Jaws Risk? European Banks’ €300 Billion Costs in Focus

Keep an eye on :
- ARLN GY : Aareal Bank 4Q Risk Provisions Incl. FVPL €193M vs €28M Y/Y
- ABI BB : AB InBev 4Q Middle Americas Revenue Misses Estimates
- ACKB BB : Ackermans FY Net Income Misses Estimates
- ADEN SW : Adecco 4Q Revenue Meets Estimates
- ADE NO : Adevinta 4Q Ebitda Misses Estimates
- AIR FP : Airbus, Bristow Group in Pact for Up to 15 H135 Helicopters
- AF FP : Air France-KLM 4Q Ebitda Misses Estimates, *AIR FRANCE-KLM 4Q OPER LOSS EU56M, EST. PROFIT EU139.4M
- AIXA GY : Aixtron Sees 2024 Ebit Margin About 24% to 26%, Est. 27.2%
- ABI BB : Bud Light Strike Averted as AB InBev Reaches Deal With Workers
- ANDR AV : Andritz 4Q Net Misses Estimates; Sees Higher 2024 Revenue (1)
- ARCAD NA : Arcadis Joint Venture Selected for Hudson Tunnel Project in US
- AKE FP : Arkema 4Q Ebitda Margin Misses Estimates
- ASRNL NA : ASR Nederland FY Operating Profit Misses Estimates
- ATO FP : Atos Names Onepoint Founder Layani to Board
- BABA US : Alibaba Unveils Big Cloud Price Cuts as AI Rivalry Intensifies
- AMS SM : Fiserv, Amadeus Vie to Acquire Shift4 Payments: Reuters
- ARGX BB : Argenx FY Vyvgart Sales Beats Estimates
- BNG IM : Pop. Sondrio to Enter Italy’s FTSE MIB, Replacing Banca Generali
- BETCO SS : Better Collective Offering of Shares Prices at DKK189.40/Share
- BA US : Justice Department Looking Into Boeing Door Plug Blowout
- BWLPG NO : BW LPG 4Q Time Charter Equivalent Revenue Misses Estimates
- BWO NO : BW Offshore 4Q Ebitda Beats Estimates
- BYS SW : Bystronic FY Ebit Misses Estimates
- AI US : C3.ai 3Q Revenue Beats Estimates --> +16%
- CC US : Chemours Sees FY23 Net Loss $225m-$235m; Delays Results Release
- CLARI FP : Clariane FY Ebitdar Beats Estimates, *CLARIANE WON'T PAY DIVIDEND AS LEVERAGE RATIO >3.5 ON DEC. 31
- CLN SW : Clariant 4Q Adjusted Ebitda Misses Estimates
- COV1 GY : Covestro 4Q Net Loss EU187M, Est. Loss EU98.5M
- DHG ID : Dalata FY Adjusted Ebitda Beats Estimates
- DEEZR FP : Deezer FY Adjusted Ebitda Loss EU28.8M, Est. Loss EU47.1M, CEO Jeronimo Folgueira to Leave at End of March
- EZJ LN : Easyjet to Join FTSE 100, Endeavour Mining to Leave
- EAPI FP : EuroAPI FY Revenue Matches Estimates; Names Ludwig de Mot CEO
- EKTAB SS : Elekta 3Q Operating Profit Misses Estimates
- EMMN SW : Emmi Sees 2024 Ebit CHF295M to CHF315M, Est. CHF302.3M
- EBS AV : Erste 4Q Net Income Beats Estimates, Erste Sees 2024 Net Interest Income Growth About -3%
- FGR FP : Eiffage FY Adjusted Operating Income Meets Estimates
- FIE GY : Fielmann FY Dividend per Share €1.00 Vs. €0.75 Y/y
- FNTN GY : Freenet Sees 2024 Ebitda EU495M to EU505M
- FUR NA : Fugro 4Q Adjusted Ebit Beats Estimates
- GET FP : Getlink 2024 Ebitda Forecast Misses Estimates
- HPQ US : HP Inc 1Q Net Revenue Misses Estimates: Snapshot
- ITP FP : Interparfums CEO Pushes for Growth Amid Pessimistic Views for China
- JAZZ US : Jazz Pharma 2024 Adjusted EPS Forecast Misses Estimates
- KGX GY : Kion Sees 2024 Adjusted Ebit EU790M to EU940M, Est. EU813.5M
- LTMC IM : Lottomatica FY Adjusted Ebitda EU580.4M Vs. EU497.5M Y/y
- MRK GY : Merck KGaA Granted FDA Orphan Drug Status for Cambritaxestat
- MRL SM : Merlin Properties FY FFO Meets Estimates
- MITRA BB : Mithra on Track to Complete Phase 3 Study for Donesta
- MONC IM : Moncler 4Q Revenue Beats Estimates, Moncler Momentum Aids 2024 Growth, Tempers Inventory Risk
- NEOEN FP : Neoen FY Ebitda Meets Estimates, *NEOEN APPOINTS YVES-ERIC FRANCOIS AS CFO AS OF APRIL 1
- NXI FP : Nexity FY Adjusted Net Income Misses Estimates
- NN NA : NN Group FY Operating Profit Beats Estimates
- NDX1 GY : Nordex Sees 2024 Ebitda Margin 2% to 4%, Est. 4.05%
- PARA US : Paramount Global 4Q Revenue Misses Estimates: Snapshot
- BPSO IM : Popolare Sondrio Joins FTSE MIB on Higher Profits, Consolidation
- PST IM : Poste Italiane 4Q Ebit Beats Estimates
- PRY IM : Prysmian 2024 Adjusted Ebitda Forecast Beats Estimates, Prysmian Board Approves Battaini Nomination as CEO, Gori Chair
- RECT BB : Recticel FY Adjusted Ebitda Beats Estimates
- SPM IM : Saipem 4Q Revenue Beats Estimates, Saipem’s Results, Guidance Surpass Expectations
- SDZ SW : Sandoz US to Pay $265 Million to Settle Antitrust Probe
- SBMO NO : SBM Offshore FY Adjusted Ebitda Beats Estimates
- SDRL NO : Seadrill 4Q Adjusted Ebitda Misses Estimates
- SHEL LN : Shell’s US Solar Unit Offers Assets for Sale: Reuters
- SHUR BB : Shurgard FY Adjusted EPRA Profit Misses Estimates
- SMCP FP : SMCP FY Adjusted Ebitda Misses Estimates
- S92 GY : SMA Solar FY Ebitda EU311M Vs. EU70M Y/y
- SRG IM : 2i Rete Gas Starts Process to List Shares on Euronext Milan
- SMHN GY : Suess MicroTec Prelim FY Ebit Beats Estimates
- TKA GY : ThyssenKrupp May Cut at Least 5,000 Jobs at Steel Unit: HB
- UMG NA : UMG 4Q Revenue Beats Estimates, Universal Music Begins €250 Million Cost-Reduction Initiative
- VLA FP : Valneva Says CDC Committee Recommends Chikungunya Vaccine
- VIE F : Veolia Sees Earnings Growth Continuing After 2023 Profit Jumps, Veolia Sees 2024 Current Net Income Above EU1.5B, Est. EU1.51B
- VKTX US : Viking Therapeutics Offering of 6.47m Shares Prices at $85/Share
- VOW GY : XPeng, Volkswagen Enter Into Tech Collaboration, Sourcing Pact
- VZN SW : VZ Holding FY Dividend per Share CHF2.24 Vs. CHF1.74 Y/y

FT : Latin American homebuyers are drawn to Madrid’s elegance

Latin American homebuyers are drawn to Madrid’s elegance
Lower costs and a shared cultural heritage attract well-heeled émigrés — with many choosing the Spanish capital over Miami

Next month Kathia from Buenos Aires and her British husband are moving to Madrid to start a family. They’ve swapped Islington in north London for the upscale Salamanca district, where they’ve bought a four-bedroom apartment.

“Madrid is the obvious choice for us to live — for an Argentinian it feels rather like home but it’s only two hours from London,” says Kathia, who preferred not to disclose her surname. “We also love Barcelona, but Madrid is more beautiful . . . It’s possible to live in the best neighbourhood of Madrid for a fraction of the price for the equivalent in London.”

She’ll be joining a nearly 55,000-strong Argentine community in Madrid, according to the INE, Spain’s statistics institute — a number that increased by more than 6,500 between 2022 and 2023.

In recent years, political and financial instability in Latin American nations have helped drive immigration, leading some to nickname the Spanish capital the “new Miami” — the city in Florida has been a magnet for people from the region for decades. In 2022, more than 820,000 Latin Americans were living in Madrid, according to the INE — 50 per cent more than in 2015.

Kathia says that while her friends and family are not intending to leave Argentina following the election of the populist Javier Milei in November, many share her fears about the economic climate back home.

It was concern for the safety of her four children growing up in Mexico City that persuaded artist Fernanda Cordero and her Spanish husband to move to Madrid two years ago, where they rent a 400 sq m apartment in the Salamanca neighbourhood. “Although my husband, an architect, works a lot in Miami, we did not think that was the best culture for our children either,” she says. “We miss our large garden but don’t want to go back to Mexico.”

Buyers from Argentina, Mexico and Colombia are joined by Chileans, Venezuelans and Peruvians, says Pelayo Barroso, national director of research at Savills Spain. Because these buyers tend to have their capital in US dollars, a favourable exchange rate at the end of 2022 made homes in the Spanish capital cheaper, too.

Property prices are rising, though. In January, the average property price in the city in January was €4,190 per sq m, according to the online property website Idealista.com, up 8.2 per cent year on year, although the level of transactions fell by 16 per cent between 2022 and 2023, according to the Spanish notaries association.

Prime housing prices — defined as the top 5 per cent of the market — grew by 6.4 per cent in the 12 months to Q4 2023 to €9,412 per sq m, according to Knight Frank Research, yet this is still much cheaper than many other global cities: by comparison, in Paris the figure was €22,599; in London, it was €28,160.

Buying agent Lucía de la Fuente started helping Colombians move to Spain when victory was expected for Gustavo Petro of the leftist coalition Pacto Historico. “At first they were wanting to get their savings out and buy an apartment for €200,000-€300,000 in Madrid — but then they wanted to get themselves out, and spending €1.5mn on an apartment for the family.”

Some of de la Fuente’s clients will seek a residency permit with a purchase of at least €500,000 — the golden visa is available to non-EU nationals who spend more than that amount, unmortgaged, on a property. Given that they are cash buyers, they are unaffected by tighter financing conditions in Spain. They tend to want to live in Salamanca and send their children to the private IE Business School (Instituto de Empresa), she says.


Madrid is the autonomous community with the lowest tax rates in Spain, and new tax residents will benefit from a cut in personal income tax (IRPF), announced by the president of the Madrid region, Isabel Díaz Ayuso, in October. If the measure is approved, they will be able to deduct 20 per cent of investment made in financial assets, including real estate.

For students in public universities, late last year the Comunidad de Madrid announced that it would pay 85 per cent towards fees for Latin American students — the same as those from Spain or the EU.

Colombia-born Paula Ibarra moved to a rented flat in Chamberí in December. “I like the mix of trendy places and ‘mom & pop’ shops, and quieter residential vibe,” says Ibarra, who works in marketing and moved from Paris to Madrid “for its familiar language and warm, southern European culture”.

Meanwhile, María Susana Del Prado, who moved from Argentina in 2020, says Madrid isn’t just for the young. “It’s ideal for seniors seeking safety, quality healthcare, gyms and churches in a shared cultural heritage,” says the 78-year-old, whose son already lived in Madrid.

Within Salamanca, with its elegant architecture and narrow streets of boutiques and high-end restaurants, is the upscale pocket of Recoletos, next to Retiro Park, where renovated properties can cost €17,300 per sq m, according to Alex Vaughan of the estate agent Lucas Fox.

Julio, from Tampa in Florida, completed on a two-bedroom flat in Recoletos this week. “Getting a mortgage for 3 per cent, rather than the 7-8 per cent rates in the US, made it seem a good investment right now. We liked the south of Spain, too, but there just aren’t the direct flights [to Tampa],” says the software company owner, who preferred not to disclose his surname.

Vaughan says Almagro is also popular for its elegant 19th-century buildings on leafy avenues, upscale restaurants and art galleries (turnkey properties up to €14,000 per sq m), but Chamberí, Ibiza, Justicia and Huertas-Cortes are vibrant areas where international buyers are now looking for greater choice and affordability — with prices €10,500 to €13,000 per sq m.

Prices at flagship high-end projects such as the Four Seasons Private Residences have achieved record prices for the city, exceeding €18,000 per sq m, according to Savills. Last year, The Mandarin Oriental Residences in Salamanca launched, and next month the SLS Madrid Infantas Residences on the city’s Gran Vía, with prices from €1.375mn for a one-bedroom apartment, will open. The 33 apartments will have access to luxury amenities managed by the SLS Hotels group.

While these properties appeal to wealthy international buyers, Ana White, premium residential properties director at Knight Frank Madrid, says most of her buyers last year were Spanish, accounting for 60 per cent of their sales. British buyers are rare, she adds.

The lower cost of buying and renting a property in Madrid compared with Miami is also persuading some Latin Americans to move cities, says de la Fuente. “Salaries are lower in Spain [than Florida] but they say that the lower living costs and lifestyle benefits of living in Spain balance this.”

Renters would need around €7,000 per month in Miami to enjoy the same standard of life — based on average costs of food, rent and other living expenses — that costs €4,000 in Madrid, according to statistics site Numbeo.

Cuban photographer and barista Ricardo Iglesias left the Floridian city of his birth because he felt it was “pushing him out”.

“Miami was getting too intense and the lifestyle pretentious. Madrid offered me the opportunity to set up a business more easily,” says Ricardo, who set up UNFLTRD, a coffee shop, in the city centre, and rents a flat in Chamberí with his wife. “I might not make the same money as I might have done in Miami but here I can do more for less.”

FT : Can European carmakers stop China’s electric behemoth BYD?

Can European carmakers stop China’s electric behemoth BYD?
The company began selling on the continent a little over a year ago and is already making inroads

The maiden voyage of the BYD Explorer No 1 was far from plain sailing.

The ship, 2.5 times the length of a football pitch and carrying more than 5,000 electric vehicles made in China, was forced to divert around the Cape of Good Hope to avoid the Red Sea, adding 10 days to its journey, captain Sabev Bozhidar told the Financial Times. 

Its eventual arrival in the German port of Bremerhaven on Sunday marks a new chapter in the ambitions of China’s EV specialists to crack open the lucrative European car market.

“The demand is increasing . . . our Google searches have overtaken Tesla . . . we are going to achieve a lot of things in the European market,” said Michael Shu, managing director of BYD Europe. 

But the bloc’s carmakers are determined to fight back. More than 600 miles from Bremen, hours after the BYD ship docked, Renault boss Luca de Meo used the Geneva Motor Show to unveil a series of cars he believes will help the French manufacturer hold its ground against Asian rivals. 

These included the Renault 5, a £25,000 EV that will pave the way for cheaper models and the Dacia Spring, the first EV from the group’s budget brand.

The Spring, which is made in China, will have a starting price of less than €20,000 the company has said, with some reports putting it as low as £15,000 in the UK. 

Renault had also begun talks with Volkswagen about collaborating on a low-cost EV project, De Meo said. 

Meanwhile, Renault’s arch-rival Stellantis, which owns brands including Peugeot and Fiat, hopes to offer an electric model in Europe that would cost less than €20,000, according to European operations boss Uwe Hochgeschurtz, by cutting costs from its new electric Citroën e-C3, which sells for £23,000. 

“It depends on what you put into the car, we have the platform for this . . . we adapt the range, we adapt the battery,” Hochgeschurtz said. “It is possible.” 

The fight for the cheap end of the EV market is crucial. Small cars are best-sellers in Europe, yet several manufacturers have discontinued them as the rising costs of meeting emissions rules has made them unprofitable to produce at an affordable price. 

“Everyone” was getting out of the market for small combustion engine cars because “nobody is able to produce [them] profitably”, De Meo said. “Polo is out, Fiesta is out, everyone is out.” 

The Renault 5 is the company’s first cheaper EV, but Renault is planning a cost reduction of up to 40 per cent in subsequent versions later this decade. 

And while the Dacia Spring will be imported from China, Renault’s own-brand models will be made at home. 

“What was very challenging for the team was that I decided to do the thing in France,” De Meo said. “Everyone was telling me that I was completely nuts.” 

However, because EVs had fewer parts than combustion engine cars, fewer workers were required and the impact of France’s high wages would be lower, he said, adding that about 80 per cent of the supply chain would be within 300km, cutting logistics costs. 

But at the moment, the company’s Dacia brand is at the head of the pack. 

When designing cheaper models, the brand often begins with a Renault vehicle and removes everything not deemed essential.

“We have nothing superfluous in it,” said Denis le Vot, the brand’s chief executive. “We don’t have 22 screens, we don’t have electric seats, and [this approach] resonates more and more, because some people are saying: don’t spend your money on useless things. We don’t put chrome in the car. Why? Because it is shiny and useless. We just take it totally out.”

Across the hall from Renault and Dacia’s displays at the motor show is BYD’s stand, showing a range of models that are priced at similar levels to the electric models made by the incumbents they are hoping to beat. 

Although the company began selling in the region only a little over a year ago, it is already making inroads. 

The BYD Seal, a large saloon costing about £45,000, already outsells the equivalent Tesla Model 3 in some markets such as Ireland and Austria, Shu said.

But the company also has a close eye on other markets. “Lots of customers or partners are asking for a smaller car, because European people like smaller cars,” said Shu, who added that a “new model, lower than €30,000 is coming . . . next year”.

Getting below €20,000 is harder, he added, because of regulations, particularly on crash safety. The company hopes the BYD Explorer will help with this.

The ship, which was launched from China amid a riot of fireworks and dragon dances, has been engineered to be as cost-effective as possible. BYD said that among other things, special paint on its hull cuts down water drag, reducing fuel consumption. It also cuts expensive waiting times for space on other car carriers — which is in short supply — Shu said, adding it was “for sure” a cheaper option.

A bigger fleet is planned. Wang Chuanfu, chair and chief executive of BYD, told a conference in Shenzhen this month that the company would “deploy seven car carriers in the coming two years to ease the shortage of shipping capacity for automobile exports and deliver more . . . vehicles” to the global market, according to several Chinese media reports. 

As they strive to cut costs, European carmakers feel they are insufficiently supported by governments, whose decarbonisation policies have forced them to develop the battery vehicles at which China excels. 

“Europe’s industrial strategy is totally missing,” said De Meo, who also heads the European carmakers’ association, ACEA. “We need to be listened to by politicians, we are the people who are putting the money in and risking the investments.” 

A European Commission investigation of Chinese imports may lead to higher tariffs on cars coming in. But European carmakers say this may not be enough.

According to Hochgeschurtz, the Chinese “can reduce the price much lower than you even think in your wildest dreams”. Many brands sell similar EVs in China for roughly half the price they were advertising in Europe, he added. They can absorb higher tariffs, cut prices and still make high profits.

“Prices in China are very low, so [Europe] is paradise for them.”

FT : The threat to the Italian heritage in car manufacturing

The threat to the Italian heritage in car manufacturing
Rome faces choice over how to handle the transition to electric vehicles

As products linked to the Italian identity go, the Fiat 500 is right up there with fashion and food. So when Carlos Tavares, the chief executive of Stellantis — which now owns the Fiat brand — issued a warning over the future of the car’s production in Italy, there was a backlash in the country.

Tavares raised doubts over the Fiat factory in Turin, home to the company’s founding Agnelli family, and a plant near Naples if Giorgia Meloni’s government refused to further subsidise electric vehicles. “If you don’t give subsidies to purchase EVs, you are putting at risk the Italian plants,” he told Bloomberg.

The prime minister had previously criticised Stellantis in parliament of working, saying: “If you want to sell a car on the international market by advertising it as an Italian jewel, then that car must be produced in Italy.” The spat comes ahead of a crucial EU parliamentary election in June as the impact of the bloc’s 2050 net zero targets on jobs and industries takes centre stage across the continent.

The Paris-based carmaker, created in 2021 from the merger between Italy’s Fiat-Chrysler and France’s PSA, seemingly backtracked last week in a bid to ease tensions with Rome and unions. “The [Fiat 500] will always be linked to the city of Turin which should be considered [its] home,” the group said after a meeting with unions and local authorities. The root cause of the issue, however, remains unsolved.

Stellantis wants to sell a total of 5mn EVs a year by the end of the decade. In the first half of 2023, it sold 170,000. If European car manufacturers are to reach their ambitious goals — in line with the EU’s decarbonisation targets which includes a ban on combustion engines by 2035 — and fend off competition from China, industry experts say that they should focus on affordable small electric cars priced between €12-€15,000.

Stellantis says that it is impossible to produce EVs with such a price tag in continental Europe. The retail price of the electric version of the Fiat 500 — once known as the “people’s car” is priced about €30,000 before subsidies. The group has also recently released a new electric version of its historic Topolino model. The minicar, with a maximum speed of 45km/h, does not require a driver’s licence and sells for €9,800 and upward. 

The government envisages higher EV subsidies for households earning up to €30,000, the national average. In general Italian EV subsidies in 2023 ranged from €2,000 to €7,500 — depending on emissions and the car’s price tag — and were less generous than some other European nations.

Reports have suggested Stellantis could begin producing the low-cost models of its new Chinese partner Leapmotor in Turin by 2026 or 2027, increasing the group’s overall Italian production.

For the time being, the cheapest EV in Italy is one produced in China by the Romanian car company Dacia, which costs around €21,400. Yet, out of the meagre 66,679 electric cars sold in 2023 (under 20 per cent of total car sales), the most popular model among Italians was the Tesla Y, which costs more than €42,000 before subsidies That raises the question of how much more generous subsidies would lift sales.

One obstacle is the lack of charging infrastructure across the country, especially in the south, which is problematic during long journeys. Plus, battery recharging is time consuming and costly (Italy has the third highest household electricity price in the world).

But there’s also another crucial issue: Italy and Fiat were latecomers to the EV market and the national manufacturing industry has been slower than its peers in shifting component production from combustion engines to electric ones. A PwC report published in July shows that close to 40 per cent of the largest 350 domestic suppliers to the automotive industry exclusively produce components for combustion engine vehicles. The report also showed the profit margins of the suppliers had taken a hit in the last three years as a result of the Covid pandemic, raw material shortages and supply chain issues.

Such a backdrop is a challenge for the likes of Stellantis to meet its own 2030 targets and comply with the EU’s ban on the 2035 combustion engine. The appeal of looking to source cheaper production elsewhere must be tempting.

If Rome wants to secure national jobs and salvage its car manufacturing industry, it might face a choice: is it better to subsidise EV sales more or to steer greater public investments into EV infrastructure and supporting the automotive supply chain transformation?

FT : Hedge fund Eisler plans hiring spree to take on industry giants

Hedge fund Eisler plans hiring spree to take on industry giants
UK group to tap investors for $1.5bn and add up to 25 portfolio managers

Eisler Capital is planning to raise between $1bn and $1.5bn of capital from investors and hire up to 25 portfolio managers this year as the fast-growing UK hedge fund muscles into one of the hottest parts of the industry.

The London group’s plans include raising more funds from investors — only a year after increasing assets by more than $1bn — and taking its number of portfolio managers to about 120 or 125, according to a person familiar with the matter.

Eisler’s rapid expansion underscores the war for talent among so-called multi-manager hedge funds, as large institutional investors such as pension funds seek out consistent returns and more extensive risk management, rather than big gains in one year and a loss in the next.

Multi-managers, which include giants Izzy Englander’s Millennium and Ken Griffin’s Citadel as well as Eisler, employ teams of professionals trading a wide variety of strategies, diversifying the fund against market losses.

Traditional hedge funds may have only a couple of portfolio managers trading a specific strategy, supported by a few analysts.

Multi-manager assets increased by 150 per cent in the five years to 2022 while the rest of the industry grew by just 13 per cent in the same period, according to Goldman Sachs estimates. 

Eisler, which only started its multi-manager fund in 2021 and has grown to manage $4bn of assets, was founded by former co-head of Goldman Sachs’ global markets division Edward Eisler. It has about 300 staff globally and trades a variety of strategies in bonds, equities and commodities markets.

Eisler posted a 9.8 per cent return last year, beating many of its rivals and returned 15 per cent in 2022. Notable large hedge funds that underperformed last year include US-headquartered Balyasny and Schonfeld, whose main funds were up 2.7 per cent and 3 per cent, respectively.

Eisler’s plans for 2024 include expanding trading in equities and commodities, and to scale its quantitative trading strategy business, in which computer models trade based on market signals, a person familiar with the matter said.

Some of the hires will be for its equity long-short business, in which portfolio managers buy companies they think will outperform the market, while simultaneously betting against lower-quality companies. The firm this year hired Jeff Russel, the former head of equities at Balyasny, to lead this strategy.

Investors have been drawn to multi-manager funds because they offer tighter risk management, intervening quickly when their portfolio managers begin to lose money, in a bid to limit losses. Fuelling their growth is the sector’s fee structure, which passes through all costs of the fund to investors rather than charging a management fee.

However, investors have been disappointed by their performance last year and the high fees charged by many multi-manager hedge funds, prompting concern that the war for talent has resulted in overall costs spiralling out of control.

A study from BNP Paribas of 238 hedge fund investors showed that hedge funds that charge traditional management fees delivered returns of 7.88 per cent after those fees were taken into account. Hedge funds that use the pass-through model only delivered 5.98 per cent net of fees, the first time in three years they lagged behind peers.

WSJ : SEC Investigating Whether OpenAI Investors Were Misled

SEC Investigating Whether OpenAI Investors Were Misled
Regulator is examining internal communications of CEO Sam Altman, after board last year temporarily ousted him for alleged lack of candor

The Securities and Exchange Commission is scrutinizing internal communications by OpenAI Chief Executive Sam Altman as part of an investigation into whether the company’s investors were misled.

The regulator, whose probe hasn’t previously been reported, has been seeking internal records from current and former OpenAI officials and directors, and sent a subpoena to OpenAI in December, according to people familiar with the matter. That followed the OpenAI board’s decision in November to fire Altman as CEO and oust him from the board. At the time, directors said Altman hadn’t been “consistently candid in his communications,” but didn’t elaborate.

Altman returned as CEO less than two weeks later as part of a deal that also entailed a reconstituted board, which he hasn’t joined.

SEC officials based in New York are conducting the investigation and have asked that some senior OpenAI officials preserve internal documents.

The SEC enforces laws that forbid people from misleading investors, regardless of whether fundraisers seek capital in public or private markets. The SEC often closes investigations without making formal accusations of wrongdoing.

Some of the people familiar with the investigation described it as a predictable response to the former OpenAI board’s claim in its November statement. One of the people said that the SEC hasn’t pointed to any specific statement or communication by Altman that it has deemed misleading.

The SEC’s civil investigation has been percolating in the background as OpenAI officials pitched investors as part of its recently closed tender offer, which valued the AI juggernaut behind viral chatbot ChatGPT at more than $80 billion.

OpenAI is governed by a nonprofit. Investors in its for-profit arm include employees, venture capitalists, and Microsoft MSFT 0.06%increase; green up pointing triangle, which has committed $13 billion to the company in exchange for what is essentially a 49% stake in the earnings of its for-profit arm.

The SEC probe adds to a growing list of government and legal challenges confronting OpenAI, reflecting intense global scrutiny of the company’s business practices and impact on the world. It also shows how the company is still dealing with the fallout from the failed ouster of Altman last year.

At that time of the leadership turmoil, OpenAI executives started getting questions from regulators and law-enforcement entities such as the Manhattan U.S. Attorney’s Office about the board’s accusation of Altman’s lack of candor, The Wall Street Journal reported in November.

That criminal investigation is ongoing, people familiar with the matter said. Its focus couldn’t be learned.

Government officials in the U.S. and Europe also have launched competition inquiries into the relationship between OpenAI and Microsoft, which also has a commercial partnership with the company.

As part of Altman’s return, OpenAI appointed two new board members, who commissioned a review of the events around Altman’s firing from the law firm WilmerHale.

The WilmerHale review is expected to wrap up in a few weeks and produce a report on the events, people familiar with that review said. The review focuses on the board’s handling of his ouster as well as Altman’s conduct.

In some cases, WilmerHale lawyers’ line of questioning has appeared to be more focused on what happened in November and the board’s role, rather than a broader look at Altman’s conduct and managerial style over the years, some of those people said. Another person familiar with the review said the lawyers asked questions about both topics.

>>> US After Hours Summary: OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% hig

After Hours Summary: OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% higher on earnings; LPSN -25%, WW -24.5%, SNOW -20.8%, FWRD -20.7%, DV -18.4% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: OKTA +24.2%, DUOL +21.3%, ESTA +14.4%, AI +13.5% (also names new CFO), SILK +13.2%, ATRO +9.7%, MDXG +9.1%, NTRA +8.9%, RVNC +8.7%, PSTG +8.6% (also authorizes add'l $250 mln in share repurchases), AMRC +8%, CPRX +7.9%, GEF +6.4%, CCCS +6%, CWAN +5.1%, MNST +5.1%, STKL +5%, WHD +4.9%, NTNX +3.8%, STN +3.8% (also CFO retiring; increases dividend), AAON +3.6%, EPR +2.9% (also increases dividend), TASK +2.6%, RXST +2.5%, PETQ +1.7%, AXNX +1.3%, KNTK +1.2%, MGNI +1.1%, PAGS +1.1%, CODI +0.9%, CRM +0.4% (also initiates dividend; increases share repurchase auth by $10 bln), PARA +0.3%, NSA +0.1%, SOVO +0.1%

Companies trading higher in after hours in reaction to news: CXM +6.5% (to join S&P SmallCap 600), NVRO +1.1% (FDA clears its sacroiliac joint fusion device), EA +0.7% (approves restructuring plan, which includes 5% workforce reduction), FBMS +0.7% (authorizes new $50 mln share repurchase program), PNW +0.4% ($650 mln stock offering; also files mixed shelf securities offering),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: LPSN -25%, WW -24.5%, SNOW -20.8% (also CEO to retire, names new CEO), FWRD -20.7% (also suspends dividend), DV -18.4%, SHLS -16.2%, SDGR -15.4% (also files mixed securities shelf offering), FIGS -15.3%, NARI -11%, ALKT -10.8%, STEM -10.6%, AMC -9.8%, IONQ -9.6%, MARA -7.5%, MYRG -7.5%, SRI -6.7%, MQ -4.5%, IOVA -4.1%, HPQ -3.5%, SBGI -3.4%, SDRL -1.9%, ADMA -0.9% (also CFO to step down), JAZZ -0.9%, ZUO -0.3%, RNA -0.3% (also stock offering by selling shareholder), PNTG -0.2%, USPH -0.1% (also increases dividend),

Companies trading lower in after hours in reaction to news: FIGS -15.3% (CFO to resign), CLPT -10.6% (commences stock offering), MIRM -5.9% (to delay 10-K filing), ARQT -5.4% (commences $150 mln offering; also announces collaboration and licensing agreement for Topical Roflumilast in Japan), PTLO -5.4% (launches 8 mln share offering), APG -2.9% (stock offering by selling shareholders), CLDX -2.6% ($250 mln stock offering), NVAX -2.5% (CDC advisory committee votes to recommend 65 and older should receive an additional dose of COVID-19 vaccine), CSTL -1.6% (files $300 mln mixed shelf securities offering), EDIT -1.2% (files mixed shelf securities offering), ANET -1% (COO to take leave of absence), BA -1% (DOJ looks into its door plug blowout, according to Bloomberg), TPB -0.1% (increases dividend),

>>> Petrobras says it has not made a decision regarding the distribution of div

Petrobras says it has not made a decision regarding the distribution of dividends that have not yet been declared
  • Management's decisions on dividends, including the proposed allocation of the result to be submitted for approval at the Ordinary General Meeting scheduled for 04/25/2024, will be taken based on the Company's new Shareholder Remuneration Policy, approved by the Board of Directors. Administration on 07/28/2023.
  • Release