- Stellantis (8TI TH) +1%
- Stellantis Plugs China EV Hole With $1.1 Billion Leapmotor Deal
- Rio Tinto (RIO1 TH) +0.9%
- Neste (NEF TH) +0.8%
- Danone (BSN TH) +0.7%
- Danone Sees FY Like-for-Like Sales +6% to +7%, Est. +5.86%
- Rheinmetall (RHM TH) +0.5%
- Rheinmetall Prelim 3Q Operating Profit Beats Estimates
- UMG (0VD TH) -2%
- Kion (KGX TH) -2.1%
- Kion 3Q Net Income EU82.0M
- Wacker Chemie (WCH TH) -2.3%
- Wacker Chemie Narrows FY Ebitda Forecast, Misses Estimates
- HelloFresh (HFG TH) -2.6%
- HelloFresh Maintains FY Adjusted Ebitda Forecast
- Mercedes (MBG TH) -2.6%
- Mercedes Sees Profit Margin Pressure on Costs, Weaker Demand (1)
- Worldline (WO6 TH) -3.4%
- Worldline CEO Says Plunge ‘Uncorrelated to Fundamentals: Echos
- Puma (PUM TH) -3.5%
- Publicis (PU4 TH) -3.5%
- Aixtron (AIXA TH) -6.3%
- Aixtron 3Q Ebit Misses Estimates
- WPP (0WP TH) -19%
- WPP Cuts FY LFL Revenue Less Pass-Through Costs Forecast
DAX:
- Rheinmetall (RHM TH) +0.7%
- Rheinmetall Prelim 3Q Operating Profit Beats Estimates
- Porsche (PAH3 TH) -0.1%
- VW Vows to Drive Efficiencies After Disappointing Returns
- Deutsche Bank (DBK TH) -1.3%
- Vonovia (VNA TH) -1.3%
- Vonovia CEO Sees Building Shortage Until 2025: Handelsblatt
- Zalando (ZAL TH) -1.3%
- Mercedes (MBG TH) -1.9%
- Mercedes Sees Profit Margin Pressure on Costs, Weaker Demand
- BMW (BMW TH) -1.9%
MDAX:
- Nordex (NDX1 TH) -0.8%
- Thyssenkrupp (TKA TH) -1.9%
- HelloFresh (HFG TH) -3.4%
- HelloFresh Maintains FY Adjusted Ebitda Forecast
- Puma (PUM TH) -3.5%
- Puma Cut to Add at Baader Helvea; PT 62 euros
- Befesa (BFSA TH) -3.7%
- Befesa Cuts 2023 Forecast; 3Q Adj. Ebitda Meets Estimates
- Aixtron (AIXA TH) -5.4%
- Aixtron 3Q Ebit Misses Estimates
SDAX:
- Ceconomy (CEC TH) +11%
- Ceconomy 4Q Sales Beats Estimates
- Borussia Dortmund (BVB TH) +3.4%
- Cancom (COK TH) +1.2%
- GFT (GFT TH) -1.2%
- Suess MicroTec (SMHN TH) -6.4%
- Suess MicroTec Cut to Underperform at Oddo BHF; PT 15 euros
Asian stocks are set to tumble to their lowest in nearly a year while US futures extended declines as a batch of poor corporate earnings soured sentiment. Currency traders were on edge after the yen weakened past a key level. The MSCI Asia Pacific Index fell over 1.5%, with benchmarks in South Korea and Japan sliding more than 2% each. The moves tracked Wall Street’s weakness driven by Meta Inc.’ uncertain earnings outlook and Google parent Alphabet Inc.’s disappointing cloud figures. Stocks in Hong Kong and mainland China erased gains from the previous session when fresh stimulus measures soothed sentiment. Treasury yields held most of Wednesday’s surge in Asia, which was triggered by poor demand for a sale of five-year notes. A return of rising oil prices in the previous session helped send 10-year yields back toward 5%. The elevated yields are another factor hurting the case for investment in technology firms. Nasdaq 100 futures contracts fell as much as 1.2% in Asian trading. The dollar strengthened against major currencies, with a Bloomberg gauge of the greenback climbing toward a one-year high seen earlier this month. The Australian dollar slipped as the central bank governor played down strong inflation figures. Higher Treasury yields pushed the yen past 150 per dollar again, increasing the risk of intervention from the authorities in Tokyo. Japan’s finance minister Shunichi Suzuki said authorities are watching currency moves with a high sense of urgency. Oil steadied with West Texas Intermediate trading near $85 a barrel, after rising 2% in the previous session. Israel’s Prime Minister Benjamin Netanyahu said his nation was in a battle for its very existence, and that an invasion was being prepared. The remarks reignited a war premium in the oil price that had been subsiding over the last few sessions. Wall Street grappled with a batch of corporate earnings which sent stocks lower on Wednesday amid heightened Treasury volatility. Traders also kept an eye on the latest comments by President Joe Biden after he had asked Israel to delay its invasion so that more hostages held by Hamas could be freed. Standard Chartered Plc added to the earnings gloom after the lender’s third-quarter pre-tax profit comprehensively missed analysts’ expectations. In Asia, the world’s No. 2 maker of memory chips SK Hynix Inc. reported a more moderate decline in revenue for the third quarter and said it will increase capital spending, a sign the global semiconductor market may be recovering. The stock still fell amid a broad selloff in risk assets. Gold extended gains and edged closer to $1,990 an ounce, benefitting from an increased appetite for safe haven assets. US After Hours Busy earnings night, MS names new CEO; PI +18%, FLEX +9.6%, NOW +5.2%, IBM +1.3% higher on earnings; ALGN -23.3%, MXL -10.9%, EW -6.6%, WHR -5.1%, META -1.2% lower on earnings; EDR +24.2% pops on strategic review.
Nikkei -2.21% Hang Seng -0.62% CSI -0.39% Shanghai -0.03% Shenzen -0.38%
Eur$ 1.0546 CNH 7.3286 CNY 7.3180 JPY 150.43 GBP 1.2080 CHF 0.8981 RUB 93.4063 TRY 28.1472 WTI$ 85.21 -0.21% Gold 1,989 +0.47% BTC 34,681 ETH 1,807 +1.05%
S&P -0.64% Nasdaq -1.05% EuroStoxx -1.01% FTSE -0.57% Dax -1.01% SMI -0.60%
Macro :
- Swiss Investors Face Pain From Reverse Convertibles
- Bill Ackman makes $200mn from bet against US Treasuries
Keep an eye on :
Keep an eye on :
- AC FP :
- ADP FP : ADP 9M Revenue EU4.12B Vs. EU3.38B Y/y
- AIXA GY : Aixtron 3Q Ebit Misses Estimates
- AKERBP NO : Aker BP to Report Results; Shares Up 2.2% YTD: Preview
- AAPL US : Apple Plans AirPods Overhaul After Product Emerges as Top Seller
- ALO FP : Worldline, Alstom May Exit CAC 40 at Next Review, JPMorgan Says
- ARCAD NO : Arcadis 3Q Oper Ebitda EU128M Vs. EU101M Y/y
- ATO FP : Kretinsky Plan to Buy Atos Assets Sparks French Lawmaker Worries
- ATO FP : Kretinsky Plan to Buy Atos Assets Sparks French Lawmaker Worries
- ATO FP : Atos 3Q Revenue Misses Estimates
- ATC US : Altice Co-Founder Pereira Can Be Released on Bail, Lawyer Says
- BAVA DC : Bavarian Nordic’s Mpox Vaccine Gets Routine Use Recommendation
- BFSA GY : Befesa Cuts 2023 Forecast; 3Q Adj. Ebitda Meets Estimates
- BESI NA : BE Semiconductor Sees 4Q Gross Margin 62% to 64%, Est. 63%
- BETSB SS : Betsson Reports Higher Sales in First Part of 4Q, Lower Margin
- BHG SS : BHG Group 3Q Adjusted Gross Profit Misses Estimates
- BB FP : BIC 3Q Net Sales Misses Estimates
- BIM FP : BioMerieux 3Q Organic Sales Misses Estimates
- BNP FP : BNP Paribas 3Q Net Income Misses Estimates
- BUCN SW : Bucher 9M Sales CHF2.73B Vs. CHF2.62B Y/y
- BVI FP : Bureau Veritas 3Q Organic Revenue Misses Estimates
- CAPMAN FH : CapMan 9M EPS EU0.044
- CA FP : Carrefour 3Q LFL Sales Ex-Fuel, Ex-Calendar Beats Estimates
- CO FP : Casino 3Q France Retail Sales EU3.40B
- CO FP : Casino Says Accelerated Safeguard Proceedings Opened
- CO FP : Casino Cuts France Profit Outlook On Price Investments (1)
- CEC GY : Ceconomy 4Q Sales Beats Estimates
- CRBN NA : Corbion Sees FY Core Adj. Ebitda Low End of +15% to +20%
- BN FP : Danone Sees FY Like-for-Like Sales +6% to +7%, Est. +5.86%
- ELUXB SS : Electrolux Group Proposes Torbjorn Loof as New Chairman
- EDR US : Silver Lake Working Toward Proposal to Take Endeavor Private
- ERA FP : Eramet Cuts FY Ebitda Forecast
- EL FP : PAI-Backed Eyewear Maker Marcolin Is Said to Weigh Sale
- FGR FP : Eiffage to Buy 1.76% of Getlink; Now Hold 20.55% of Its Capital
- ETL FP : Eutelsat 1Q Revenue EU274.0M
- FSKRS FH : Fiskars 3Q Comparable Ebit Misses Estimates
- FLOW NA : Flow Traders 3Q Normalized Net Trading Income EU67.6M
- FDR SM : Fluidra 9M Net Income EU108M Vs. EU179.4M Y/y
- FUG NA : Fugro 3Q Adjusted Ebit Beats Estimates
- GTT FP : Eiffage to Buy 1.76% of Getlink; Now Hold 20.55% of Its Capital
- GRNG SS : Granges 3Q Adjusted Operating Profit Beats Estimates
- HNSA SS : Hansa Biopharma 3Q Net Loss SEK250.7M, Est. Loss SEK209.8M
- HFG GY : HelloFresh to Buy Back Up to EU150m in Shares, Convertible Bonds
- HFG GY : HelloFresh Maintains FY Adjusted Ebitda Forecast
- ISP IM : Intesa Won’t Pay Bank Windfall Tax By Opting For Get-Out Clause
- IPN FP : Ipsen 3Q Sales Misses Estimates
- JMT PL : J. Martins 3Q Net Income Beats Estimates
- KESKOB FH : Kesko 3Q Adjusted Ebit Beats Estimates
- KIN BB : Kinepolis 3Q Change in Attendance +41.5%
- KGX GY : Kion 3Q Net Income EU82.0M
- SKB GY : Koenig & Bauer Expects 2023 FY Weaker Than Previously Assumed
- 9863 HK : LEAPMOTOR RISES 11% IN HK AFTER STELLANTIS AGREES TO BUY STAKE
- LIAB SS : Lindab 3Q Operating Profit Beats Estimates
- MB IM : The billionaires and the bank: the tussle at the top of Mediobanca
- MBG GY : Mercedes Now Sees Cars Adj. RoS at Lower Half of 12%-14% Range
- MIPS SS ; Mips 3Q Net Sales Misses Estimates
- MTHH DC : MT HøJgaard Holding Sells 60% Ownership Stake in Seth
- MYTIL GA : Mytilineos 9M Net Income EU462M Vs. EU312M Y/y
- NVG PL : Navigator Co 9M Net Income EU200.8M Vs. EU270.5M Y/y
- NEM GY : Nemetschek 3Q Ebitda Beats Estimates
- NXI FP : Nexity Maintains FY Revenue Forecast, Misses Estimates
- NYF SS : Nyfosa 3Q Net Operating Income Beats Estimates
- OKEA NA : Okea Makes Oil Discovery Near Brage Field in North Sea
- ORK NO : Orkla Says Rhône Buys 40% Stake in Food Ingredients Division
- PGS NO : PGS Sees FY Capex Below $100M, Saw About $100M to $100M
- PHARM NA : Pharming 3Q Revenue $66.7M Vs. $54.2M Y/y
- POM FP : Plastic Omnium FY Operating Profit Forecast Misses Estimates
- PRS NO : Prosafe Offering Prices at NOK60/Share
- RAL FP : Rallye, Euris, Others Get Opening of Ad Hoc Proceedings
- REP SM : Repsol 3Q Adjusted Income Beats Estimates
- RTN LN : Pizza Express Evaluates Making Rival Offer for TRG: Sky News
- RHM GY : Rheinmetall Prelim 3Q Operating Profit Beats Estimates
- ROG SW : Roche Plans to Fund $7.1 Billion Purchase of Telavant With Debt
- SAABB SS : Saab Boosts FY Organic Revenue Forecast
- SAB SM : Sabadell Sees FY Net Interest Income Growth +25%, Saw Above +20%
- SFER IM : Ferragamo to Buy Minority Interests in China Ventures for $42m
- SANOMA FH : Sanoma Narrows FY Revenue Forecast
- SPM IM : Saipem 3Q Revenue Meets Estimates
- WAF GY : Siltronic 3Q Sales Meets Estimates
- SCST SS : Scandi Standard 3Q Net Sales SEK3.31B Vs. SEK3.20B Y/y
- SHOT SS : Scandic 3Q Net Sales SEK6.31B Vs. SEK5.99B Y/y
- SU FP : Schneider Electric 3Q Organic Revenue Beats Estimates
- SMCP FP : SMCP 3Q Sales EU294.9M Vs. EU308.4M Y/y
- SW FP : Sodexo FY Underlying Operating Profit Beats Estimates, Sees Pluxee Listing on Euronext Paris in Early 2024
- STAN LN : StanChart Reports $697m China Bohai Bank Impairement Charge
- STLAM IM : Stellantis to Buy $1.1 Billion Stake in China EV Maker Leapmotor
- STMPA FP : STMicroelectronics 3Q Gross Margin Beats Estimates, 4Q Net Revenue Forecast Misses Esti
- SMHN GY : Suess MicroTec Slumps After Cutting FY Ebit Margin Forecast
- SWEDA SS : Swedbank’s Net Interest Income Jumps in Third Quarter on Rates
- TMV GY : TeamViewer Extends CEO’s Contract to 2028
- TIT IM : Vivendi Would Sell Telecom Italia Stake for €0.5O/Shr, Sole Says
- TIETO FH : TietoEVRY 3Q Adjusted Operating Profit Beats Estimates
- TGS NO : TGS 3Q Ebitda Misses Estimates
- FP FP : TotalEnergies Commissions LNG Floating Terminal in Le Havre
- TRELB SS : Trelleborg 3Q Adjusted Ebita Beats Estimates
- UBSG SW : UBS Moves Up Research Rankings After 10,000 Pages on Stock Picks
- ULVR LN : Unilever Promotes U.S. Head to Be Its New Marketing Chief -- WSJ
- ULVR LN : Unilever 3Q Underlying Sales Misses Estimates
- VAST NA : Vastned 3Q Occupancy 98.8% Vs. 98.2% Q/Q
- VERK FH : Verkkokauppa.com 3Q Revenue Misses Estimates
- DG FP : Vinci Unit Wins Orders for 1,950KM Transmission Lines in Brazil
- VIV FP : Vivendi Would Sell Telecom Italia Stake for €0.5O/Shr, Sole Says
- VLTSA FP : Voltalia Maintains FY Normalized Ebitda Forecast
- VOLVB SS : Volvo Car 3Q Revenue Misses Estimates
- VOLVB SS : Volvo Car Earnings Miss on Issues Selling Electric Vehicles
- VOS GY : Vossloh 9M Ebit EU76.9M
- VOW GY : VW 3Q Operating Margin Misses Estimates
- VOW GY : VW Vows to Drive Efficiencies After Disappointing Returns
- VNA GY : Vonovia CEO Sees Building Shortage Until 2025: Handelsblatt
- WCH GY : Wacker Chemie Narrows FY Ebitda Forecast, Misses Estimates
- WLN FP : Payments Stocks Wipeout Hits $80 Billion After Worldline Shock
- WLN FP : Worldline CEO Says Plunge ‘Uncorrelated to Fundamentals: Echos
- WPP LN : WPP Cuts FY LFL Revenue Less Pass-Through Costs Forecast
- XIOR BB : Xior 9M EPRA EPS EU1.50 Vs. EU1.41 Y/y
- YAR NO : Yara Intl: Draft Norway Assessment Would Boost Taxes by $170m
>>> Up
* Biotage Raised to Buy at Nordea; PT 150 kronor
* DSV Raised to Neutral at BNPP Exane; PT 1,060 kroner
* Eurofins Scientific Raised to Hold at Deutsche Bank; PT 50 euros
* Holmen Raised to Hold at SEB Equities; PT 426 kronor
* Kitron Raised to Buy at Norne Securities; PT 38 kroner
* Know IT Raised to Buy at Nordea; PT 149 kronor
* Know IT Raised to Buy at Pareto Securities; PT 170 kronor
* Lagercrantz Raised to Buy at SEB Equities; PT 116 kronor
* OVH Raised to Equal-Weight at Morgan Stanley; PT 7.10 euros
* Purmo Group Raised to Buy at Inderes; PT 8 euros
* Snap Raised to Hold at China Renaissance; PT $9
* Sotkamo Silver Raised to Accumulate at Inderes; PT 0.90 kronor
* SSAB Raised to Buy at Deutsche Bank; PT 86 kronor
* Storebrand Raised to Buy at Nordea; PT 101 kroner
* Traton Raised to Buy at SEB Equities; PT 21.69 euros
* Valmet Raised to Buy at Inderes; PT 27 euros
* Visa Raised to Buy at Punto Casa de Bolsa; PT $274.32
>>> Down
* Visa Raised to Buy at Punto Casa de Bolsa; PT $274.32
>>> Down
* Cint Cut to Hold at Nordea
* Infotel Cut to Add at Gilbert Dupont; PT 48.70 euros
* Kesla Cut to Reduce at Inderes; PT 4 euros
* LeadDesk Cut to Accumulate at Inderes; PT 8 euros
* Puma Cut to Add at Baader Helvea; PT 62 euros
* Puma Cut to Add at Baader Helvea; PT 62 euros
* Suess MicroTec Cut to Underperform at Oddo BHF; PT 15 euros
* Thermo Fisher Cut to Sector Weight at KeyBanc
* UCB Cut to Hold at Jefferies; PT 79 euros
* Viscofan Cut to Hold at Berenberg
* Worldline Cut to Hold at Deutsche Bank; PT 11 euros
* Worldline Cut to Underweight at Morgan Stanley; PT 8.90 euros
* Worldline Cut to Neutral at Mediobanca SpA; PT 15 euros
>>> Initiation
* NTG Nordic Transport Group Rated New Buy at Berenberg
>>> Call
* OVH Valaution Now Reflects Risks, Upgraded at Morgan Stanley
>>> Initiation
* NTG Nordic Transport Group Rated New Buy at Berenberg
>>> Call
* OVH Valaution Now Reflects Risks, Upgraded at Morgan Stanley
* UCB Cut at Jefferies on Lower Bimzelx Peak Sales Expectations
* Viscofan Cut to Hold at Berenberg on Lower Demand Outlook
Silver Lake Looks to Privatize Hollywood Agency Titan Endeavor
The owner of WME and IMG said it was exploring options, but will keep its majority interest in TKO, the company that controls UFC and WWE
Private-equity giant Silver Lake said it is working on a proposal to take private Endeavor EDR -1.99%decrease; red down pointing triangle Group Holdings, the owner of talent agencies WME and IMG.
“Silver Lake firmly believes in Endeavor’s business and is not interested in selling its shares in Endeavor to a third-party nor in entertaining bids for assets that are a part of Endeavor,” the firm wrote in a statement. Silver Lake owns about 71% of the voting stake in Endeavor.
The announcement from Silver Lake came after Endeavor on Wednesday said it was exploring strategic opportunities for the company that could include a sale of assets. Endeavor said it had no plans to sell its majority interest in TKO Group Holdings, which resulted from the merger of Endeavor’s Ultimate Fighting Championship with World Wrestling Entertainment. That venture was spun out into a separate company last month.
“We believe we are significantly undervalued, and we are exploring all options,” Endeavor Group Holdings President and Chief Operating Officer Mark Shapiro said in an interview.
Asked if the WME talent agency was likely to be sold or spun off, Shapiro said, “no one should assume anything.”
Endeavor’s shares rose 24% in after-hours trading.
Ari Emanuel, CEO of Endeavor, said in a statement, “We believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders.”
Besides TKO and WME, Endeavor also controls the sports and modeling agency IMG, which has partnerships with several major sports leagues as well as a significant events business.
In the years before it went public in 2021, Endeavor sought to expand beyond its representation business. The company acquired a number of companies including Ultimate Fighting Championship, the mixed martial arts league, and the Professional Bull Riders league.
Those acquisitions were driven in part out of concerns that the talent representation business was entertaining a phase of slower growth. Like all talent agencies, Endeavor’s WME has been hit hard by the strikes that have closed production in the entertainment industry for the past several months.
Endeavor also was forced to divest its content production business as part of a new agreement with the Writers Guild of America. Besides no longer being able to produce content, it also doesn’t receive so-called packaging fees for TV series and movies that include a significant number of WME clients. Packaging fees have been very lucrative for the talent agencies.
Along with CAA, WME has a formidable roster of top-tier actors and writers, including Dwayne Johnson, Ben Affleck, Tyler Perry, Oprah Winfrey, “Law & Order” creator Dick Wolf and the reality juggernaut Kardashian family. Endeavor in 2014 acquired IMG, which represents many fashion models and sports stars.
Last month, French billionaire Francois-Henri Pinault’s family investment company agreed to buy a majority stake in rival talent agency Creative Artists Agency from private-equity firm TPG. The deal valued CAA at an enterprise value of $7 billion including debt.
Earlier this year, Endeavor sold the for-profit boarding school IMG Academy that trains promising adolescent athletes to the private equity group BPEA EQT for an enterprise value of $1.25 billion, the company said.
Endeavor has seen its stock drop more than 35% since it went public. The company’s stock is down more than 16% so far this year.
Xi Jinping Is Looking for Someone to Blame for China’s Property Bust
On the prowl for villains, Beijing expands real-estate probe to financial institutions
With China’s property bust threatening to sink the country’s economic recovery, Xi Jinping is looking for someone to blame.
After putting the billionaire founder of Evergrande, a heavily indebted property firm, under investigation for possible crimes, Beijing is expanding its probes to include bankers and financial institutions that facilitated developers’ risky behavior, people familiar with the matter say.
Among those under scrutiny: a former head of Bank of China, one of the country’s biggest lenders, the people said.
While meeting with senior officials last month, Xi made it clear he wants no stone left unturned when it comes to disciplining a real-estate industry that at its peak made up as much as a quarter of China’s economy.
Xi indicated at the meeting that he could tolerate slower growth as a result of the property slowdown, people familiar with the matter said. But anticorruption must be carried through to the end, he added.
Bank of China, Evergrande and the State Council Information Office, which handles inquiries for China’s leadership, didn’t respond to requests for comment.
The widening probes, while potentially useful for regulators’ understanding of China’s real-estate mess, risk distracting from more substantive measures to stabilize the beleaguered property sector, economists say.
The end of China’s property boom has saddled the country with debt, spooked investors and left many consumers unwilling to spend. Analysts say they expect more sluggish growth ahead for the world’s second-largest economy, and can’t rule out a wider financial crisis if more isn’t done to restructure developers’ debts and shore up confidence in the sector.
Evergrande, which had the equivalent of more than $327 billion in liabilities at the end of June, disclosed an investigation into its founder, Hui Ka Yan, in September. While no details have been disclosed since, authorities have been looking into whether Hui squirreled assets overseas while Evergrande struggled to deliver homes people had already paid for, The Wall Street Journal has reported.
Ties of ‘Brother Belt’ to banks under scrutiny
Another focus of the Hui probe, people close to Beijing said, is whether Hui and his management team engaged in illegal fundraising activities, such as giving kickbacks to banking executives in exchange for loans.
Following news of the investigation into Hui, dubbed “Brother Belt” by many in China for his penchant for Hermès belts, videos of his lavish lifestyle—including a dancing troupe he kept on the company’s payroll to entertain bankers and other VIPs, despite its financial stress—have flooded China’s tightly monitored social media, a sign of Beijing’s intention to make an example of him.
Officials are particularly interested in Evergrande’s 20 or so largest creditors, including state-owned banks and some controlled by lower levels of government.
Earlier this month, Liu Liange, who served as Bank of China’s chairman and Communist Party secretary from 2019 until early this year, a period when the bank’s importance to Evergrande grew, was arrested on charges of accepting bribes and illegally granting loans. Liu was put under investigation by the party’s antigraft force in March and expelled from the party a few days before his formal arrest.
China announced the charges against Liu just a few days after the investigation into Evergrande’s Hui became known, without elaborating on the allegations.
People familiar with the matter said the charges against Liu partly involved the bank’s lending to Evergrande. They said the announcement’s timing was intended to be a warning shot to major banks and their executives over their exposure to Evergrande and the troubled property sector overall.
Another bank under scrutiny, people familiar with the matter said, is China Minsheng Bank, Evergrande’s biggest lender.
Earlier this year, Minsheng applied with securities regulators to issue a roughly $7 billion convertible bond in a bid to beef up its capital base amid market concerns about its property exposure.
Regulators inquired about the bank’s real-estate exposure as part of their review of its application. In July, Minsheng was required by the Shanghai Stock Exchange to list all its property borrowers, including those that had defaulted or were at risk of defaulting.
Minsheng never supplied the information, people familiar with the matter said. A month later, the bank pulled the offering, citing the “capital market environment.”
The inquiry into Hui is expected to assist authorities in their investigations into the lending practices of Minsheng and other banks to Evergrande, people familiar with the matter said.
Minsheng didn’t respond to queries.
Risks to China’s economy
Xi started taking on property in late 2020 after years of rapid growth in the sector raised fears of a bubble. A policy dubbed “three red lines” imposed strict debt and cash-flow targets on developers, all but choking off liquidity for many of them.
With their access to funding curtailed, Chinese developers have defaulted on more than $120 billion of bonds issued outside the mainland. Country Garden, once hailed as a model developer in the country, recently became the latest Chinese property giant to fail to repay bondholders.
The government has taken some piecemeal steps to support developers and stimulate home buying, but has stopped short of rolling out a comprehensive plan to assist developers with debt restructurings and to get banks and other stakeholders to take losses—all parts of a process economists say could be essential to keeping risks from spreading.
Part of the reason for the lack of a comprehensive debt-restructuring plan is the guidance from Xi himself that the property sector must be squeezed, people close to Beijing’s decision-making said.
As a result, policy recommendations such as those calling on Beijing to increase spending to bail out some big developers or local governments and then get them to deliver unfinished houses haven’t got much traction, the people said.
Meanwhile, developers’ financial distress is dragging down home sales and housing starts as they run out of money to finish projects and build new ones. Weakening home prices are squeezing developers even more and slowing China’s rebound from dismal growth this summer.
“The weak economic recovery obviously has a lot to do with the knock-on effects from property,” said Arthur Kroeber, founding partner and head of research at Gavekal Dragonomics.
In a sign of potential wider risks, fears of Evergrande’s financial troubles sparked a run this month on a small bank in northern China’s Hebei province. Depositors lined up at the Bank of Cangzhou after social-media posts said the bank’s lending to Evergrande totaled 3.4 billion yuan, equivalent to $465 million, which would make it one of the developer’s top 20 bank creditors.
The bank run was stopped after the city government in Cangzhou urged calm and the city-controlled bank issued a statement saying its outstanding loans to Evergrande were 340 million yuan instead of the rumored 3.4 billion yuan. The bank also stated “the overall risk is controllable.”
As a result, policy recommendations such as those calling on Beijing to increase spending to bail out some big developers or local governments and then get them to deliver unfinished houses haven’t got much traction, the people said.
Meanwhile, developers’ financial distress is dragging down home sales and housing starts as they run out of money to finish projects and build new ones. Weakening home prices are squeezing developers even more and slowing China’s rebound from dismal growth this summer.
“The weak economic recovery obviously has a lot to do with the knock-on effects from property,” said Arthur Kroeber, founding partner and head of research at Gavekal Dragonomics.
In a sign of potential wider risks, fears of Evergrande’s financial troubles sparked a run this month on a small bank in northern China’s Hebei province. Depositors lined up at the Bank of Cangzhou after social-media posts said the bank’s lending to Evergrande totaled 3.4 billion yuan, equivalent to $465 million, which would make it one of the developer’s top 20 bank creditors.
The bank run was stopped after the city government in Cangzhou urged calm and the city-controlled bank issued a statement saying its outstanding loans to Evergrande were 340 million yuan instead of the rumored 3.4 billion yuan. The bank also stated “the overall risk is controllable.”
The billionaires and the bank: the tussle at the top of Mediobanca
Shareholders to vote on competing board candidates in a power struggle over the future of the Italian group
Eighteen months ago, two billionaires lined up against the board of Italy’s largest insurer, Generali — and lost. This weekend, the emissaries of the country’s influential Del Vecchio family and building tycoon Francesco Gaetano Caltagirone will find themselves on the same side of a fight against another prestigious Italian financial institution: Mediobanca.
On Saturday the investment bank’s shareholders will have to choose between a list of 15 board directors brought forward by chief executive Alberto Nagel and a competing minority roster picked by the Del Vecchios’ vehicle, which is expected to secure Caltagirone’s support.
At stake is not just Mediobanca’s governance but also the future of Generali, in which the Milanese lender, the Del Vecchios’ holding company Delfin, and Caltagirone are the largest shareholders.
The machinations at the top of Italian finance could also have wider repercussions for Corporate Italy, where Mediobanca, Generali and a select few billionaire families with crossholdings spanning companies and industries have long been power brokers.
Mediobanca’s boardroom struggle has more than a few echoes of the Generali tussle last year. In April 2022 — two months before he died — eyewear entrepreneur Leonardo Del Vecchio lent his backing to Caltagirone’s unsuccessful attempt to overhaul the insurer’s board when it was put up for re-election, an occasion that only comes along every three years.
It is usual practice for many listed companies in Italy to present shareholders a list put together by the outgoing board of directors which includes a chief executive and chair candidate and one or more slates that supply directors representing minority shareholders.
On paper the situation at Mediobanca is no different. In reality, it represents a watershed moment for the Milanese financial institution and potentially for Italy’s corporate governance system.
Delfin is Mediobanca’s largest shareholder with just under a 20 per cent stake. It is putting forward five candidates on top of the slate suggested by Assogestioni, the funds association; a sign that it wants to shake up an entrenched management team. Mediobanca’s chair is on course for his fourth three-year term and the chief executive has been in post for 15 years.
It is unlikely that Delfin will secure all five of the board seats it is seeking: proxy advisers including Glass Lewis and Institutional Shareholder Services have recommended that investors back the Mediobanca-endorsed list.
But the Italian parliament is discussing changes to corporate governance rules to curb the ability of the existing board to renominate directors and expand the influence of minority investors such as Delfin and Caltagirone, who hold substantial minority stakes, in determining who sits on the board.
Proponents say the amendments would safeguard the interests of long-term minority investors who are often neglected as board directors concentrate too much power into their own hands.
The reforms could, in future, provide a spur to Delfin and Caltagirone’s efforts at Mediobanca and Generali — as well as potentially giving French media conglomerate Vivendi the upper hand at telecommunications group Telecom Italia, for example, where it owns a 23 per cent stake.
For the time being, however, Delfin is barred from acting as anything other than a financial investor in Mediobanca because of its lack of a banking licence. Under the terms of a 2020 agreement with the European Central Bank, the Luxembourg-based company has agreed not to seek to exercise a dominant influence over the Milanese lender.
People close to Delfin insist its efforts to secure up to a third of the board seats were inspired by disquiet over the bank’s failure to make adequate succession plans.
Delfin has also raised concerns about the bank’s strategy in private conversations with Mediobanca’s management, according to people familiar with the discussions. The expansion of the lender’s wealth management and investment banking businesses have been sticking points, they said.
Mediobanca’s share price performance is not helping the rebels: shares have climbed more than 80 per cent during the three-year term of the current board, while annual revenues have increased from €2.5bn in 2020 to €3.3bn in the year to June 2023.
“Mediobanca’s profits have risen and it has been paying a good dividend, so in such a scenario it’s unusual for a financial investor to take such a stance,” said Azzurra Guelfi, analyst at Citigroup.
Delfin — and EssilorLuxottica — chief executive Francesco Milleri said in an interview with local media this week that Delfin was “an institutional investor that aims for excellent returns on investments and wants to give a push to our country and Mediobanca”.
The rebellion could nonetheless prove disruptive.
“The attempted overhaul of Mediobanca’s board is Delfin’s way to put pressure on Nagel [to come up with a succession plan], and consequentially Caltagirone’s first step to gain the upper hand over the future of Generali,” said one Milan-based banker.
Delfin, Caltagirone and Mediobanca declined to comment.
Last year, Mediobanca’s top management opposed the campaign to replace the top management at Generali, on which it relies for one-third of its annual profits. Caltagirone and Del Vecchio have for years accused the bank of holding back Generali’s expansion.
After a bitter exchange of letters this summer with Mediobanca’s Nagel about the upcoming renewal of the bank’s board, Caltagirone has taken a back seat in the drive against the lender’s management.
But people familiar with his thinking say that is because Mediobanca is just one piece of the puzzle. His end game is taking control of Generali, they say, where he has another opportunity to shake up the board in 18 months’ time.
As one of the people involved in the conversations put it: “This is a poker game.”
Qatar’s super-fixer role in Israel-Hamas war brings praise and scrutiny
Gulf state takes plaudits for work in release of hostages that also draws attention to its relations with the Islamist group
One day, it was US secretary of state Antony Blinken flying into Qatar to secure Doha’s support in releasing hostages seized by Hamas and preventing the militant group’s war with Israel escalating into a regional conflict.
The next, it was Iran’s top diplomat Hossein Amirabdollahian touching down in the Gulf state condemning Israel and warning that its bombardment of Gaza risked broadening the conflict. Amirabdollahian then met Ismail Haniyeh, the Doha-based political leader of Hamas, and lauded the “Palestinian victory”, referring to the militant group’s October 7 attack that triggered the war.
The visits this month, coupled with a flurry of phone calls with world leaders, underlined how Qatar is once more on the diplomatic front lines of an international crisis — a role that has brought the gas-rich state both praise and scrutiny.
In the weeks since Hamas’s deadly assault triggered war with Israel, western leaders have turned to Qatar as their main interlocutor to secure the release of the more than 200 people, including US and European citizens, captured by the militant group.
So far, its efforts have been successful. Hamas released four civilian hostages through Qatar’s mediation, earning it the gratitude of US President Joe Biden. Doha is now working to broker a deal to secure the freedom of about 50 others, said people briefed on the talks.
Qatar stands out because it has hosted Hamas’s political office since 2012, has poured hundreds of millions of dollars of aid into Gaza and is one of the few states that has good relations with the US and Iran.
But given the scale of the Hamas atrocities on October 7 and the horror that the mass assault on Israel triggered in western capitals, Qatar is also facing questions about its willingness to host the political leadership of the Islamist group in Doha.
“It’s a double-edged sword and the Qataris need to have the right message, because although the Americans have expressed gratitude and they’re earning brownie points from the US, their image is getting bruised,” said Mehran Kamrava, professor of government at Georgetown University Qatar.
Doha has spent the past decade carving out a role as a mediator, seeking to use its willingness to talk to those others are reluctant to and project itself as an international “problem solver”.
In part this is an indication of the ambitions of the wealthy state that has long sought to punch above its weight. But Qatar also views its diplomatic efforts as integral to its security strategy, aware of its vulnerabilities in a volatile region surrounded by larger neighbours, and the need to ensure its relevance to the US and other powers.
It is a strategy that has led Doha to become involved in myriad negotiations. Qatar has hosted an office of the Taliban since 2013 and was vital to the evacuation of Afghans who worked for the US and coalition entities, as well as others at risk of reprisals after the US’s chaotic withdrawal from Afghanistan two years ago. This month, it brokered a deal to reunite four Ukrainian children with their families after they were separated during Russia’s invasion of Ukraine.
In September, Qatar was instrumental in a prisoner exchange deal between the US and Iran that led to Washington unfreezing $6bn of Tehran’s oil money. The funds were transferred to accounts in Doha where it is being monitored to ensure it is only used for non-sanctioned goods.
It has also facilitated secret talks between the Biden administration and Nicolás Maduro in the hope of mediating an agreement under which Venezuela’s president would agree to hold free and fair elections and release political prisoners in return for US sanctions relief, a person briefed on the talks said.
Biden last year designated the Gulf state, which also hosts the US’s biggest military base in the region, a major non-Nato ally.
But the opprobrium triggered by Hamas’s attack, and outrage in the Muslim world over the retaliatory bombardment of Hamas-controlled Gaza, has thrust Qatar into a highly charged and polarising crisis.
The Hamas-led assault killed more than 1,400 people, according to Israeli officials. More than 6,500 people have been killed in Gaza since Israel launched its offensive, according to health officials in the Hamas-controlled Palestinian enclave.
“The Israel question is much more volatile and has a lot of resonance in the American public and political arena,” said Kristin Diwan, a senior resident scholar at the Arab Gulf States Institute in Washington. “Relations with the Biden administration are excellent and there’s been huge appreciation of what Qatar has been doing. That cuts them some slack and understanding in the current situation, but certainly it sort of depends how things turn.”
Qatar has long supported the Palestinian cause. But Doha has also been accused by neighbours in the past of sponsoring and financing Islamist groups across the region. This was part of the justification used by Saudi Arabia and the United Arab Emirates in 2017 when they led a more than three-year regional embargo on Qatar. Doha denied the allegations.
Qatari officials say the state does not sponsor or fund Hamas, but agreed to host the political office after the US requested it open a channel with the group more than a decade ago. Hamas’s political leaders were previously based in Damascus, but left as a civil war engulfed Syria.
A Qatari official says Washington first asked Doha to open indirect channels in 2006, after Hamas won Palestinian elections. The following year, the militant group took control of the strip after an internal conflict with Fatah, a rival Palestinian faction.
Doha has also been one of the main donors to Gaza over the past decade, spending $10mn a month to provide support to the hemmed-in strip’s poorest 100,000 families and to pay civil servants, such as teachers and doctors. It also provides funding to supply electricity to the strip.
“[Gazans] aren’t able to build up a strong domestic economy, so what is the alternative?” the Qatari official said.
The support was co-ordinated through UN agencies and Israel, the official added, with the Israeli government having “complete oversight” over the aid.
Qatar has no formal relations with Israel, but it did open an Israeli trade office in Doha, which was closed after the 2008/09 war between Israel and Hamas.
“With all mediation we’re part of, dialogue shouldn’t be confused with endorsement,” the official said. “We talk to different groups because we believe that open channels of communication are the only way to build trust and resolve differences. The alternative is more suffering on all sides.”
Kamrava described Qatar’s relationship with Hamas as “not ideological but strategic”.
“If you’re the Americans, do you want Hamas to be in Qatar or do you prefer them to be in Damascus and Tehran and be beholden to those kinds of actors,” Kamrava said.
Criticism of Qatar’s links to Hamas has been limited. Some US lawmakers and rightwing lobby groups have called for Hamas’s office in Doha to be shut.
Hours before Sheikh Tamim bin Hamad Al-Thani, the Qatari emir, landed in Berlin four days after the Hamas attack, Germany’s foreign minister Annalena Baerbock said Qatar had a responsibility to “clearly stand up to this most brutal terror”. The FDP, part of Germany’s coalition government, later called for last year’s gas deal concluded with Qatar to “immediately be put on ice”.
Yet other western governments have welcomed Qatar’s role. And France, Italy and the Netherlands have all signed long-term agreements for Qatar to supply liquefied natural gas since the October 7 attack.
Even Israel’s national security adviser this week praised Doha’s efforts to secure the release of the hostages. “Qatar’s diplomatic efforts are crucial at this time,” Tzachi Hanegbi said in a social media post.
The question, analysts say, is whether pressure builds on Qatar over time concerning its ties to Hamas. “You talk to some Qataris and they say ‘no matter what we do, we get criticised, and so let’s not care, let’s do the right thing, regardless of the cost’,” Kamrava said. “Then there are some who see it as a real challenge [for Qatar].”
After Hours Summary: Busy earnings night, MS names new CEO; PI +18%, FLEX +9.6%, NOW +5.2%, IBM +1.3% higher on earnings; ALGN -23.3%, MXL -10.9%, EW -6.6%, WHR -5.1%, META -1.2% lower on earnings; EDR +24.2% pops on strategic review
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: PI +18%, NOVA +12.4%, FLEX +9.6% (also to spin off remaining interest in NXT), EGBN +7.5%, FIBK +5.8%, FLS +5.7%, NOW +5.2% (also announces strategic partnership to power GCCs), CMPR +5.2%, CCS +5.1%, CNMD +4.7%, ETD +4.4%, TNET +4.2%, WFG +4.1%, ORLY +4%, NTGR +3.5%, PEGA +3.4%, LXFR +2.9% (also initiates strategic review), CASH +2.6%, AGI +2.4%, BKR +2%, ESI +2%, PLXS +2%, ROL +2%, STC +2%, BHE +1.9%, KRC +1.9%, CHDN +1.4%, CVBF +1.3%, IBM +1.3%, VMI +1.3%, EPR +1.2%, EQT +1.1%, AR +1%, SUI +1%, AM +0.8%, TROX +0.7% (also Co-CEO Jean-François Turgeon to retire), LC +0.4%, ASGN +0.2%, VICI +0.2%, AMP +0.1%, CP +0.1%, VLTO +0.1%, WCN +0.1% (also increases dividend)
Companies trading higher in after hours in reaction to news: EDR +24.2% (to evaluate strategic alternatives), CBUS +4.9% (files $200 mln mixed shelf securities offering), BIIB +3.4% (Eisai presents new LEQEMBI interim study results), VSTO +2.8% (Colt CZ Group discloses 5.7% active stake; may engage in discussions), CHH +2% (CHH calls on WH to engage in good faith M&A discussions), RKLB +1.7% (receives FAA authorization to resume launches from Launch Complex 1), AMSF +1.6% (declares special dividend of $3.50/sh), DTC +0.8% (CFO to step down; reaffirms guidance), MPC +0.8% (increases dividend), UPS +0.6% (UPS to acquire Happy Returns from PYPL), SIRI +0.5% (increases dividend), LUV +0.3% (reaches tentative labor deal with flight attendants), MRO +0.2% (increases dividend), LII +0.1% (acquires A.E.S. to expand commercial HVAC services)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ALGN -23.3%, SLP -14.5%, MXL -10.9%, MEOH -9.6%, MAT -8.3%, EW -6.6%, CYH -5.8%, WHR -5.1%, ALSN -4.8%, OII -4.7%, VKTX -4.6%, MYRG -4.5%, AGR -4.2%, FTAI -4%, ENSG -3.3%, KALU -3.1%, URI -2.8%, CLS -2.8%, GSHD -2.1%, CACI -2%, EIG -2%, PPC -2%, UCTT -2% (also acquires HIS Innovations Group), MAA -1.8%, LSTR -1.7%, QS -1.6%, NXT -1.5% (also announces plan to separate from FLEX), ATR -1.4%, WU -1.4%, META -1.2%, INVH -1.1%, KLAC -1%, TER -0.6%, EG -0.3%, EQIX -0.3% (also increases dividend), WH -0.3% (also CHH calls on WH to engage in good faith M&A discussions), MOH -0.1%
Companies trading lower in after hours in reaction to news: LIAN -1.2% (announces presentation of data from Phase 2a study of Infigratinib), DKL -0.8% (increases dividend), PYPL -0.2% (UPS to acquire Happy Returns from PYPL), MS -0.2% (Edward Pick will become CEO on Jan 1; James Gorman to become Exec Chairman)