>>> Up
* Adecco Raised to Outperform at BNPP Exane; PT 43 Swiss francs
* Archer Raised to Buy at ABG; PT 1.30 kroner
* Hays Raised to Outperform at BNPP Exane; PT 125 pence
* Randstad Raised to Outperform at BNPP Exane; PT 61.40 euros
* Randstad Raised to Outperform at BNPP Exane; PT 61.40 euros
* RS Group Raised to Outperform at BNPP Exane; PT 965 pence
>>> Down
>>> Down
* Ediston Property Cut to Hold at Peel Hunt
* Elkem Cut to Hold at Nordea
* Gerresheimer Cut to Hold at Hauck & Aufhaeuser; PT 125 euros (+)
* Investors House Cut to Accumulate at Inderes; PT 5.60 euros
* JDE Peet's Cut to Hold at ING; PT 27.53 euros
* Sogn Sparebank Cut to Sell at Norne Securities; PT 160 kroner
* Sogn Sparebank Cut to Sell at Norne Securities; PT 160 kroner
* Sparebanken Vest Cut to Hold at Arctic Securities; PT 116 kroner (+)
* Sparebanken Sor Cut to Hold at Arctic Securities; PT 140 kroner (+)
* Thunderful Group Cut to Hold at ABG; PT 12 kronor
>>> Initiation
* Boku Rated New Buy at Jefferies; PT 177 pence
>>> Initiation
* Boku Rated New Buy at Jefferies; PT 177 pence
* CRH Assumed Buy at Citi; PT 57 euros
* Meta Platforms Rated New Outperform at Wedbush; PT $350
* SAP Re-Initiated Buy at Bankhaus Metzler; PT 148 euros
>>> Call
* Axon Drivers Reflected in Price, Morgan Stanley Is Equal-Weight
>>> Call
* Axon Drivers Reflected in Price, Morgan Stanley Is Equal-Weight
* Gerresheimer Downgraded as H&A Sees Lees Attractive Risk/Reward (+)
Woodside chief calls European gas price spike ‘irrational’
Australian oil and gas giant says talks with unions remain constructive as strike fears loom over markets
The sharp rise in European natural gas prices caused by concerns over potential strikes in Australia is “irrational” and a “clear sign of the fragility of the market”, according to the chief executive of Woodside Energy, one of the country’s largest oil and gas producers.
The prospect of industrial action at sites operated by Woodside and Chevron off the coast of Western Australia has rocked international energy markets over the past week.
Fears of disruption at sites that generate about 10 per cent of global supply sent prices in Europe soaring 40 per cent last week before falling back.
They rose again on Monday by 9 per cent as the Offshore Alliance, representing offshore gas workers, said it would push for industrial action if there was no resolution after talks with Woodside on Wednesday.
Australia’s biggest independent oil and gas producer on Tuesday reported first-half net profits of $1.7bn, up from $1.6bn a year earlier and a record result according to the company. Revenues rose 27 per cent to $7.4bn.
The Offshore Alliance said in a statement that it would not allow Woodside to present a “cupboard is bare” narrative in light of the results.
Meg O’Neill, chief executive of Woodside, told the Financial Times that talks, which have been ongoing since the start of the year, remained “constructive”, despite the increasingly bitter rhetoric.
Workers are pushing for better terms around pay, job security and working conditions. O’Neill said the company was “doing its best” to come to an agreement but also had a duty to protect shareholder interests.
The company has contingency plans to deal with industrial action, but O’Neill said it was still unclear what the union would do. Industrial action could range from moves such as slow operations to a full walkout, according to the company.
O’Neill said the market reaction to the prospect of strikes was “fairly irrational” and a clear sign of its fragility, indicating that the global natural gas market remained “finely balanced” heading into the European winter.
She said the world had improved its preparation for supply disruption compared with 2022, when Russia’s invasion of Ukraine pushed natural gas prices to record highs and stoked fears of blackouts across Europe.
While the natural gas market had become more stable in 2023, the Chinese economy had not “taken off” as some had expected, following the loosening of restrictions put in place during the pandemic, O’Neill added.
However, Chinese buyers had been active in signing long-term natural gas contracts, particularly from US suppliers, a sign of confidence in the country’s long-term economic prospects, she said.
DAX:
- Infineon (IFX TH) +1.4%
MDAX:
- Nordex (NDX1 TH) +1.9%
- Befesa (BFSA TH) +1.6%
- Gerresheimer (GXI TH) -0.7%
- Gerresheimer Cut to Hold at Hauck & Aufhaeuser; PT 125 euros
SDAX:
- SFC Energy (F3C TH) +6%
- EQS-News: SFC Energy reports record sales and earnings in the first half of 2023
- Hypoport (HYQ TH) +3.5%
- Deutz (DEZ TH) +1.2%
- Borussia Dortmund (BVB TH) +1.2%
- Eckert & Ziegler (EUZ TH) +1%
Signs deal for streaming Call of Duty and other Activision Blizzard games; No financial terms disclosed
- Announced a transaction giving Ubisoft the cloud streaming rights for Call of Duty and all other Activision Blizzard titles releasing over the next 15 years once Microsoft’s acquisition of Activision Blizzard is completed. This will enable Ubisoft to bring cloud streaming access of Activision Blizzard games to more players all around the world. These rights will exist in perpetuity.
These rights will further strengthen Ubisoft’s content offering through its subscription service Ubisoft+, as well as allowing Ubisoft to license streaming access of the Activision Blizzard catalog of games, including future releases, to cloud gaming companies, service providers, and console makers. This will help expand access for players across all streaming services. Ubisoft’s expertise in developing online services and distribution along with its relationships with streaming providers will continue to provide more choice for players to engage in the games they love from both Ubisoft and Activision Blizzard. Ubisoft+ will be able to further expand its growing library of titles enabling players the ability to play across multiple platforms including PC, Xbox consoles and Amazon Luna with a single subscription to Ubisoft+ Multi Access, and on the PlayStation platform with Ubisoft+ Classics. The arrangement will give Ubisoft exclusive worldwide rights to stream the Activision Blizzard games, except for non-exclusive rights to stream in the European Economic Area, for all existing and current Activision Blizzard games as well as those to be released over the next 15 years once Microsoft’s acquisition of Activision Blizzard is completed.
(3x3)rd time’s the charm?
Ninth question leads to another look at Casino’s CDS
Things are looking a bit default-ier for French supermarket Casino.
Moody’s said Friday that more than 30 days had passed since a payment was due on €400mn of bonds maturing in 2026, meaning the grace period for a payment has expired:
Moody’s Investors Service (Moody’s) has today appended a limited default (LD) designation to Casino Guichard-Perrachon SA’s (“Casino” or “the company”) probability of default rating (PDR), changing it to C-PD/LD from C-PD. All other ratings are unaffected. The outlook is negative.The “/LD” indicator reflects a payment default, following the expiration of the thirty-day grace period on the coupon payment that was due on 17 July 2023 in relation to the company’s €400 million backed senior unsecured notes due in January 2026. The “/LD” indicator reflects that the payment default on a selected debt instrument qualifies as a limited default under Moody’s definition of default, which is intended to capture events whereby issuers fail to meet debt service obligations outlined in their original debt agreements.
OK, so the “appended a limited default designation” that hasn’t affected the company’s other ratings?
More importantly, is this apparently missed payment a default that would meet the standard of becoming a real-life Credit Event and trigger a CDS payout? The Determinations Committee decided Monday to consider the question, but no decision has yet been announced at pixel Tuesday (early morning UK time). A company can miss an interest payment scheduled during the bond’s original sale and still not technically be a “Credit Event”, of course.
But the statements out there about whether this would qualify as a missed payment — and whether the note holders agreed to forbearance — are rather confusing.
From July 3:
Holders of the Senior Secured Notes issued by [Casino subsidiary] Quatrim have agreed to, for the duration of the conciliation proceedings, waive any default, event of default or cross-default arising from the herein-mentioned suspension of payments.The corresponding waiver was however not obtained from holders of CGP’s Senior Unsecured Notes due 2026 and 2027. As such, a cross-acceleration may be triggered under these notes in the case of a suspension of payments of debts which outstanding principal amount exceeds 40m€. Further, such holders did not agree to forbear from exercising any of their enforcement rights in relation to the non-payment of interest due to them under their notes (consisting of approximately €12mn and €14mn due respectively on July 15 and October 15) for the duration of the conciliation proceedings. Similarly, the holder of the bonds issued by Monoprix Exploitation responded negatively to the conciliators’ requests.The Group will therefore request from the President of the Commercial Court, in the coming days, the application of délais de grâce pursuant to article L. 611-7 of the Commercial Code. For the other groups of creditors, a reply to the conciliators’ (conciliateurs) requests is expected in the next few days. The creditors’ replies, received or to be received, do not have any impact on the continuation of the conciliation proceedings.
Unless we’re seeing things, that seems to contradict a company report from early June that was published under the two ISINs for the company’s unsecured bonds due in 2026 and 2027. (The Quatrim bonds mentioned above appear to mature in 2024.)
Interesting! Also: On average, from March 25 through June 23 of this year, there was daily notional trading volume of around $50mn in Casino’s CDS, with 16 trades per day, according to the DTCC. That compares with trading volume of $23mn and 4 trades each day, on average, for the 1000 borrowers with the most active CDS markets.
>>> Up
* Adecco Raised to Outperform at BNPP Exane; PT 43 Swiss francs
* Archer Raised to Buy at ABG; PT 1.30 kroner
* Hays Raised to Outperform at BNPP Exane; PT 125 pence
* Randstad Raised to Outperform at BNPP Exane; PT 61.40 euros
* Randstad Raised to Outperform at BNPP Exane; PT 61.40 euros
* RS Group Raised to Outperform at BNPP Exane; PT 965 pence
>>> Down
>>> Down
* Ediston Property Cut to Hold at Peel Hunt
* Elkem Cut to Hold at Nordea
* Investors House Cut to Accumulate at Inderes; PT 5.60 euros
* JDE Peet's Cut to Hold at ING; PT 27.53 euros
* Sogn Sparebank Cut to Sell at Norne Securities; PT 160 kroner
* Sogn Sparebank Cut to Sell at Norne Securities; PT 160 kroner
* Thunderful Group Cut to Hold at ABG; PT 12 kronor
>>> Initiation
* Boku Rated New Buy at Jefferies; PT 177 pence
>>> Initiation
* Boku Rated New Buy at Jefferies; PT 177 pence
* CRH Assumed Buy at Citi; PT 57 euros
* Meta Platforms Rated New Outperform at Wedbush; PT $350
* SAP Re-Initiated Buy at Bankhaus Metzler; PT 148 euros
>>> Call
* Axon Drivers Reflected in Price, Morgan Stanley Is Equal-Weight
>>> Call
* Axon Drivers Reflected in Price, Morgan Stanley Is Equal-Weight
Asian equities mostly advanced Tuesday following a rally in big tech that spurred a rebound on Wall Street, though an overnight selloff in Treasuries kept risk sentiment in check. Japanese stocks were the biggest gainers while Hong Kong’s Hang Seng Index was set to snap a seven-day run of losses. Shares on China’s mainland fluctuated as the government’s call for increased credit support on some products offered limited boost. Shares of Asian electric vehicle makers gained after Tesla Inc. was up the most since March on Monday. Semiconductor-related stocks climbed amid optimism over Nvidia Corp.’s earnings due Wednesday. In Australia, BHP Group Ltd. fell after the world’s biggest miner reported a 37% decline in full-year profit, with China’s weak recovery sapping demand for commodities. The 10-year bond yield in Japan rose to the highest since 2014, raising speculations that the Bank of Japan may come into the market with an unscheduled bond-buying operation to slow gains. Rates were also higher in Australia and New Zealand. The yield on 10-year inflation-protected Treasuries on Monday pushed over 2% for the first time since 2009. Not long after, the yield on 10-year notes without that protection had hit a level last seen in late 2007. US stock futures were mostly flat after the S&P 500 Index halted a four-day drop Monday and the Nasdaq 100 Index rose about 1.7%. In late US hours, SoftBank Group Corp. semiconductor unit Arm filed for what is set to be this year’s largest US initial public offering. The dollar weakened against all of its Group-of-10 peers. The yen strengthened, but remained near a level that triggered last year’s first yen-buying intervention since 1998, keeping traders focused on potential comments from currency officials. two of Wall Street’s top strategists are at odds about the outlook for US stocks following a three-week run of declines as debate rages over whether the economy can avoid a recession. While Morgan Stanley’s Michael Wilson — a stalwart equity bear — says sentiment is likely to weaken further if investors are starting to “question the sustainability of the economic resiliency,” his counterpart at Goldman Sachs Group Inc., David Kostin, says there’s room for investors to further increase exposure if the economy stays on course for a soft landing. oil and gold were little changed. Us after Hours FN +16.3%, ZM +4.4% up on earnings; TEVA +0.8% ticking higher after settling charges with DOJ; NDSN -4.8% down following earnings; EBS -5.2%, AAP -1.4% slipping on index change.
Nikkei +0.80% Hang Seng -0.09% CSI -0.52% Shanghai -0.46% Shenzen -1.17%
Eur$ 1.0901 CNH 7.2926 CNY 7.2882 JPY 145.93 GBP 1.2775 CHF 0.8779 RUB 93.7154 TRY 27.1991 WTI$ 80.65 Gold 1,896 BTC 26,027 -0.32% ETH 1,662.8 -0.55%
S&P -0.11% Nasdaq -0.16% EuroStoxx +0.45% FTSE +0.09% Dax +0.40% SMI
Macro :
- Switzerland to Probe Botched Sale of Tanks Destined for Ukraine
- Musk Told Pentagon He Spoke to Putin, New Yorker Says
- Strategists See Dip-Buying Shot Arising From Stock Rally’s Pause
- European Travel Recovery Hype Loses Steam as Peak Earnings Pass
- Citi’s Montagu Says Short Futures Positioning Rose in US, Europe
Keep an eye on :
Keep an eye on :
- ACX SM : *CITI OPENS UPSIDE 30-DAY CATALYST WATCH ON ARCELORMITTAL SA
- ARBN SW : Arbonia 1H Net Loss CHF2.0M Vs. Profit CHF11.7M Y/y
- BAKKA NO : Bakkafrost 2Q Operating Ebit Meets Estimates
- CTM SS : Catena Media 2Q Ebitda EU2.49M Vs. EU7.31M Y/y
- ENT LN : Entain Says About 99.3% of STS Holders Accepted Tender Offer
- EQNR NO : Equinor Is Said to Explore Sale of $1 Billion Azerbaijan Assets
- ISN SW : Intershop 1H Net Income CHF52.8M Vs. CHF36.4M Y/y
- LDO IM : Leonardo CEO Under Investigation Over His Time as Italy Minister
- LDO IM : Leonardo CEO Under Investigation Over His Time as Italy Minister
- S US : SentinelOne Explores Options Including a Sale: Reuters
- VOLVB SS : Volvo Group Chairman Carl-Henric Svanberg Declines Reelection
Food companies face investor calls to curb antibiotic use on farms
Awareness about the negative impact of antimicrobial resistance on shareholder returns is growing
Food companies are facing increasing pressure from their investors over the overuse of antibiotics in the food supply chains as campaigners turn to shareholder muscle to tackle the global scourge of antimicrobial resistance.
About 70 per cent of antibiotics are consumed by animals to prevent disease, and companies that produce, or buy, large amounts of meat are becoming a focus for campaigners.
As investors become more aware of the threat that antimicrobial resistance can pose to returns, the number of resolutions at annual meetings putting pressure on household-name companies to address the growing risk of AMR has risen significantly over the past few years.
The move reflects campaigners’ growing determination to harness shareholder pressure to confront an issue increasingly seen as a threat to global health rivalling the climate crisis.
AMR has been associated with almost 5mn deaths a year globally and has cost the world $100tn in global economic losses, according to the World Health Organization.
Investors are a vital weapon in the fight but they have yet to be fully deployed, according to Dame Sally Davies, the UK government’s special envoy on antimicrobial resistance. “Politicians and policy can do a lot but investors are very powerful,” she added.
Several bodies are in the vanguard of the push to alert investors to the threat of AMR. In 2020, Davies helped to launch the Investor Action group at the World Economic Forum in Davos, which aims “to leverage investor influence to combat drug-resistant superbugs”.
It includes the Fairr initiative, an investor network focused on the risks around intensive livestock rearing. It has the backing of about 370 investors from around the world, with $71tn in combined assets.
The Shareholder Commons, a non-profit advocacy group, has helped to organise a number of the resolutions at annual meetings designed to persuade food companies to limit antibiotic use, while the Cambridge Universal Owners group, established by pension fund leaders and academics at the university, aims to enlist pension and endowment funds in the fight against AMR.
Belinda Bell, from the Finance for Environmental and Social Systemic Change Centre, which convenes the Cambridge group, said collated data suggested that voting against directors could lead to change even in cases where the vote failed to pass. “We’re seeing a lot more voting against directors at this AGM season and we’ll be seeing more,” she said.
Davies said that involving entities with a long-term mindset such as pension funds, sovereign wealth funds and insurance companies will be crucial in the fight against AMR. The investors rely on generating income for decades and prize a stable society and environment, rather than focusing exclusively on short-term profits and dividends.
Last month, Fairr announced that 71 institutional investors and investor representatives, representing $15.2tn in combined assets, were training a spotlight on 12 North American fast-food restaurant companies, including McDonald’s, Yum Brands, owners of KFC and Pizza Hut, and Restaurant Brands International, owners of Burger King.
As some of the world’s largest purchasers of animal protein, these companies “could be exposed to financially material regulatory and reputational risks from inadequate policies for managing antibiotic use in their supply chains”, Fairr warned.
McDonald’s said it was working to cut the use of antibiotics in its supply chain, including not permitting routine use of medically important antibiotics in livestock rearing. Restaurant Brands International said it took “the issue of responsible, sustainable sourcing seriously” and was making good progress. Yum Brands did not respond to a request for comment.
Katie Frame, responsible for engagement and stewardship at £726bn asset manager Schroders, which is backing the initiative, said there was “increasing evidence about [AMR’s] relevance to the investment industry”. Comparing it with climate change, she added that AMR was “not one of those things where we’re going to see a sudden shock to the system . . . but there’s going to be this gradual creep and this gradual impact on society”.
Campaigners acknowledge that investor attitudes will have to change if the drive is fully to gain traction. Sara Murphy, chief strategy officer of the Shareholder Commons, said that investors tended to “recalcitrantly [focus] on the idea that every single company should be maximising its own internal financial returns”.
A resolution at McDonald’s annual meeting this year, calling for the adoption of a company-wide policy to phase out the use of antibiotics for disease prevention in its beef and pork supply chains, was backed by prominent fund managers including Legal & General Investment Management and Amundi. However, influential proxy advisory groups such as ISS and Glass Lewis recommended voting against it.
ISS said that McDonald’s policies appeared to “align with regulatory requirements around antibiotic use for disease prevention and the requested target is not a market norm.” Glass Lewis said it did not believe the company’s current handling of the issue had presented a risk to shareholder value nor that supporters of the resolution had shown that the fast-food group would “not be responsive to consumer or regulatory demands”.
Nevertheless, some investors feel momentum is building behind the need to control antibiotic usage. Peter van der Werf, head of engagement at asset management firm Robeco, said that in the past a lot of companies had been defensive about the use of the drugs as a necessity to raise and keep animals on the farms.
Over time, he suggested, “there has been a lot of appreciation that they need to develop more responsible use of antibiotics”. However, he warned that the “devil was in the detail” and much depended on how policies were defined and how strictly they were adhered to.
Sophie Deleuze, lead ESG analyst at Candriam, a €139bn asset manager, said when analysing companies involved in livestock production, it paid attention to the “policy and stance on the reduction of the antibiotics use”.
Candriam also scrutinised the extent to which a company encouraged or supported its suppliers to use antibiotics in a more sustainable way and “values positively” companies that invested in finding alternatives in order to “actively combat the development of AMR”, she added.
Not all observers agree about the level of culpability that food companies should bear for reducing AMR. Eva Gocsik, senior analyst for animal protein at Rabobank, a leading lender to the sector, said antibiotic use in livestock production was “only one potential contributor” to the problem and it was “difficult to scientifically establish the livestock sector’s exact contribution to AMR in humans”.
Campaigners acknowledge that the issue has yet to grip investors as powerfully as climate change has done. However, Fairr said its support had grown more than 200 per cent since 2019 with $15.2tn in combined assets now backing the push for changes to companies’ AMR practices.
The volume of shareholder resolutions over the past 18 months was a clear sign that “investors are actually willing to really put their names out there to try to bring AMR to front and centre of companies’ priorities”, said Sofía Condés, head of investor outreach at the Fairr initiative.
At the Shareholder Commons, Murphy called on investors to take a wider view of their responsibilities. As part of their stewardship on behalf of their customers, she said they needed to focus on “the health of the systems that support their clients’ portfolios as opposed to any individual company’s own enterprise value”.