>>> TradeGate Pre-Market Indications

DAX:
  • Zalando (ZAL TH) +4.4%
    • Zalando Narrows FY Adjusted Ebit Forecast, Beats Estimates
  • Beiersdorf (BEI TH) +0.8%
    • Beiersdorf 1H Adjusted Ebit Beats Estimates (1)
  • RWE (RWE TH) +0.5%
  • Qiagen (QIA TH) -0.5%
  • Heidelberg Materials (HEI TH) -0.5%
  • BASF (BAS TH) -0.6%
  • Merck KGaA (MRK TH) -1.3%
    • Merck KGaA Lowers Outlook Amid Slump in Covid, Chips Demand
  • Infineon (IFX TH) -3.8%
    • Infineon Sees 4Q Segment Result Margin About 25%, Est. 25.8%
MDAX:
  • Lufthansa (LHA TH) +2%
    • Lufthansa Sees FY Adj. Ebit Above EU2.6B on ‘Strong’ 2H Outlook (1)
  • Telefonica Deutschland (O2D TH) +1.3%
    • Telefonica Deutschland Cut to Equal-Weight at Barclays
  • Freenet (FNTN TH) +0.7%
  • Duerr (DUE TH) +0.6%
    • Duerr 2Q Adjusted Ebit Misses Estimates
  • Delivery Hero (DHER TH) +0.5%
  • Aixtron (AIXA TH) -0.5%
  • Thyssenkrupp (TKA TH) -0.6%
  • Puma (PUM TH) -0.8%
  • ProSieben (PSM TH) -1%
    • ProSieben 2Q Adjusted Ebitda Beats Estimates
SDAX:
  • PVA TePla (TPE TH) +4.9%
    • PVA TePla Earnings Call Scheduled By Montega AG for Aug. 3
  • United Internet (UTDI TH) +1.1%
    • United Internet Raised to Outperform at BNPP Exane
  • 1&1 (DRI TH) +1%
    • 1&1 2Q Ebitda Meets Estimates
  • Deutsche PBB (PBB TH) -0.6%
  • Wacker Neuson (WAC TH) -0.6%
  • flatexDEGIRO (FTK TH) -0.7%
  • Borussia Dortmund (BVB TH) -0.8%
  • Adtran Holdings (QH9 TH) -1.1%

>>> Europe : Brokers Upgrades & Downgrades - 3rd of August 2023

>>> Up
* 1&1 Raised to Outperform at BNPP Exane
* Cranswick PT Raised to 4,620 pence from 4,000 pence at Berenberg
* Hochschild Mining Raised to Buy at Berenberg; PT 100 pence
* Revenio Raised to Accumulate at Inderes; PT 26 euros

>>> Down
* AUTO1 Cut to Hold at HSBC; PT 9 euros
* DWF Group Cut to Hold at Peel Hunt
* Elior Group Cut to Sell at Stifel; PT 1.90 euros
* Eramet Cut to Reduce at AlphaValue/Baader
* Hexagon Composites Cut to Neutral at SpareBank; PT 30 kroner
* Hexagon Composites Cut to Hold at DNB Markets; PT 31 kroner
* LEG Immobilien Cut to Add at Baader Helvea; PT 70 euros
* Novem Group Cut to Neutral at JPMorgan; PT 13 euros
* Siltronic Cut to Add at AlphaValue/Baader
* Telefonica Deutschland Cut to Reduce at HSBC; PT 1.70 euros

>>> Initiation
* Ferretti Rated New Buy at Berenberg; PT 4.70 euros
* Restore Reinstated Hold at Peel Hunt; PT 169 pence

>>> Call
* Ferretti Rated New Buy at Berenberg on Improving Fundamentals
* Hochschild Upgraded at Berenberg as Peru Permit De-Risks Story

>>> What to look at today - 3rd of August 2023

Shares in Asia fell for a third day, following losses on Wall Street, while Treasuries extended a selloff as investors digested better-than-expected US labor-market data and prepared for a rush of US government bond issuance next week. Equity benchmarks in Japan, Australia, South Korea and Hong Kong all declined, while those in mainland China were little changed. Taiwan’s markets are shut due to the approach of a typhoon. Evergrande Property Services Group Ltd., a unit of the highly indebted developer, slid by about half in Hong Kong as the company resumed trading for the first time since March 2022. Pressure on China’s property sector weighed on the country’s junk bonds, which fell for a second day. Superconductor-related shares in China also declined after a sharp rally over the past week. US equity futures were broadly flat in Asia after the S&P 500 slipped 1.4% Wednesday, its worst day since April. The Nasdaq 100 fell 2.2% and Qualcomm Inc. dropped on a tepid revenue forecast. The VIX index, known as Wall Street’s “fear gauge” rose to the highest since May.  Investors also digested news that the Treasury will issue $103 billion of securities next week, spanning three-, 10- and 30-year debt. The quarterly issuance is up from $96 billion, and slightly more than forecast. The news followed Fitch Ratings’ downgrade of the US on Wednesday. Japanese 10-year bonds also fell as investors tried to judge how far the Bank of Japan will allow yields to rise under its more flexible yield-curve control regime. The dollar was little changed after a two-day rally in muted currency market trading. The Bank of England is forecast to raise its benchmark interest rate by 25 basis points to 5.25% later Thursday. Speculation is also growing it will surprise economists by signaling an increase to the pace of bond sales as it looks to reduce its outsized footprint in the market.  Investors will be keeping a keen eye on Apple Inc. earnings due Thursday. The iPhone maker is expected to report its third consecutive year-over-year revenue decline. Amazon.com Inc. will also report quarterly results Thursday with investors and analysts closely watching its cloud computing business. oil rose after a two-day selloff, gold ticked higher and Bitcoin traded just above $29,000. US After Hours UPWK +20.9%, FARO +12.6%, CTSH +7.8% , QRVO +6.4%, MELI +5.4% higher on earnings; DXC -15%, CCRN -8%, PYPL -7.2%, QCOM -7% lower on earnings.

Nikkei -1.39% Hang Seng -0.12% CSI +0,19% Shanghai +0.01% Shenzen -0,12%

Eur$ 1,0927 CNH 7,1990 CNY 7,1908 JPY 143.88 GBP 1,2700 CHF 0,8787 RUB 93.9375 TRY 26,9708 WTI$ 79.56 Gold 1935 BTC 29,090 -0.10% ETH 1,835 -0.36%

S&P -0,05% Nasdaq -0,19% EuroStoxx -0,09% FTSE +0,06% Dax -0,16% SMI +0.03%

Macro :
- Citi Quants Favor Growth Stocks in the US as Downside Risks Rise
- Convertibles Make a Comeback, But Not Usual Suspects: ECM Watch

Keep an eye on :
- 1U1 GY : 1&1 2Q Ebitda Meets Estimates
- ABI BB : AB InBev 2Q Organic Adjusted Ebitda Beats Estimates
- ADEN SW : Adecco 2Q Adjusted Ebita Misses Estimates
- ADS GY : Adidas 2Q Greater China Sales Beats Estimates
- ATUS US : Altice USA to Pause Some Capital Spending Amid Probe
- BAVA DC : Bavarian Nordic Gets US Order, Raises 2023 Financial Forecasts
- BYW6 GY : BayWa 1H Ebit EU186.9M Vs. EU328.5M Y/y
- BEI GY ; Beiersdorf 1H Adjusted Ebit Beats Estimates
- CS FP : Axa First-Half Underlying Profit Rises on Favorable Price Trends
- CS FP : Axa to Buy Laya Healthcare From AIG Unit in €650 Million Deal
- AZE BB : Azelis 1H Adjusted Ebitda Meets Estimates
- BPE IM : BPER Banca Eyes 11%-Plus Consensus 2023 Profit Upgrade: React
- BMW GY : BMW 2Q Ebit Beats Estimates; FY Forecast Reiterated (1)
- BMW GY : BMW Raises Outlook for Vehicle Deliveries on Strong EV Demand
- CAV1V FH : Caverion 2Q Operating Profit Misses Estimates
- COR PL : Corticeira Amorim 1H Net Income Rises 8% to EU51.4m
- DEEZR FP : Deezer 1H Revenue EU233.2M Vs. EU219.4M Y/y
- DIC GY : DIC Asset 1H FFO EU22.4M Vs. EU53.0M Y/y
- DOV IM : doValue 1H Gross Rev. EU229.2M Vs. EU271.2M Y/y
- DRS US / LDO IM : Leonardo DRS Rises to New High After Lifting Outlook Midpoints
- DUE GY : Duerr 2Q Adjusted Ebit Misses Estimates
- ZIL2 GY : ElringKlinger 2Q Ebit Misses Estimates; FY Forecast Confirmed
- EVD GY : CTS Eventim Intends to Become Majority Holder in France Billet
- FAGR BB : Fagron 1H Adjusted Ebitda EU72.2M Vs. EU63.3M Y/y
- FLU AV : Flughafen Wien Raises Passengers View, Sees Results Above View
- GAM SW : GAM Holding 1H Underlying Pretax Loss CHF22.5M
- IFX GY : Infineon 3Q Revenue Meets Estimates, Infineon Sees 4Q Segment Result Margin About 25%, Est. 25.8%
- IFX GY : Infineon to Invest up to €5B More on Kulim, Malaysia, Site
- INGA NA : ING 2Q Net Interest Income Misses Estimates
- IOS GY : Ionos Maintains FY Adjusted Ebitda Margin Forecast
- LSG NO : Leroy Raised to Buy at Arctic Securities; PT 52 kroner
- LHA GY : Lufthansa Sees Third Quarter Profit Topping Pre-Pandemic Levels
- MARI AV : Marinomed Biotech Rated New Buy at Dr. Kalliwoda Equity Research
- MRK GY : Merck KGaA Cuts FY Adjusted Ebitda Forecast
- MGNS LN : Morgan Sindall 1H Revenue GBP1.94b Vs. GBP1.70b Y/y
- NOVOB DC : Pfizer, Novo Battle for Control of $2 Billion Hemophilia Market
- OERL SW : Oerlikon Cuts FY Sales Forecast, Misses Estimates
- PSM GY : ProSieben 2Q Adjusted Ebitda Beats Estimates
- RAA GY : Rational 2Q Sales Beats Estimates
- ROG SW : Roche Expands Long-Term Alliance With Sysmex
- RR/ LN : Rolls-Royce 1H Civil Aerospace Adjusted Revenue Beats Estimates
- SESG FP : SES 2Q Adjusted Ebitda Beats Estimates
- SGL GY : SGL 1H Sales Revenue EU560.5M Vs. EU549.8M Y/y
- GLE FP : SocGen 2Q Net Income Beats Estimates
- GLE FP : SocGen Settles US Probes Over Use of Unauthorized Messaging Apps
- SSE LN : UK Green Subsidies Need Revamp to Meet Net Zero, SSE CEO Says
- SCMN SW : Swisscom 2Q Ebitda Misses Estimates
- SMHN GY : Suess MicroTec 2Q Sales Meets Estimates
- TIT IM : Telecom Italia Second-Quarter Earnings Rise on Price Hikes
- TEN IM : Tenaris 2Q Net Income Beats Estimates
- UTDI GY : United Internet 1H Sales EU3.03B Vs. EU2.90B Y/y
- URW FP : Simon Property Narrows FY FFO per Share Forecast
- VIE FP : Veolia 1H Ebitda Meets Estimates
- VOD LN : 1&1 Shares Soar After German Roaming Deal With Vodafone
- VOS GY : Vossloh 1H Ebit EU49.3M Vs. EU28.9M Y/y
- ZAL GY : Zalando Narrows FY Adjusted Ebit Forecast, Beats Estimates

>>> US After Hours Summary: UPWK +20.9%, FARO +12.6%, CTSH +7.8% , QRVO +6.4%, M

After Hours Summary: UPWK +20.9%, FARO +12.6%, CTSH +7.8% , QRVO +6.4%, MELI +5.4% higher on earnings; DXC -15%, CCRN -8%, PYPL -7.2%, QCOM -7% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: UPWK +20.9%, COOK +19.7%, RELY +14.2%, LUNG +13.3%, EVGO +13% (also CEO to retire; names new CEO), FARO +12.6%, CFLT +10.9% (also names new CFO), ZETA +10.4%, CYH +9.4%, NARI +8.1%, CLX +7.9%, CTSH +7.8% (also expands generative AI partnership with Google Cloud), RUN +7.3%, MOD +6.7%, HLF +6.5%, NCR +6.5%, QRVO +6.4%, BOOT +5.4%, MELI +5.4%, SM +5.2%, U +4.7%, ALB +4.6%, DASH +4.6%, RSI +4.6%, FSLY +4.5%, CENT +4%, PACB +3.8% (also to acquire Apton Biosystems), ATUS +3.4%, KGC +3.4%, MCK +3.2% (also increases stock repurchase authorization by additional $6 bln), FROG +2.9%, KAR +2.9%, SPXC +2.9%, IIPR +2.7%, NOG +2.6%, SRI +2.6%, APA +2.5%, FICO +2.5%, NE +2.5%, IR +2.4%, SBGI +2.3%, TRIP +2.2%, CIVI +2.1%, CPE +2.1% (also share buyback program to commence in 3Q), CWAN +2.1%, EPR +2.1%, CORT +2%, EVH +2%, INFA +2%, KW +2%, MKSI +2%, NVST +2%, SITM +2%, ESTE +1.8%, ETD +1.8% (also declares $0.50 special div), BAND +1.6%, CDAY +1.5%, CSGS +1.5% (also authorizes new $100 mln share repurchase program), CW +1.4% (also raises dividend 5%), GXO +1.3%, DOX +1.2%, PSA +1.2%, SRPT +1.2%, SUM +1.1%, ALLO +0.9%, RGLD +0.9%, CF +0.8%, FRT +0.8% (also increases dividend), OHI +0.5%, WTS +0.5% (also authorizes new $150 mln share repurchase program), GKOS +0.4%, BTG +0.3%, ORA +0.1%, PLMR +0.1%, RPT +0.1%, WMB +0.1%

Companies trading higher in after hours in reaction to news: TMDX +2% (acquires assets and IP related to the Ex-Vivo Organ Support System), HWKN +2% (increases dividend, also reports earnings), NNN +0.8% (files mixed shelf securities offering), COST +0.6% (reports July comps), BWXT +0.6% (contract with TerraPower)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: DXC -15%, SDGR -13.9% (also FDA clearance IND application for SGR-2921), RVLV -10.9% (also authorizes new $100 mln share repurchase program), STAA -10.1%, NGVT -9.4%, OM -9%, GT -8.9%, RGNX -8.8%, CCRN -8%, ERII -8%, ACAD -7.2%, PYPL -7.2%, HUBS -7.1%, VAC -7.1%, QCOM -7%, HOOD -6.9%, MGM -6.7%, ETSY -6%, FWRD -5.8%, AMWL -5.6%, CODI -5%, LMND -4.9%, HST -4.6%, AFG -4.4%, MUSA -4.4%, HCC -4.1%, KN -4.1%, PK -3.8%, ECPG -3.4%, UFPI -3%, FNA -3%, TS -2.7%, JOBY -2.6%, OXY -2.4%, LESL -2.3%, WSC -2.2%, EQIX -2%, NFG -2%, UGI -2%, MMS -1.9%, NRDS -1.8%, CHRD -1.6%, MET -1.6%, CHRW -1.5%, CAKE -1.4%, FORM -1.2%, NTR -1.2% (also announces strategic actions to reduce costs), FMC -1%, MRO -1%, ADPT -0.8%, ET -0.8%, SPG -0.8%, WCN -0.8%, THG -0.6%, ACLS -0.5%, ZG -0.5%, RGR -0.4% (also increases dividend), LNC -0.2%, RMAX -0.2%, SHOP -0.2%, PR -0.2%, ALKT -0.1%, O -0.1%, PCOR -0.1%

Companies trading lower in after hours in reaction to news: RBOT -29.3% (commences $45 mln stock offering), QS -12.1% (commences $300 mln stock offering), KRP -6.9% (to acquire mineral and royalty interests valued at $455 mln; also commences 6 mln share offering) AMN -6.2% (in sympathy with CCRN earnings), GPI -2.5% (increases stock repurchase auth to $250 mln), FLR -1.9% (awarded contract for LNZA fuel facility), ELP -1.4% (Federal Court of Auditors agreed to BRL 3.7 bln), RIVN -0.8% (former Waymo CEO John Krafcik named to board), CDW -0.5% (files mixed shelf securities offering), NXPI -0.1% (CEO sold 20890 shares), BLCO -0.1% (files mixed shelf securities offering)

FT : Ferrari lifts profit outlook as buyers pay out to personalise their superca

Ferrari lifts profit outlook as buyers pay out to personalise their supercars
Spending on high-margin features such as custom paint jobs offsets continued cost inflation

Ferrari has upgraded its profit forecast after a “stunning” increase in buyers adding expensive features to their supercars boosted quarterly earnings by a third. 

Even though car sales fell 2 per cent to 3,392 between April and June compared with a year earlier, revenues rose 14 per cent to €1.5bn and pre-tax profit climbed a third to €334mn. 

The Italian group now expects to make €1.51bn to €1.54bn of adjusted profit this year, up from earlier guidance of €1.45bn to €1.5bn, with its revenues forecast also raised from €5.7bn to €5.8bn. 

At the heart of the upgrade is the rising trend for supercar buyers to spend large sums, often tens of thousands of pounds, on personalising their new models, above and beyond the lofty advertised price.

Custom paint jobs, highly coloured brake callipers, which guide the brake pads and are visible inside the wheel, and even paying for Ferrari’s crest to be emblazoned on the side of their car, are traditionally among the most popular features for the car brand, all of which carry high margins for the company. 

One growing trend is for buyers to replace normal parts of the car, such as body panels, with carbon fibre. This is much more expensive, but looks strikingly different to ordinary painted aluminium body panels, allowing owners’ cars to stand out even when compared to other Ferraris.

“The decision to revise the guidance upwards was supported in particular by stunning results in personalisations,” said chief executive Benedetto Vigna. The personalisation income was “higher than initially expected” and was “across all models, all the cars . . . and across all geographies”, he added.

As Ferrari holds back sales to increase the scarcity of its vehicles, customers “are more tailoring the cars like their personal dress”, Vigna said.

Ferrari typically allows buyers to add specifications to their vehicles around three or four months before delivery, meaning it has good visibility that the amount of personalisation will remain consistent for the rest of the year.

Rising demand for high-margin bespoke features has been behind increasing profits across the luxury car segment, with both Aston Martin and Bentley flagging them as contributors this year.

The amount being spent on options by Ferrari buyers is also likely to rise, said Bernstein analyst Daniel Roeska, as sales increase for Ferrari’s four-door Purosangue model and super-luxury Daytona SP3.

That the company beat expectations “should come as no surprise” to investors, he added, calling Ferrari’s results “Groundhog Day”, though he said some investors might be disappointed that guidance was only raised slightly.

Ferrari shares slipped just under 2 per cent to €284.5 following the release.

“Higher revenues and margins from a greater options uptake is expected to be offset by continued cost inflation” as well as higher accounting costs as the company writes down investments from new models once they begin production, Roeska added. 

>>> US CLose Dow -0,98% Sa&P -1,38% Nasdaq -2,17% Russell -1,37%

Closing Stock Market Summary

Today's trade featured an orderly stock sell off with mega caps and growth stocks pacing broad based losses. The catalyst that drove selling interest was a jump in market rates, which gave inventors an excuse to take some money off the table in a market that is overbought on a short-term basis.

Market rates had been moving lower, though, in overnight action despite the news that Fitch Ratings downgraded its U.S. credit rating to AA+ from AAA. The downgrade reflected the expected fiscal deterioration over the next three years, growing government debt, and erosion of governance related to peers. 

The 2-yr note yield and 10-yr note yield fell to 4.84% and 4.01%, respectively, at their overnight lows. Treasury yields started to climb, however, immediately after the cash open, turning sharply higher around 8:15 a.m. ET with the release of the ADP Employment Change Report. The jump in Treasury yields briefly sent the 10-yr yield past its high from July (4.094%) to a level not seen since early November.

Ultimately, yields backpedaled from their highs. The 2-yr note yield settled two basis points lower at 4.89% and the 10-yr note yield rose three basis points to 4.08%.

Pressured by the rising rates, mega cap stocks saw disproportionate selling interest, which led to a 2.1% loss in the Vanguard Mega Cap Growth ETF (MGK).

Overall, outsized moves were reserved for stocks that reported earnings since yesterday's close. e.l.f Beauty (ELF 133.19, +16.69, +14.3%) was a big winner in that respect after reporting better than expected earnings and raising guidance. On the flip side, shares of Generac (GNRC 115.95, -37.43, -24.4%) are plunged after it missed on revenue estimates and lowered net income margin guidance.

The defensive-oriented S&P 500 consumer staples (+0.3%) and health care (+0.1%) sectors were alone in the positive territory at the close. The information technology sector (-2.6%), meanwhile, sank to the bottom of the pack, pressured by its weak mega cap components and a huge loss in SolarEdge Technologies (SEDG 195.51, -43.96, -18.4%) after it reported earnings.

Weak semiconductor constituents were also a drag on the info tech sector. AMD (AMD 109.35, -8.25, -7.0%) was a losing standout, sinking after its earnings report.  The PHLX Semiconductor Index dropped x%.

The ADP report that coincided with a jump in market rates showed that an estimated 324,000 jobs were added to private-sector payrolls in July (consensus 185,000) following a downwardly revised 455,000 (from 497,000) in June. This report supports the idea that the Fed may be apt to keep rates higher for longer. As a reminder, the July Employment Situation Report will be released on Friday.

  • Nasdaq Composite: +33.5% YTD
  • S&P 500: +17.6% YTD
  • Russell 2000: +11.7% YTD
  • S&P Midcap 400: +10.8% YTD
  • Dow Jones Industrial Average: +6.4% YTD

Reviewing today's economic data:

  • The weekly MBA Mortgage Applications Index fell 3.0% with purchase applications falling 3.0% and refinance applications also falling 3.0%
  • The ADP Employment Change showed a 324,000 increase in private sector payrolls in July (consensus 185,000) following a revised 455,000 increase in June (from 497,000).
  • The weekly EIA crude oil inventories showed a draw of 17.1 million barrels after last week's draw of 600,000 barrels.

The economic calendar on Thursday will include:

  • 8:30 a.m. ET: Q2 Productivity-Prelim (consensus 1.7%; prior -2.1%) and Q2 Unit Labor Costs-Prelim (consensus 2.7%; prior 4.2%); Weekly initial (consensus 225,000; prior 221,000) and continuing (prior 1.690 million) jobless claims
  • 9:45 a.m. ET: July S&P Global US Services PMI - Final (prior 54.4)
  • 10:00 a.m. ET: July ISM Non-Manufacturing Index  consensus 53.0%; prior 53.9%); June Factory Orders (Bconsensus 2.0%; prior 0.3%) 
  • 10:30 a.m. ET: Weekly EIA Natural Gas Inventories (prior +16 bcf) 

FT : China proposes tighter limits on children’s use of tech

China proposes tighter limits on children’s use of tech
Draft restrictions pose fresh challenge to online content providers

Beijing has unveiled a new system to limit minors’ device usage and control the content young people can consume online, in a move that poses a fresh challenge to tech groups already tightly policed by the state.

The proposed rules from the Cyberspace Administration of China (CAC) require device makers, operating systems, apps and app stores to build out a new function called “minor mode” that will set time limits and curfews on usage, as well as create an age-based classification system for content.

Devices with minor mode turned on would, for instance, be mostly unusable from 10pm until 6am, according to the proposed guidelines. Minors would also be hit with pop-ups reminding them to rest after 30 minutes of usage. 

The system envisioned by Chinese authorities would allow certain smartphone functions to continue during curfew hours, such as emergency calls, educational apps or other functions approved by parents. Phones in minor mode would sync with apps so they would also function in minor mode, according to CAC’s proposal.

The new moves come two years after the state restricted minors to just three hours a week playing online games to counter their addictive qualities and promote healthier activities. State-backed media referred to gaming at the time as “spiritual opium”.

CAC gave tech groups until September 2 to submit feedback on the proposals but did not provide a timeline for when the rules would be implemented.

Hong Kong-traded shares in social media giant Tencent ended the day down 3 per cent. Shares in video service Bilibili fell 7 per cent and short-video maker Kuaishou declined 3.5 per cent.

“Previous measures may not have achieved the expected results, so they made more detailed and thorough regulations,” said Li Chengdong, head of the Haitun think-tank. “But I think it is still hard to execute — kids are too clever now.”

The rules also push online content providers such as ByteDance and Tencent to create a separate and limited pool of videos and games available to anyone under 18 using a device in minor mode.

Content for minors should “promote the core values of socialism” and the “traditional culture of China” in an effort to “cultivate minors’ affection for their country and good moral character”, CAC said.

The rules would also push internet groups to classify content into five different categories based on age, with any child under three only able to consume kids songs and 16 to 18-year-olds provided “healthy content”.

A product manager at a short-video group called CAC’s proposal “overly idealistic and very difficult to implement”, noting that even tagging videos for different age groups would be problematic.

“Ten people from the CAC will have 10 different opinions when it comes to labelling,” the person said. But the product manager warned it could lead to job losses for video bloggers, game explanation bloggers, and those who share cartoon comics, if strictly implemented.

FT : GAM makes last-ditch effort to win support for Liontrust rescue deal

GAM makes last-ditch effort to win support for Liontrust rescue deal
Swiss asset manager urges shareholders to reject advances from activist investors

GAM has made a fresh attempt to assuage shareholder concerns over its takeover offer from UK asset manager Liontrust that it says is essential to its survival.

A day ahead of its results announcement, in which it is expected to confirm a SFr23mn ($26.2mn) loss in the first half, the Swiss investment house laid out its responses to a group of shareholders balking at Liontrust’s offer, reiterating that the deal is essential “to continue as a going concern”.

The move forms the latest in a series of efforts by GAM in recent months to convince any holdouts to accept Liontrust’s offer, which is facing a mounting challenge from an investor group, which includes Newgame and wealth management company Bruellan.

Time is running out before Liontrust’s twice-extended August 4 deadline to seal the deal it outlined in May. Barring a last-minute delay to GAM’s scheduled results, Thursday could provide the 40-year-old investment house — one of the largest in Europe before it stumbled in to scandal in 2018 — with a final opportunity to push the deal over the line.

“Newgame’s proposals ignore business realities and do not provide a credible path forward,” GAM’s board said in a statement last week. “They do not provide the required immediate funding and materially underestimate the scale of funding needed to restructure the business and to support it as a going concern. Liontrust is the only viable option.”

Portfolio managers at GAM have also voiced support for the deal, while Liontrust’s chief executive John Ions has warned the clock is at “one minute to midnight” for GAM’s future.

GAM has struggled to recover from its involvement in the Greensill scandal — an episode that led to the ejection of one of its star managers, a fine of £9.1mn over conflicts of interest, and a 96 per cent collapse in its share price.

London-listed Liontrust, which has snapped up seven smaller asset managers in 11 years, stepped forward with a proposed acquisition in May — a move swiftly recommended by GAM’s board and its fund managers. As part of the offer, Liontrust extended a £17.8mn loan to GAM, half of which has already been paid, in an arrangement that will be terminated at the end of the year if the deal has not been completed.

It is offering 0.06 of its own shares for each share in GAM, which now trades at SFr0.53, and last week it extended the deadline for its tender offer for GAM’s shares to Friday. It also removed a clause that required GAM’s fund management services business to be sold for the deal to go ahead, and issued a second show of support from GAM’s fund managers. “The acquisition is Liontrust’s full and final offer,” the company said in a statement.

But Liontrust and GAM face resistance from activist investors led by French telecoms billionaire Xavier Niel, who say they own 9.6 per cent of GAM’s shares. They have said the proposal significantly undervalues the company and the potential value a turnaround could generate for shareholders, and have launched their own offer for 17.5 per cent of the company at SFr0.55 per share.

Newgame chief Albert Saporta told the Financial Times that he had received calls from GAM shareholders “every day” saying they are not going to accept Liontrust’s offer.

“It is presumptuous and arrogant for Liontrust’s management to think only it can create value for shareholders . . . the deal is obviously not very popular,” he said. Newgame has also said the loan from Liontrust means GAM is recommending an offer made by “the creditor of last resort . . . with a pistol [to] the head”.

It has described the proposed deal as “lopsided”, given GAM shareholders would own 12.6 per cent of the combined entity, despite contributing about 40 per cent of the assets under management.

Newgame’s offer came, GAM said, with “a highly questionable condition that Newgame gets full control of the GAM board. It also requires change of control approvals from various regulators.”

It is unclear how many of GAM’s shareholders plan to commit to Liontrust’s tender offer. One external shareholder — Silchester, which holds 17.3 per cent of GAM’s shares — has publicly voiced its support.

“I acknowledge that this has been a challenging journey for shareholders,” said GAM chair David Jacob in last week’s statement. “However, at this critical point, I urge you to tender your shares into the Liontrust offer.”