>>> Europe : Brokers Upgrades & Downgrades - 1st of August 2023 V2(+)

>>> Up
* BASF Raised to Add at Baader Helvea; PT 53 euros
* Gap Raised to Overweight at Barclays; PT $13
* Marks & Spencer PT Raised to 260 pence at Barclays (+)
* Meta Platforms Raised to Accumulate at Phillip Secs; PT $360
* ON Semi PT Raised to $135 from $100 at Piper Sandler
* ON Semi PT Raised to $122 from $93 at Truist Secs
* Royal Caribbean PT Raised to $125 from $92 at Argus

>>> Down
* Estee Lauder Cut to Neutral at Citi; PT $195
* Inficon Cut to Hold at Berenberg
* Telia Cut to Hold at Berenberg; PT 29 kronor
* Thermo Fisher Cut to Hold at Accountability Research; PT $605
* U.S. Steel PT Cut to $30 from $35 at Argus

>>> Initiation
* Generali Resumed Neutral at Citi; PT 20.20 euros
* Meta Platforms Rated New Buy at President Capital Management
* Nykode Therapeutics Rated New Buy at Kempen & Co; PT 36 kroner (+)

>>> Call
* BASF Upgraded to Add at Baader Helvea on Improving Momentum
* Basic-Fit a Market Leader Set For Expansion, Berenberg Upgrades
* Citi’s Montagu Says FTSE 100 Futures Positioning Turns Bullish
* Inficon Cut to Hold at Berenberg Due to Lack of Valuation Upside
* JPMorgan’s Kolanovic Warns Stocks So Lofty They Price No Landing
* Melia Results a Small Beat, Demand Still Strong, Jefferies Says
* *OPPENHEIMER RAISES S&P 500 YEAR-END TARGET TO 4,900 FROM 4,400
* Telia Downgraded as Berenberg Sees Dividend Risk After CEO Exit

>>> Stoxx 600 Pre-Market Indications

  • HSBC (HBC1 TH) +3.4%
    • HSBC CEO Says Lender Has Moved On From Ping An Breakup Campaign
  • Vodafone (VODI TH) +1.4%
  • Imperial Brands (ITB TH) +1.3%
  • Anglo American (NGLB TH) +1.2%
  • BAT (BMT TH) +0.8%
    • New British American Tobacco chief executive calls for ‘better’ vaping rules
    • BAT Raises $5 Billion in Bonds to Buy Back $2.9 Billion of Debt
  • Bawag (0B2 TH) +0.8%
  • ASML (ASME TH) +0.7%
  • Stellantis (8TI TH) -0.7%
  • Bechtle (BC8 TH) -0.7%
  • Thyssenkrupp (TKA TH) -0.7%
  • Nel (D7G TH) -0.8%
  • Infineon (IFX TH) -0.8%
  • Evotec SE (EVT TH) -0.9%
  • BP (BPE5 TH) -0.9%
    • *BP PLANS $1.5B BUYBACK BEFORE REPORTING THIRD-QUARTER RESULTS
  • Scout24 SE (G24 TH) -1.2%
  • Bank of Ireland (BIRG TH) -2%
  • DHL Group (DPW TH) -2.5%
    • DHL Group 2Q Ebit Beats Estimates; FY Ebit View Range Narrowed

>>> TradeGate Pre-Market Indications

DAX:
  • No major mover
MDAX:
  • TeamViewer SE (TMV TH) +3.5%
    • TeamViewer 2Q Revenue Beats Estimates, FY Outlook Confirmed
  • Scout24 SE (G24 TH) -1.1%
SDAX:
  • Hypoport (HYQ TH) -14%
    • Hypoport Prelim 2Q Ebit Loss Due to Real Estate Segment Weakness

FT : ‘Open science’ advocates warn of widespread academic fraud

‘Open science’ advocates warn of widespread academic fraud
Scandals at Stanford and Harvard show manipulation of research remains an issue despite growth of ‘data detectives’

A decade since Brian Nosek launched an initiative to tackle academic fraud, efforts to impose greater accountability in research have in the past few weeks claimed two of their most high-profile scalps.

Marc Tessier-Lavigne, a distinguished neuroscientist and president of Stanford, resigned and pledged to retract a series of papers in prestigious journals after an independent inquiry concluded they used manipulated data. Harvard has similarly demanded retractions of papers co-written by professor Francesca Gino, a leading dishonesty expert in its business school who is currently on administrative leave.

“There is a culture of greater transparency,” said Nosek, a professor at the University of Virginia and co-founder of the Center for Open Science. “The observation of fraud is certainly increasing, but we don’t know the denominator.”

Nosek cautions that manipulation of research remains widespread. He said there were still many incentives for authors, their institutions and journals to fabricate and misinterpret data.

He has pushed for wider sharing of methods and underlying data on academic findings. This has fuelled a mini-industry of “data detectives” who scrutinise and seek to replicate findings.

“Even if all [Tessier-Lavigne’s papers] were retracted, it would be a spit in the ocean of the amount of actual misconduct taking place,” said Ivan Oransky, co-founder of Retraction Watch, which flags research papers withdrawn from academic publications.

“This literally happens every day. We track 5,000 retractions a year,” he added. This is up from less than 120 in 2002, according to Retraction Watch data.

In theory, academic journals demand rigorous peer review by other experts ahead of publication. In practice that scrutiny is often limited, many findings are still taken largely on trust and editors are often reluctant to retract work if concerns later emerge.

Improvement has come with rising requirements for studies to be “preregistered” publicly before they are conducted. That helps prevent “p-hacking” — efforts to find patterns once data has been generated, rather than respecting the scientific method of first developing and then testing hypotheses.

Academic journals also often now request disclosure of underlying data sets. This enabled Elisabeth Bik, an “image integrity” specialist whose scrutiny has led to nearly 1,000 retractions, to download and spot Photoshopped, rotated and duplicated cell and DNA images in papers co-written by Tessier-Lavigne.

Data disclosure has fuelled the blog PubPeer, where researchers can anonymously raise concerns. DataColada, another blog which has exposed numerous frauds, scrutinised the spreadsheets on which papers by Gino and her colleagues were based and identified a series of anomalies.

But Leif Nelson at Berkeley’s Haas School of Business, who is one of DataColada’s contributors, said still more sharing of the raw underlying data of published research was needed, as well as greater co-operation from faculties and universities.

DataColada’s work led Harvard nearly two years later to request retractions to Gino’s journal articles. But Leif said the university refused to confirm an investigation was under way, let alone share its scope or findings. “We do not know exactly what happened,” he said. 

Both Gino and Harvard declined to comment.

By contrast, Stanford used independent experts from outside the university and made its report on Tessier-Lavigne public, but limited its scrutiny to 12 academic papers. It only started an investigation in late 2022, years after red flags were first raised by Bik and others, when one of its own undergraduates reported concerns in the student newspaper.

Ellen Evers, an associate professor at Haas, said more institutions should learn from the approach Dutch universities, such as Tilburg, Groningen and Amsterdam, which in 2012 jointly conducted and published a detailed report into the entire research career of Diederik Stapel. That led to at least 58 of his papers being retracted — to the benefit of many others working in his field of social psychology.

“They looked at every single paper which had his name on it,” said Evers, who helped blow the whistle. “It was good for science and really reduced the cost for some of his co-authors. Now we know which papers we can and can’t cite.”

While many universities’ responses remain ambivalent, other incentives to manipulate research remain in place. For Oransky, “this stuff will keep happening as long as there is a publish or perish culture”, driven by university rankings based on academics’ publications in prestigious journals.

Nosek stressed that adherence to open science principles still remained patchy. For example, data sharing is more widespread in science and medicine than disciplines such as business, where there is less pressure from funders or external regulatory scrutiny.

He has been pushing for a new model in academic publishing, which changes the incentives by getting journals to reward important research questions with publication, regardless of whether the findings are positive. Academics would register proposed experiments and editors would commit to publishing the interesting ones regardless of the outcomes.

“In science, any outcome is informative. It’s the questions that matter,” he said, pointing to a number of leading journals which have signed up, including Nature.

However, he remains cautious about progress in tackling academic fraud over the past half century. “There is still a lot of work to do.”

>>> What to look at today - 1st of August 2023

Shares in Asia edged higher Tuesday, bolstered by bullish sentiment on Wall Street as investors parsed further signs of stability in the global economy. Equities in Japan, Australia, South Korea climbed, placing a gauge of Asian stocks on track for its seventh consecutive advance — a run not seen since January, when investors initially warmed to China’s reopening.  Mainland China and Hong Kong shares erased earlier gains after data showed a slowdown in home sales and manufacturing in the world’s second-largest economy. The Caixin PMI figures showed factory activity contracted in July, missing economists’ estimates for a small expansion. Meanwhile, home sales plunged by the most in a year last month, underscoring why policymakers need to address faltering demand and a liquidity crunch in the sector. Major developer Country Garden Holdings Co. slid in equity and credit market after it canceled a share sale, raising concerns over its ability to meet $2.9 billion in bond payments for the rest of the year. Futures contracts for US stocks were mildly positive after the S&P 500 and Nasdaq 100 drifted higher on Monday to extend a run of monthly gains for the two benchmarks. The S&P 500 edged higher to around 4,590, closing at a 16-month high. The Nasdaq 100 notched its longest streak of monthly gains since August 2020. Citigroup Inc.’s Scott Chronert has joined the list of strategists who have revisited their gloomy outlooks in recent weeks, raising his forecast for the S&P 500. Morgan Stanley’s Michael Wilson, who has been among the market’s leading pessimists throughout 2023, changed his tone and now sees the rally running further. The yen traded weaker against the dollar, adding to Monday’s decline, amid weak demand at a 10-year bond auction. While investors had earlier anticipated that the Bank of Japan is moving toward letting yields rise after a tweak to its yield-curve control policy, it bought bonds on Monday to anchor rates.  The euro-area economy returned to growth, data showed Monday, while underlying inflation pressures persisted — supporting early arguments for the European Central Bank to raise interest rates again. In the US, data pointing to inflation becoming tamed boosted optimism the world’s biggest economy will have a soft landing as the Federal Reserve nears the end of its monetary-tightening cycle. oil edged down after surging 16% in July, its biggest monthly advance since early 2022.  US After Hours ANET +12%, WWD +9.7%, AESI +6.2%, TREX +5.6% trending higher on earnings; ZI -17.1%, HLIT -14.1%, AAN -9.6%, RMBS -7.9%, DV -7.4% (also acquiring Scibids), MPWR -7.1% tracking lower following earnings.

Nikkei +0.84% Hang Seng -0.48% CSI -0.55% Shanghai -0.16% Shenzen -0.47%

Eur$ 1.0992 CNH 7.1734 CNY 7.1669 JPY 142.74 GBP 1.2825 CHF 0.8721 RUB 91.6120 TRY 26.9628 WTI$ 81.53 -0.33% Gold 1,959 -0.30% BTC 28,900 -1.05% ETH 1,828 -1.35%

S&P +0.02% Nasdaq +0.01% EuroStoxx -0.07% FTSE -0.02% Dax -0.10% SMI

Macro :
- JPMorgan’s Kolanovic Warns Stocks So Lofty They Price No Landing
- Citi’s Montagu Says FTSE 100 Futures Positioning Turns Bullish
- *OPPENHEIMER RAISES S&P 500 YEAR-END TARGET TO 4,900 FROM 4,400

Keep an eye on :
- ADS GY : Adidas Signs £900 Million Shirt Deal With Manchester United
- ADS GY : Messi Miami Mania Seen Pushing Adidas 2024 Growth Rate Past Nike
- AML LN : Aston Martin to Raise £210 Million From Its Backers to Cut Debt
- APPS SM : Apax Releases Banks Contracted for Applus Bid: Expansion
- ATO FP : Atos in Talks to Sell Tech Foundations at €2B Ent. Value
- BATS LN : New British American Tobacco chief executive calls for ‘better’ vaping rules
- BT/ LN : BT Group ‘Is Like a Telia on Steroids,’ Allison Kirkby Tells DI
- CO FP : CDS Panel Asked to Rule on Casino Failure-to-Pay Credit Event
- 1COV GY : Covestro 2Q Sales Misses Estimates
- DHL GY : DHL Group 2Q Ebit Beats Estimates; FY Ebit View Range Narrowed
- RF FP : Blackstone to Provide €400M in Equity to Groupe Premium
- EAPI FP : EuroAPI 1H Ebitda EU62.5M Vs. EU70.3M Y/y
- XOM US : Exxon in Talks With Tesla, Ford, Volkswagen on Supplying Lithium
- XOM US : Albemarle Rises, Leading Peers Higher on Exxon Supplier Talks
- GBLB BB : GBL 1H Cash Profit EU388M Vs. EU384M Y/y
- HSBA LN : HSBC to Buy Back up to $2b of Shares
- HYQ GY : Hypoport Prelim 2Q Ebit Loss Due to Real Estate Segment Weakness
- IPCO SS : Intl Petroleum 2Q Revenue Misses Estimates
- KRN GY : Krones 2Q Ebitda Meets Estimates
- MC FP : Birkenstock Owner Said to Plan September IP0 at $8 Billion Value
- MEL SM : Melia Hotels 2Q Ebitda EU140.6M
- NEXI IM : Nexi 2Q Ebitda Meets Estimates
- 7974 JP : Next-Gen Nintendo Console Could Come in 2024: Verge
- PFG GY : Pfeiffer Vacuum 2Q Ebit EU24.1M Vs. EU28.7M Y/y
- RBI AV : Raiffeisen Cuts FY Cost of Risk Forecast
- RIO LN : Rio Tinto Deal Shows Big Mining Ready to Invest in Chile Again
- RIO LN : Rio Tinto Looking at Possible Lithium Deals, Stausholm Says
- SRS IM : Italy Saras Sees Heat Curbs Refining Output in Med, Middle East
- SHEL LN : Shell Said to Resume Nigeria Oil Fields Sale Talks to Local Firm
- TLGO SM : Talgo Gets EUR181m High-Speed Trains Maintenance Contract
- TMV GY : TeamViewer 2Q Revenue Beats Estimates, FY Outlook Confirmed
- TIT IM : Italy May Take 35% of Telecom Italia Grid in KKR Bid: Repubblica
- ZI US : ZoomInfo Reduces FY Revenue Forecast, Misses Estimates

>>> Europe : Brokers Upgrades & Downgrades - 1st of August 2023

>>> Up
* BASF Raised to Add at Baader Helvea; PT 53 euros
* Gap Raised to Overweight at Barclays; PT $13
* Meta Platforms Raised to Accumulate at Phillip Secs; PT $360
* ON Semi PT Raised to $135 from $100 at Piper Sandler
* ON Semi PT Raised to $122 from $93 at Truist Secs
* Royal Caribbean PT Raised to $125 from $92 at Argus

>>> Down
* Estee Lauder Cut to Neutral at Citi; PT $195
* Inficon Cut to Hold at Berenberg
* Telia Cut to Hold at Berenberg; PT 29 kronor
* Thermo Fisher Cut to Hold at Accountability Research; PT $605
* U.S. Steel PT Cut to $30 from $35 at Argus

>>> Initiation
* Generali Resumed Neutral at Citi; PT 20.20 euros
* Meta Platforms Rated New Buy at President Capital Management

>>> Call
* BASF Upgraded to Add at Baader Helvea on Improving Momentum
* Basic-Fit a Market Leader Set For Expansion, Berenberg Upgrades
* Citi’s Montagu Says FTSE 100 Futures Positioning Turns Bullish
* Inficon Cut to Hold at Berenberg Due to Lack of Valuation Upside
* JPMorgan’s Kolanovic Warns Stocks So Lofty They Price No Landing
* Melia Results a Small Beat, Demand Still Strong, Jefferies Says
* *OPPENHEIMER RAISES S&P 500 YEAR-END TARGET TO 4,900 FROM 4,400
* Telia Downgraded as Berenberg Sees Dividend Risk After CEO Exit

FT : Spanish EV company to list in Amsterdam with Spac deal

Spanish EV company to list in Amsterdam with Spac deal
QEV’s €200mn value will test investor appetite in market littered with failures and frauds

A Spanish electric vehicle maker specialising in racing cars is to list in Amsterdam through a merger with a special purpose acquisition company, testing investor appetite into a market that has all but collapsed.

The decade-old QEV Technologies, which is set to be valued at more than €200mn, comes to a once red-hot EV Spac market which has been hit by a series of high profile failures and frauds.

Lordstown Motors filed for bankruptcy protection in June, while Arrival and Canoo have issued “going concern” warnings that they expect to run out of funds within a year. 

Trevor Milton, the founder of electric truckmaker Nikola, was convicted of defrauding investors last year and Faraday Future has faced challenges including string of financial problems under a former chief executive.

QEV, which has been building vehicles for other companies, will merge with a blank-cheque company backed by a pair of boutique financial advisories.

The business is expecting to break even within a year, said Joan Orús, QEV’s chief executive, and is forecast to make more than €60mn in revenues during 2023.

The company has acquired Nissan’s former van facility in Barcelona, where it intends to begin production of a new bespoke electric van from next year. It has access to a factory in China, where it has already begun making some vans. The business has already delivered around 100 electric vans to a Mexican business.

Orús added that a broader push in Europe to expand local manufacturing and rising sales for EVs would bolster the business as it aims to have about three-quarters of its supply chain in the region by 2025.

“We are in a completely different position, we believe, to many or most of the other EV start-ups and early stage businesses,” said John St John, chief executive of STJ Advisors, one of the advisories behind the Spac Spear Investments.

The company is also in talks to contract-manufacture vehicles for two Chinese and American car brands in the Spanish facility, in order to help maximise usage of the factory. 

It already has €40mn in local and national government grants and said it will net €23mn as part of the merger. It plans to raise between €10mn and €30mn through a so-called “pipe” transaction for additional financing. Even without fresh pipe investment, QEV claims it has enough funding with the deal to last for another two years.

The financial advisory firm AZ Capital is also behind the blank-cheque vehicle, which will hold a shareholder vote on the deal in September.

FT : Industry warns of ‘unintended consequences’ in German boiler ban

Industry warns of ‘unintended consequences’ in German boiler ban
US and European companies say clause to end use of refrigerant gas violates EU single market

US and European engineering companies have warned that a German bill to replace gas boilers with heat pumps contains provisions that violate the principles of the EU single market.

Manufacturers are concerned about a clause in the draft law allowing the government to prohibit the use of a refrigerating gas — hydrofluoroolefins — in heat pump systems.

This provision in what is being billed as one of Germany’s most ambitious pieces of climate legislation was “counterproductive”, said Julien Soulet, a senior executive at Honeywell Advanced Materials, and it “violates the principles of the EU internal market”.

“The unintended consequences of removing HFOs from the market in Germany would be far-reaching in terms of adverse impacts on energy efficiency, energy security and financial cost to citizens.”

A spokesperson for Germany’s economy ministry, which is responsible for the unpopular boiler ban, said it was “important” to switch from HFOs to “natural refrigerants” such as propane or carbon dioxide in heat pumps that have a “lower greenhouse gas potential”.

But she added that “what matters much more in climate policy terms is to stop using fossil fuels in heating”. 

The boiler ban has become one of the most hotly contested German laws of recent years, badly denting the popularity of Olaf Scholz’s coalition government.
The planned Buildings Energy Act, which is expected to be passed by the Bundestag in the autumn, stipulates that from next year all heating systems installed in new buildings in Germany must be at least 65 per cent powered by renewables.

But the bill contains a provision granting the government the authority to stipulate that only natural refrigerants can be used in heat pumps. That would exclude HFOs, which are compounds of hydrogen, fluorine and carbon developed to enable heat transfer in appliances.

The government said heat pumps currently use fluorinated gases, so-called f-gases, which do not occur naturally and contribute to climate change. It said they have a “strong greenhouse gas effect that can be significantly greater than CO₂“. It added that it was “envisaging” a requirement that only less-polluting natural refrigerants such as propane or CO₂ should be allowed in heat pumps.

The government said a new EU directive, which is being negotiated in Brussels, will probably ban newly installed heat pumps that use f-gases such as HFOs.

Yet industry groups say the provision could have a chilling effect on the sector, since many of the pumps sold in Germany use HFOs. According to the VDKF, a German refrigeration and air conditioning trade group, propane-based heat pumps make up less than 5 per cent of the market.

The German Heat Pump Association (BWP) said it supported moves to update the European f-gas directive, which would establish uniform rules for the whole of the EU single market.

But the provision in Berlin’s heating bill had stoked fears that Germany was pursuing a “national solution”, with deadlines and restrictions on which gases can be used that might diverge from EU rules.

“Uncertainty about what refrigerants are allowed could lead to a situation where the owners of buildings decide to install a gas or biomass heating system — which would lead to much greater emissions,” it said.

Kai Schiefelbein, chief executive of Stiebel Eltron, one of Germany’s leading heat pump manufacturers, said a more liberal approach was needed to address the issue of which refrigerants can be used.

“Politicians, companies and tradesmen all agree that we have to really ramp up the installation of heat pumps,” he said. “But to do that we need to take all heat pump segments into consideration.” 

He said up to 40 per cent of heat pump products in the European market still had “no safe and scalable solutions based on natural refrigerants”.

FT : Top stock pickers hit by ‘tremendous’ amount of uninvested cash

Top active fund managers say they are struggling to attract money from large investors who are holding back in the face of volatile markets and cash accounts offering the best yields in years.

Institutional investors such as pension funds, endowments, and foundations control billions in capital and are responsible for the majority of allocations to the biggest asset managers. Cash sitting in US institutional money market accounts now totals almost $3.5tn, according to the Investment Company Institute, a sum that has climbed steadily this year even as stock markets gather strength.

“There’s a tremendous amount of money on the sidelines,” Rob Sharps, chief executive of the $1.4tn manager T Rowe Price, said in an interview. The US-based asset manager was battered over the last quarter by $20bn in net outflows and said it does not expect flows to turn positive again until 2025.

His comments come after the Federal Reserve has aggressively raised US interest rates to tame inflation, in turn boosting the appeal of cash accounts. Yields at the largest money market funds now average more than 5 per cent and are rising fast, according to Crane Data.

“You’re getting yields on money market funds that you haven’t had in 15 years,” Sharps said. “There are a lot of people who are calling for a meaningful slowdown or a recession in the economy, which creates bumpier conditions for credit and equities.”

“We’re probably experiencing the worst of it right now,” he added. “Investors are waiting for the Fed to get out of the way.”

Institutional investors pulled more than $3bn in the latest quarter from active funds at AllianceBernstein, the $646bn manager. Seth Bernstein, chief executive, said “people are sitting out” after the Fed propped up short-term interest rates and may raise them further. “You’re being paid to wait,” he said.

Analysts said there are some signs investors are starting to return. “Fixed income is the next stop as investors decide to take a little more duration risk. And we are already seeing that,” said Alex Blostein, an analyst at Goldman Sachs.

However, much of these flows into fixed-income assets is likely to go to passive managers and ETFs, he said.

Jenny Johnson, chief executive of $1.4tn fund manager Franklin Templeton, is also reckoning with institutional investors’ hesitation. “Look, you can get paid really well and sit in short-duration money market funds,” she said.

Franklin, a manager specialising in fixed income, has started to see a rise in interest from clients moving from cash into higher yielding products, but the progress is likely to be tempered by additional rate rises.

The manager received a modest $200mn in net inflows in the three months to June, mostly into alternatives strategies such as real estate or secondary markets and so-called “multi-asset’‘ combinations of fixed income, equities and alternatives.

The inflows were offset by $7.3bn in net “cash management” outflows.

“We had seen our institutional clients just starting to move out of just core fixed income,” Johnson said.

But last week Fed chair Jay Powell insisted rates could rise again. Johnson said. “Everybody sort of waits until you hit the top, because otherwise it’s a risk.”

Last year’s volatile market was supposed to provide a competitive edge to active asset managers, who had haemorrhaged market share to low-cost passive index managers such as Vanguard and BlackRock for the past decade.

The long hoped-for return to inflows into active managers has not arrived, in part because a rally in a highly concentrated number of stocks has made it difficult for diversified funds to outperform benchmarks. T Rowe Price suffered a “deeply disappointing” performance last year in its large cap growth fund, which contributed to the outflows from the active manager, Sharps said.

The investment landscape has changed as rising rates erased the idea that there is no alternative to equity markets and made money market funds not only viable, but attractive, to investors.

“It’s a moment in time,” Sharps said. “It may last for a while. But it isn’t going to last for ever. Ultimately, people will need to seek higher returns than what they’re likely to get in money market funds over time.”