>>> What to look at today - 24th of May 2023

Asian stocks retreated for a second day as negotiations over raising the US debt ceiling remained at an impasse, sapping risk sentiment. The New Zealand dollar dropped after the central bank signaled its rate-hike cycle has peaked. The MSCI Asia Pacific Index headed for its lowest close in a week, following losses of more than 1% for both the S&P 500 and Nasdaq 100 on Tuesday. Chinese stocks were close to wiping this year’s gains on persistent concerns over geopolitics and economic growth.  Yields on New Zealand bonds fell and the currency dropped more than 1% after the Reserve Bank of New Zealand hiked interest rates to 5.5%, in line with projections, while suggesting that rate cuts may begin in late 2024.  It was a mixed picture in commodities as gold held Tuesday’s gains amid speculation the debt impasse will boost demand for haven assets. Oil climbed for a third day after the Saudi energy minister warned short-sellers of pain ahead. Copper declined below $8,000 per ton for the first time since November on waning economic recovery in China. Toyota Motor Corp. shares bucked the trend in Tokyo, rising as much as 6.6% after sliding in the final minute of trading Tuesday. Japanese travel-related and retail companies fell, tracking a slump in European luxury stocks that wiped out more than $30 billion from the sector. Other major currencies were little changed and the offshore yuan slipped to the weakest level this year following the currency’s daily fix. The benchmark US 10-year yield was little changed at 3.68%. In economic news, US new-home sales unexpectedly rose to a more than one-year high, and US business activity grew in May by the most in over a year. Minutes due Wednesday from this month’s Federal Open Market Committee meeting will offer traders the latest insights into whether interest rates will be paused at the Fed’s June gathering. US After Hours PTCT -21.4% after drug did not meet primary endpoint; seen as positive for peer RETA +9.8%; URBN +9.3%, PANW +3.8% higher on earnings; NEWR -7.5%, A -6.5%, INTU -5.5% lower on earnings.

Nikkei -1,09% Hang Seng -0,90% CSI -0,52% Shanghai -0,49% Shenzen +0,19%

Eur$ 1,0779 CNH 7,0664 CNY 7,0584 JPY 138,41 GBP 1,2427 CHF 0,9009 RUB 80,1789 TRY 19,8711 WTI$ 73,68 +1% Gold 1,976,6 BTC 26,750 -1,4% ETH 1,818,82 -2%

S&P +0,11% Nasdaq +0,12% EuroStoxx -0,46% FTSE -0,42% Dax -0,45% SMI

Macro :
- Taiwan Won’t Get US F-16s Until 2024 Thanks to More Than Covid
- France Says Future of Rail Freight at Risk in EU State-Aid Talks

Keep an eye on :
- BABA US : Alibaba’s Cloud Arm Is Said to Cut 7% of Staff in Overhaul
- Ansaldo IPO : Ansaldo to Extend Medium-Long Term Loans, Propose Capital Boost
- ANTO LN : Antofagasta Mine Supervisors Vote New Wage Offer in Chile
- BC IM : Cucinelli to Sell 18.5% Stake in Cariaggi Lanificio to Chanel
- CRI FP : Chargeurs 1Q Revenue EU169.7M Vs. EU203.5M Y/y
- DPW GY : DHL Express CEO Says Global Air Cargo Market Has Hit a Bottom
- EMBRACB SS : Embracer Cuts Forecast as Major Strategic Partnership Canceled
- EXN FP : Exclusive Networks Holder Breittmayer Offers About 3m Shares
- EPIA SS : Epiroc to Utilize Mandates to Buyback and Sell Shares
- HAUTO NO : Hoegh Autoliners Offering by Holder Prices at NOK62.50/Share
- HOLN SW : Holcim Buys UK Building Blocks Supplier Besblock; No Terms
- HUSCO DC : Huscompagniet Offers Up to 3.5m Shares
- IMI LN : IMI Indicated to Join FTSE 100 Index, Ocado to Leave
- JUVE IM : Juventus Committed to Winning a Spot in EU Competitions
- MAJ NA : Teleperformance-Majorel Deal Could Be Cleared By 4Q23 (May 23)
- MB IM : Mediobanca Targets Shareholder Remuneration of €3.7b in ‘23-’26
- OCDO LN : Ocado Set to Exit FTSE 100 in Fresh Blow to UK’s Tech Hopes
- RNO FP : Renault, Valeo Partner to Develop Software-Defined Vehicles
- REP SM : EU Refiners Target Hydrogen to Turbocharge Energy Transition
- SIE GY : Siemens chief vows to ‘defend and expand’ market share in China
- GLE FP : SocGen Holders Approve Krupa’s Appointment as Director at AGM
- TEP FP : Teleperformance-Majorel Deal Could Be Cleared By 4Q23 (May 23)
- FR FP : Renault, Valeo Partner to Develop Software-Defined Vehicles
- VGP BB : VGP JV Announces a €253M Logistics Portfolio Purchase
- VONN SW : Vontobel CEO to Step Down to Focus on Swiss Politics
- WH IS : Wyndham Climbs on Report That Choice Hotels May Consider Offer
- YPSN SW : Ypsomed FY Sales Meets Estimates

FT : Why the EU’s plan to protect key industries spooks free traders

Trade off

These are anxious times for the EU’s free traders. With the enthusiastic backing of France and its allies, Brussels is seeking to build up the union’s geopolitical power in the pursuit of “strategic autonomy,” hardening trade defences and intervening ever more deeply in key industrial sectors, writes Sam Fleming. 

Context: Next month the European Commission will propose an economic security strategy aimed at further protecting the EU’s interests, in response to US pressure for a tougher approach to China in particular. 

This sits uncomfortably with EU governments that like to proclaim their enthusiasm for an open, rules-based global trading system. They aren’t alone: In a new policy paper, lobby group BusinessEurope makes the corporate case for the EU to stay in touch with its liberal roots.

There cannot be strategic autonomy without openness, according to the paper. Trade agreements with New Zealand, Chile, Mexico and Mercosur should therefore be brought into force during the lifespan of the current commission, it says, calling for accelerated talks with Australia, India and Indonesia.

It strikes a notably sceptical note when assessing two key policy innovations likely to feature in the commission’s strategy paper: the possible creation of new powers to impose EU-wide export controls on key technologies, coupled with tighter scrutiny of outbound investment flows.

BusinessEurope says that, on principle, it does not support limitations on outbound investments, arguing these should only be used in “exceptional cases” to address serious security concerns.

Export controls, meanwhile, should only be imposed on a case-by-case basis in consultation with the private sector and in co-ordination with key international allies.

Businesses are not the only questioning voices. With EU trade ministers due to meet tomorrow, more “liberal-minded” member states are worried the EU is creating too many trade barriers, said one EU diplomat.

There is, accordingly, little chance of capitals reaching a quick consensus on the contentious topic of investment controls. When it comes to the commission’s wider economic security proposals, “the strongest proponents of a more liberal market economy are a bit concerned about what this will entail in terms of obstacles to trade,” the diplomat added.


The G7 must accept that it cannot run the world, writes Martin Wolf, even if it is still the world’s most powerful and cohesive economic bloc and produces all leading reserve currencies.

WSJ : Hunter Biden Probe Tensions Mounted, IRS Agent Alleges

Hunter Biden Probe Tensions Mounted, IRS Agent Alleges
Unnamed agent’s lawyer details differences between prosecutors and investigators in tax investigation of president’s son

WASHINGTON—In a charged meeting last year, federal prosecutors were informed of investigators’ “longstanding concerns” about what they described as irregularities in the handling of the Justice Department’s criminal investigation into President Biden’s son, Hunter Biden, a lawyer for an IRS supervisory agent said in a letter.

The letter to the Office of Special Counsel, an independent investigative body that handles federal government personnel matters, refers to a meeting in October 2022 and comes days before the supervisory agent is set to give closed-door testimony on Capitol Hill.

The account offers a glimpse into simmering tensions in the yearslong investigation into Hunter Biden, which is focused on his taxes and whether he made a false statement in connection with a 2018 gun purchase. The younger Biden has denied any wrongdoing, saying he has handled his affairs legally and appropriately.

The Internal Revenue Service supervisory agent, who hasn’t been publicly identified, again raised concerns after the October 2022 meeting in a call with federal prosecutors. After that exchange, he and his investigative team were “no longer invited to any further prosecutorial team calls and meetings on the case, effectively excluding them from the case,” wrote the lawyer, Tristan Leavitt, president of Empower Oversight Whistleblowers & Research, a nonprofit focused on oversight of government and corporate wrongdoing.

From then on, the IRS team only received updates on the investigation when a top agent took advantage of other opportunities to ask the U.S. attorney overseeing the probe about its progress, Leavitt wrote in the May 17 letter.

In the copy of the letter obtained by The Wall Street Journal, the U.S. attorney’s name was blacked out. The Journal has previously reported that the office of David Weiss, the U.S. attorney in Delaware who was appointed by President Trump, is handling the Hunter Biden investigation.

A Justice Department spokesman and a spokeswoman for Weiss’s office declined to comment. CNN first reported on the letter.

By the October 2022 meeting, the IRS supervisory agent had already begun making what Leavitt described in the letter as “protected disclosures” alleging that the Justice Department wasn’t following established precedent in the probe. The IRS supervisor began making such disclosures in the summer of 2020, according to the letter, which doesn’t detail the specific complaints the agents had.

The letter followed on the heels of an April missive to lawmakers in which lawyers for the IRS supervisory agent claimed to have evidence of political interference and “preferential treatment” in the investigation. While the letters don’t name Hunter Biden, referring only to an investigation that involves “a high-profile, controversial subject,” the Journal has confirmed that the inquiry at issue involves the president’s son.

In more recent letters, lawyers for the IRS supervisory agent told lawmakers that he had been passed over for a promotion and that he and his “entire investigative team” had been removed from the criminal inquiry. The IRS supervisor was informed that the team’s removal came at the request of the Justice Department, according to a copy of that letter obtained by the Journal.

On Saturday, lawyers for the IRS supervisory agent sent a letter to IRS Commissioner Daniel Werfel alleging retaliation. The letter included a copy of an email a second IRS agent sent to Werfel expressing concerns about his removal from the investigation into Hunter Biden. The IRS agent’s name was redacted in the copy reviewed by the Journal.

The IRS has said it can’t comment on specific taxpayer matters but is “deeply committed to protecting the role of whistleblowers.”

The IRS supervisory agent is set to be interviewed behind closed doors Friday before the Republican-led House Ways and Means Committee, according to a letter to lawmakers. Lawyers for the IRS agent expressed frustration that the House panel and the Democratic-led Senate Finance Committee couldn’t agree to a date for a single, joint interview.

“In addition to the risks he is already taking with his career and livelihood to offer you information, he should not have to take the additional risks associated with being forced to testify twice, in two different settings, with two different transcripts in the control of two different committees, led by two different chairmen with opposing partisan interests,” wrote Leavitt and another lawyer, Mark Lytle.

“In short,” they added, “our client is unwilling to be a political football, and is disappointed that the committees have been unwilling to negotiate one voluntary interview at which all could participate fully.”

Representatives of the two committees didn’t immediately respond to requests for comment.

FT : The ‘Czech sphinx’ prowling France for deals

The ‘Czech sphinx’ prowling France for deals

In the country home to Bernard Arnault and Françoise Bettencourt Meyers — ranked by Forbes as the world’s richest man and woman, respectively — another power player is coming to the fore in corporate France: Daniel Křetínský.

Hailing from the Czech Republic, the 47-year-old Francophile has become a central player in France’s highest-profile active deals, gradually shedding his outsider status to become one of Europe’s most prolific dealmakers.

His current docket includes a €1bn bid to wrest control of French supermarket Casino from its owner, talks to buy publisher Editis from billionaire Vincent Bolloré’s Vivendi, and perhaps even an acquisition of the IT services business Atos in a spin-off deal.

“Every time there is a big bid in France, whether it is Editis or Casino, he’s there,” said one French investor. “He bought his way into the establishment and it’s working.”

Dubbed the “Czech Sphinx” for his affinity for privacy and poker-faced investment strategy, Křetínský’s interest in France has attracted similar curiosity.

The energy tycoon first built his empire by snapping up unloved, often carbon-intensive energy businesses on the cheap, often using external financing. That bet paid off in spades when the energy crisis electrified profits in the sector, doubling his fortune to more than $10bn over the past year.

He now wants to diversify those gains “to create an enterprise equivalent to his energy interests”, according to one of his advisers. 

Křetínský’s portfolio includes stakes in the UK’s Royal Mail, grocer J Sainsbury, and West Ham football club as well as German wholesaler Metro and US sneaker chain Foot Locker.

While the aggressive shift into retail, sport and media establishments across the UK and Europe is a way to hedge against his core energy assets, it’s still in line with his signature move: finding cheap assets in structurally challenged sectors and benefiting from any uptick.

His latest dealmaking endeavours are also powerful indicators of his growing influence in French business, where his advances haven’t always been welcome.

In 2018, Křetínský scooped up a series of titles from French media group Lagardère before unexpectedly buying a stake in the group behind newspaper Le Monde, sparking opposition from journalists and shareholders.

As Casino gears up for a complex and expensive debt restructuring, a potential leading role in restructuring the French supermarket could be one of Křetínský’s biggest power moves yet.

FT : Everyone’s pouring money into private credit

The brewing dealmaking wave in private credit 

Sixteen years ago, Fortress Investment Group was the first large private equity firm in the US to go public, minting a large windfall for co-founders Pete Briger and Wes Edens while setting the stage for rivals Blackstone, Apollo, KKR and Carlyle to also list their shares.

But Fortress is now, in effect, becoming a private partnership again, unwinding the New York investment group’s run in the public spotlight.

On Monday, DD’s Antoine Gara reported that Fortress’s controlling shareholder SoftBank had struck a deal to sell the group to an arm of Abu Dhabi sovereign wealth fund Mubadala and Fortress’s own employees.

Mubadala will own 70 per cent of Fortress, while insiders like founder Briger and top investment staff will own the remaining 30 per cent of the $46bn in assets group. Fortress employees will control its board and be able to gain majority ownership depending on its financial performance in the coming years.

Briger characterised the deal as a “management buyout”. He and Edens will also step down as co-CEOs in a succession plan that hands day-to-day leadership responsibilities to managing partners Drew McKnight and Joshua Pack. 

Days earlier, TPG struck a $2.7bn deal to buy privately held distressed debt giant Angelo Gordon, underscoring a wave of consolidation in private markets. TPG was expected to buy a credit manager after listing its shares last year. It had formerly owned a stake in Sixth Street, one of the industry’s fastest-growing players.

The deals have been focused mostly on credit investment arms that are seeing returns rise due to higher interest rates and are preparing for a wave of distressed opportunities.

Last year, General Atlantic bought Tripp Smith’s credit firm Iron Park as it decided to push into debt-based investments. Carlyle, meanwhile, purchased collateralised loan obligation manager CBAM Partners.

Traditional asset managers have got in on the action too. Nuveen bought European debt manager Arcmont last year, while T Rowe Price purchased Oak Hill for $4.2bn in late 2021.

Mubadala’s acquisition underscores the appetite among Middle Eastern investors to increase their exposure to private credit. Before buying Fortress, it created partnerships with Apollo, KKR and Ares.

Mubadala is not alone. In December, Bahrain-based Investcorp acquired Marble Point for about $200mn.

Though credit opportunities are on the rise, Briger warned that some rivals expanded too quickly in a low-rate environment. 

“[There] have been some firms that have grown incredibly large at the wrong time in the cycle,” he said. “I think we will get bigger in this kind of environment. I think those firms that have gotten a lot bigger in credit and mezzanine credit could live to regret that.”

FT : Big drop in German exports to China raises fears over EU’s economic powerho

Big drop in German exports to China raises fears over EU’s economic powerhouse
Decrease in demand from Asia’s largest economy sparks concern over how Berlin can fix industrial malaise

A double-digit drop in German exports to China has rattled Europe’s biggest economy, triggering debate over why its vast manufacturing sector has fallen behind rivals benefiting from a rebound in Chinese demand.

The 11.3 per cent drop in German exports to China in the first four months of the year, compared with the same period a year ago, highlights a unique set of challenges for Europe’s industrial powerhouse, economists say. Carmakers are losing market share in China, chemical producers and other energy-intensive companies are reeling from high power prices, and the euro’s appreciation against the dollar has made German goods less competitive.

Carsten Brzeski, global head of macro research at Dutch bank ING, said German exporters also felt they were victims of mounting security and trade tensions between Beijing and Washington. 

“Germany is now considered to be allies with the US, which has led to more — explicit or implicit — discouraging of purchases of German products,” he said.

Several big German companies with considerable businesses in China reported significant slumps in first-quarter sales in the country, including chemicals group BASF, the country’s leading carmaker Volkswagen and auto parts producer Bosch.

Falling exports to China are among a number of indicators that Germany’s manufacturing sector is suffering from a sharp decline at the start of this year, including lower factory output, plummeting demand and a shrinking backlog of orders, which could slow growth in the EU’s largest economy. 


Germany seems to be an outlier among European countries, most of which have had higher shipments to China this year, suggesting German exporters are losing market share in their second-biggest market outside Europe. Exports from the 27 members of the EU to China rose 2.9 per cent year on year in the first quarter, according to Eurostat. 

The decline means China accounted for only 6 per cent of Germany’s total exports in the first three months of this year — the lowest share since 2016, and down from more than 7 per cent in the same period of each of the past four years, according to data from the federal statistical agency.

This runs counter to earlier expectations that Germany’s vast manufacturing sector would benefit from a boost in Chinese demand after the lifting of Beijing’s zero-Covid policy late last year and the easing of supply chain bottlenecks.

“It is mainly services that rebounded but not yet manufacturing,” said Brzeski, adding that carmakers have been hit by a lack of smaller electric vehicles and the Chinese trend of buying models from domestic carmakers. Motor vehicles and parts made up more 15 per cent of total German exports last year, he said.

Although European gas prices have fallen sharply from last year’s peak, they remain higher than in earlier years, putting energy-intensive companies at a sustained disadvantage.

“Chemicals output is down sharply due to the energy crisis,” said Oliver Rakau, chief German economist at research group Oxford Economics. “There has been a permanent hit to competitiveness.”

The German government has drawn up plans to subsidise 80 per cent of electricity costs for energy-intensive companies.

German exporters, which account for more than a quarter of all EU exports outside the bloc, have also been hampered by the recent appreciation of the euro from below parity with the dollar late last year to trade between $1.07 and $1.10 in recent weeks.

Manufacturing activity fell to a six-month low in Germany this month, according to S&P Global’s latest survey of purchasing managers released on Tuesday. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said the survey found foreign demand for German manufactured goods had “virtually collapsed”.

The BDI, Germany’s main business confederation, declined to comment. It is watching the decline in exports to China closely and is hoping it is a blip that will ease once Chinese construction activity rebounds rather than a long-term trend. 

BASF, which has been downsizing in Germany while building a €10bn plant in China, reported sales of €2.3bn in China in the first quarter of this year — a 29 per cent drop on the same quarter the previous year. The Ludwigshafen-based group blamed decreased demand, which had also contributed to lower prices for its chemicals.

Volkswagen, which sells more cars in China than any other carmaker, said deliveries in the country dropped 15 per cent in the first quarter. The company said the figure reflected a surge of sales at the end of 2022, when Chinese consumers took advantage of EV subsidies as well as a combustion vehicle tax exemption that both ended in December.

Bosch also reported a decrease in Chinese demand, pushing first-quarter Asia Pacific sales down by 9.3 per cent.

“Particularly during the first two months of 2023, we have continued to feel the economic effects of the restrictions imposed in response to the coronavirus pandemic,” Bosch said.

After German industrial production suffered its biggest drop for 12 months in March, falling 3.4 per cent from February, some economists expect the federal statistical agency on Thursday to revise down its initial estimate of first-quarter gross domestic product from zero growth to a contraction.

A second consecutive quarterly decline in GDP — after a 0.4 per cent contraction in the final quarter of last year — would meet the definition of a technical recession. Germany is expected to be the weakest performer among the world’s big economies this year, according to the IMF, which predicted the country’s output would shrink 0.1 per cent.

FT : Chip wars with China risk ‘enormous damage’ to US tech, says Nvidia chief

Chip wars with China risk ‘enormous damage’ to US tech, says Nvidia chief
Jensen Huang tells lawmakers to be ‘thoughtful’ about imposing more export controls on Beijing

The chief executive of Nvidia, the world’s most valuable semiconductor company, has warned that the US tech industry is at risk of “enormous damage” from the escalating battle over chips between Washington and Beijing.

Speaking to the Financial Times, Jensen Huang said US export controls introduced by the Biden administration to slow Chinese semiconductor manufacturing had left the Silicon Valley group with “our hands tied behind our back” and unable to sell advanced chips in one of the company’s biggest markets.

At the same time, he added, Chinese companies were starting to build their own chips to rival Nvidia’s market-leading processors for gaming, graphics and artificial intelligence.

“If [China] can’t buy from . . . the United States, they’ll just build it themselves,” he said. “So the US has to be careful. China is a very important market for the technology industry.”

The US’s efforts to prevent China buying or developing advanced chips has become the most aggressive front in a new cold war between the two powers.

Huang’s comments came just days before Chinese authorities announced a ban on US memory chipmaker Micron’s products from critical infrastructure, a move seen as the first significant retaliation against Washington’s export controls.

The Taiwanese-American executive warned US lawmakers to be “thoughtful” about imposing further rules restricting trade with China.

“If we are deprived of the Chinese market, we don’t have a contingency for that. There is no other China, there is only one China,” Huang said, adding that there would be “​​enormous damage to American companies” if they were unable to trade with Beijing.

Huang added that blocking the US tech industry’s access to China would “cut the Chips Act off at the knee”, referring to the Biden administration’s $52bn funding package to encourage construction of more semiconductor manufacturing facilities — known as “fabs” — in the US.

“If the American tech industry requires one-third less capacity [due to the loss of the Chinese market], no one is going to need American fabs, we will be swimming in fabs,” he said. “If they’re not thoughtful on regulations, they will hurt the tech industry.”

Nvidia has embedded itself at the centre of a global race to develop a new generation of AI tools, becoming the primary source of chips that are used to train the “large language models” that power chatbots such as OpenAI’s ChatGPT.

As excitement has grown around AI, Nvidia’s market capitalisation has more than doubled so far this year to about $770bn, ahead of its latest earnings report on Wednesday. Its valuation now dwarfs US rivals such as Intel and Qualcomm, each worth close to $120bn. Despite a rally among some chip stocks, Nvidia is still far larger than its next nearest rival, Taiwanese chipmaker TSMC, which is worth about $450bn.

However, the California-based company has been blocked from selling its most advanced chips — the H100 and A100 series — to Chinese customers since August when the US imposed export controls on technology used for AI. Nvidia has been forced to reconfigure some of its chips to comply with US rules limiting the performance of products sold in China.

Huang said China made up roughly one-third of the US tech industry’s market, and would be impossible to replace as both a source of components and an end market for its products.

Most of the world’s advanced chips — including Nvidia’s — are made in Taiwan, which Beijing claims as part of its territory. President Joe Biden has said the US would intervene if China took unprovoked military action against Taiwan. Analysts fear such a conflict would lead to severe global disruption in production of everything from cars to computers.

“We can theoretically build chips outside of Taiwan, it’s possible [but] the China market cannot be replaced. That’s impossible,” Huang said. “So you’ve got to ask yourself which way do you want to push it.”

China, including Hong Kong, accounted for more than a fifth of Nvidia’s sales in its latest financial year ending January 2023, according to its annual report, while Taiwan represented more than a quarter.

The figures reflect the “billing location” of its customers, which could include contract manufacturers who then sell on to “end customers” in other markets. Based on last year’s figures, more than $12bn in Nvidia’s annual revenues — almost half its total — might be exposed to any potential conflict in the region.

Huang also reflected on his failed takeover of UK-based chip business Arm due to regulatory hurdles, saying he’d been “deeply hurt” and it was no longer “easy for us to invest” in the UK. “I built the first implementation of the AI supercomputer in England, the Cambridge-1. I’m not going to build another,” he said. “I’m done.”

FT : Siemens chief vows to ‘defend and expand’ market share in China

Siemens chief vows to ‘defend and expand’ market share in China
Roland Busch stresses its importance for innovation despite pressure from Berlin to diversify

The chief executive of Siemens has vowed to expand its market share in China, arguing the market is crucial for innovation and growth at the industrial conglomerate.

The comments by Roland Busch come as German companies are under increasing pressure to diversify away from China, as Berlin seeks to reduce its dependence on what it perceives as a geopolitically risky market after being stung by its reliance on Russian gas.

Busch, however, told the Financial Times that it was “not an option” to pull out of the market, which accounts for 13 per cent of company revenues.

“I will defend my market share, and if I can, I will expand it,” said Busch, who took over at the helm of Siemens, one of Germany’s largest companies, in late 2021.

“Where can I find the customers which pull me into the next level of innovation, which are demanding, and which are looking for the next technology?” he asked. “It’s China in very many cases.”

Siemens has in the past few years transformed from a sprawling engineering group that made products such as washing machines to a tech company focused on developing digital tools for industrial use.

It sold its 50 per cent stake in its home appliances joint venture to Bosch in 2015 and the group still holds stakes in several of its former companies that were spun out to form standalone entities. Those include medical technology unit Siemens Healthineers and Siemens Energy, which in turn owns renewable energy business Gamesa.

The German group, which employs more than 311,000 people, last week raised its guidance for a second time this year thanks to margin increases in its smart infrastructure and digital industries units. The results were helped by the easing of global supply chains, which allowed the company to chip into bloated order books.

Siemens’ share price has jumped by a third in the past year to about €150.

China, where wages and labour costs have been gradually rising in recent years, has become particularly important to Siemens’ digital industries arm, which focuses on automation and makes roughly a fifth of revenues in the country.

Many companies, including Siemens, have been looking to move manufacturing away from China to other countries in south-east Asia where wages are lower. Others are worried that rising geopolitical tensions with the west over Taiwan, and US curbs on China’s access to advanced technology, are hitting the country’s viability as a manufacturing base for exports.

Busch noted that the decline in China’s attractiveness as an investment destination for overseas manufacturers was one reason why “high-tech manufacturing” has been high on Beijing’s agenda.

“I’m not saying that China is deindustrialising,” Busch said. With increasingly technologically advanced factories, the country’s industry would be able to “defend their value but in a different way”.

“China will do their own work in terms of high tech manufacturing — this is clearly on the agenda”.

>>> US After Hours Summary: PTCT -21.4% after drug did not meet primary endpoint

After Hours Summary: PTCT -21.4% after drug did not meet primary endpoint; seen as positive for peer RETA +9.8%; URBN +9.3%, PANW +3.8% higher on earnings; NEWR -7.5%, A -6.5%, INTU -5.5% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: URBN +9.3%, PANW +3.8%, CAAP +3.5%, TOL +3.4%, VFC +2.8%

Companies trading higher in after hours in reaction to news: RETA +9.8% (PTCT FA drug not meeting primary endpoint seen as positive for RETA), LRMR +3% (PTCT FA drug not meeting primary endpoint seen as positive for LRMR), ORLY +1.8% (increases share repurchase auth by $2 bln), AMC +1% (Antara Capital Master Fund LP disclose 15.4% stake), ODFL +0.3% (in sympathy with LSTR guidance), RKLB +0.2% (purchases bankrupt rocket firm Virgin Orbit's assets and equipment for $36 mln, according to CNBC), LMT +0.2% (awarded $195 mln US Navy contract), USPH +0.1% (files mixed shelf securities offering; also files $150 mln stock offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: NEWR -7.5%, A -6.5%, INTU -5.5%, LSTR -3% (lowers guidance)

Companies trading lower in after hours in reaction to news: PTCT -21.4% (FA drug did not meet primary endpoint; also announces strategic pipeline prioritization; to reduce workforce by about 8%, CFO to step down), NVTS -10.1% (commences $80 mln stock offering), PHAT -9.3% (resubmits Erosive GERD NDA to FDA; also stock offering), HASI -4.4% ($300 mln stock offering), WERN -3.4% (in sympathy with LSTR guidance), ECVT -1.7% (announces offering by selling stockholder; also announces intention to repurchase 4 mln shares in the offering), ETNB -1.4% (files mixed shelf securities offering), CHRW -0.4% (in sympathy with LSTR guidance), GOCO -0.1% (board establishes special committee to consider acquisition proposal)