TheChek News Flow

>>> Up
* Air France-KLM Raised to Neutral at Davy

* Rational Raised to Neutral at Exane

* Wizz Air Raised to Outperform at Davy

>>> Down

* Arjo Cut to Hold at SEB Equities; PT 45 kronor

* Atlas Copco Cut to Hold at Nordea

* Bouygues Cut to Underweight at Morgan Stanley; PT 30 euros

* Cembre Cut to Neutral at Banca Akros (+)

* Crayon Cut to Hold at Arctic Securities; PT 160 kroner (+)

* EDP Cut to Hold at Deutsche Bank; PT 5.10 euros

* Hugo Boss Cut to Underperform at BofA; PT 50 euros (+)

* Keywords Studios Cut to Hold at HSBC; PT 2,750 pence

* Logitech Cut to Hold at Deutsche Bank; PT 54 Swiss francs (+)

* NN Cut to Hold at HSBC; PT 46 euros

* Partners Group Cut to Neutral at Citi; PT 910 Swiss francs (+)

* Paragon Cut to Underperform at KBW; PT 540 pence

* Pennon Cut to Sell at Deutsche Bank; PT 870 pence
* Salmar Cut to Hold at SpareBank; PT 420 kroner

* Speedy Hire Cut to Hold at Finncap; PT 47 pence (+)

* Stabilus Cut to Hold at Stifel; PT 70 euros

* va-Q-tec Cut to Hold at Stifel; PT 26 euros

>>> Initiation

* Bank of Ireland Resumed Buy at Citi; PT 10.60 euros

* Credit Suisse Reinstated Hold at Deutsche Bank (+)
* Eqtec Rated New Buy at Panmure Gordon; PT 1.40 pence

* Eviso Rated New Buy at TP ICAP Midcap; PT 3.60 euros (+)

* Inchcape Resumed Overweight at JPMorgan; PT 1,300 pence (+)

* Intl Petroleum Reinstated Buy at Stifel Canada; PT 163.76 kronor

* Metso Outotec Reinstated Buy at Nordea; PT 12.80 euros (+)

* Odfjell Technology Rated New Buy at SpareBank; PT 60 kroner (+)

* Pendragon Resumed Buy at Berenberg; PT 35 pence

* Pendragon Rated Buy at Berenberg on Profit Opportunity (+)

* Swissquote Rated New Outperform at Credit Suisse

* Vontobel Rated New Underperform at Credit Suisse

>>> Call

* Bouygues Cut to Underweight as MS Sees Poor Cash Flow Prospects (+)

* Citi Positive on Irish Lenders, Resumes Bank of Ireland With Buy

* Inficon Reports Record Quarter Thanks to Solid Demand: Vontobel (+)

* Partners Group AUM Slowdown Is a ‘Clear Negative,’ Says Vontobel (+)

* Paragon Downgraded at KBW on Exposure to Buy-to-Let Mortgages (+)

* RBC Sees ‘Significant’ EPS Cuts Looming for US Homebuilders (+)

* Swissquote New Outperform at CS, Vontobel Started Underperform

WSJ : SEC Sues Crypto Firms Genesis and Gemini Over Lending Product

WASHINGTON—The Securities and Exchange Commission on Thursday sued Genesis Global Capital LLC and Gemini Trust Company LLC over a $900 million crypto-lending program that allegedly violated investor-protection laws.

The SEC filed its civil lawsuit in Manhattan federal court alleging that Genesis should have registered the product, which would have required providing clients with detailed financial disclosures. The companies began marketing the program to individual investors in February 2021 and raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors, the SEC said.

Under the program, called Gemini Earn, customers of crypto exchange Gemini lent their crypto assets to crypto lender Genesis in exchange for interest payments as high as 8%. Gemini took a fee for arranging the loan, which sometimes reached as much as 4.29%, the SEC said.

The two companies have been feuding since Genesis abruptly paused withdrawals from the program on Nov. 16 after it couldn’t meet client redemption requests in the wake of crypto exchange FTX’s collapse. At the time, Genesis held about $900 million in assets from 340,000 Gemini Earn customers, according to the SEC.

The SEC’s lawsuit seeks fines and the return of profits that were illegally earned.

“We look forward to defending ourselves against this manufactured parking ticket. And we will make sure this doesn’t distract us from the important recovery work we are doing,” Tyler Winklevoss, co-founder of Gemini, said in a tweet in response to the SEC suit.

A spokeswoman for Genesis didn’t comment.

Since Genesis paused redemptions, Gemini has banded together with other creditors of Genesis, saying it wants to find a way for the crypto lender to return owed assets.

In recent days, Cameron Winklevoss, who co-founded Gemini with brother Tyler, has ratcheted up the pressure on Genesis and its parent company, Digital Currency Group. Cameron Winklevoss traded barbs with Barry Silbert, chief executive of DCG, on Twitter last week. Cameron Winklevoss accused Mr. Silbert of “bad faith stall tactics,” and called for Mr. Silbert’s removal as CEO of the firm in two recent open letters posted on Twitter. A DCG spokeswoman has called the Winklevoss letters a “desperate and unconstructive publicity stunt.”

Genesis laid off 30% of its staff last week and is considering filing for bankruptcy, The Wall Street Journal recently reported. The crypto lender suffered steep losses from loans it supplied to the now-defunct trading firm Alameda Research and crypto hedge fund Three Arrows Capital. Both Alameda and Three Arrows filed for bankruptcy last year. Alameda is the sister trading firm of FTX.

The lawsuit against Genesis and Gemini resembles another case that the SEC and several states filed over BlockFi Lending LLC’s product, which allowed crypto traders to earn a yield for lending their digital assets. The SEC alleged that BlockFi’s interest-bearing accounts were securities and that the firm should have registered the product. BlockFi paid a $100 million fine to settle the allegations. The company didn’t admit or deny wrongdoing.

The new lawsuit is the second recent regulatory complaint filed against Gemini. The Commodity Futures Trading Commission also sued the crypto exchange last year.

The CFTC said in its civil case that Gemini misled regulators as part of an effort to gain approval for bitcoin futures in 2017. Gemini denied the CFTC’s claims at the time and said it would fight the allegations in court. The litigation is ongoing.

FT : China moves to take ‘golden shares’ in Alibaba and Tencent units

China moves to take ‘golden shares’ in Alibaba and Tencent units

Beijing changes tack in its efforts to secure a firmer grip on the country’s tech giants

China is moving to take “golden shares” in local units of Alibaba and Tencent as Beijng formalises a greater role in overseeing the country’s powerful tech groups.

The Chinese government has responded to a stuttering economy by backing away from the tough fines and sanctions that were a hallmark of its campaign to rein in the country’s largest tech groups, but which also scared off foreign investors.

While the heavy-handed crackdown has ebbed, the government is increasingly snapping up small equity stakes in the local operations of big tech companies, as it recently did with TikTok owner ByteDance.

This provides the Communist party with a mechanism to remain deeply involved in their businesses, particularly the content they broadcast to millions of Chinese people.

The stakes, usually involving a 1 per cent share of internet groups’ key entities, are akin to “golden shares” as they come with special rights over certain business decisions.

Within China the stakes are known as “special management shares” and since 2015 have become a common tool used by the state to exert influence over private news and content companies.

That was the aim of China’s internet regulator when it took a stake in an Alibaba unit last week, according to two people involved in the matter. An entity under the state investment fund set up by the Cyberspace Administration of China (CAC) acquired a 1 per cent share of an Alibaba subsidiary, Guangzhou Lujiao Information Technology, on January 4, according to Chinese business records.

CAC took the stake to tighten control over content at the ecommerce giant’s streaming video unit Youku and web browser UCWeb, the people said. As part of the deal the unit also appointed a new board member, Zhou Mo. CAC has a mid-level official with the same name.

It is unclear what rights the government will gain in many of the deals. China’s media regulator in 2016 advised state groups taking special management shares to demand at least a 1 per cent stake, a board seat and the right to review content.

The specifics of the government’s plan to take golden shares in Tencent remain under discussion, but will involve a stake in one of the group’s main China operating subsidiaries, three separate people briefed on the matter at Tencent said.

“The state is not going away, this is the trend for the future,” said one of the people.

Another person close to Tencent said the group was pushing for a government entity from its home base of Shenzhen to take the shares, instead of bringing in the Beijing-based state investment fund that took the stakes in the units of Alibaba, ByteDance and Weibo, China’s version of Twitter.

Chinese officials have used a variety of state groups to take the holdings. Executives at Nasdaq-listed streaming service Bilibili are pushing for a state entity in Shanghai to take shares in one of its subsidiaries, two people briefed on the matter said. When the government took a 1 per cent stake in short-video maker Kuaishou’s key onshore company last year, it turned to state-owned Beijing Radio and Television Station.

Documents seen by the Financial Times detail how the golden share arrangement works at ByteDance. They show how the government tightened its grip over the TikTok parent’s main Chinese entity in April 2021. A CAC-connected fund joined two other state groups to pay Rmb2mn for a 1 per cent stake in the unit, called Beijing ByteDance Technology.

The state groups took the shares through an entity called WangTouZhongwen (Beijing) Technology, which won the right to nominate one of Beijing ByteDance’s three directors. Communist party official Wu Shugang was appointed to the board. Wu headed CAC’s division supervising online commentary for several years and as part of the job visited companies around China to lead study sessions on the party and President Xi Jinping.

He gained attention a decade ago for saying, “I only have one wish — that one day I can cut off the dog head” of liberal Chinese people with western values, in a tweet to his personal Weibo account. “Let the Chinese traitors preaching so-called ‘human rights and freedom’ go to hell!!” he added.

In his role as a director of ByteDance’s main Chinese unit, Wu has a say over its “business strategy and investment plans”, any merger or acquisition, profit allocation and a vote on the group’s top three executives as well as their remuneration packages, the company charter shows.

While Beijing ByteDance’s other two directors can outvote Wu on some issues, the company bylaws show Wu was given the power to control the content at ByteDance’s media platforms in China. These platforms included the news aggregator app Jinri Toutiao and TikTok’s sister app Douyin, with Wu given the right to appoint the group’s chief censor, known at Chinese internet groups as the “editor in chief”.

“Appointing or dismissing the editor in chief requires approval from [WangTouZhongwen’s] director,” the company bylaws state. The documents show Wu was also given the right to chair a “content safety committee” set up within Beijing ByteDance, or alternatively appoint the committee’s chair. Board meetings are to be held at least every quarter or whenever Wu proposes them.

Last year executives at the TikTok parent changed the Beijing unit’s name to Douyin Information Service, removing “ByteDance” from its title in an effort to distance the China operations and Wu from its global products, two people briefed on the matter said.

ByteDance said the unit held licences for Douyin and Toutiao and that it had “no ownership, visibility or input into ByteDance’s global operations”.

Tencent and Kuaishou declined to comment. Alibaba, Bilibili and Weibo did not respond to multiple requests for comment. CAC did not respond to a faxed request for comment.

FT : Emerging market governments raise $40bn in January borrowing binge

Emerging market governments raise $40bn in January borrowing binge

Developing countries take advantage of brightening sentiment to kick off 2023 with hefty international debt sales

Emerging market governments have raised more than $40bn on international bond markets so far this year, as an easing of global inflationary pressures and hopes of an economic rebound in China clear the way for the fastest January borrowing spree on record.

A bruising sell-off that swept global fixed income last year, as big central banks responded to runaway inflation by sharply raising interest rates, effectively shut many borrowers in the developing world out of bond markets for long periods. But money has flooded back into bonds in the new year on further signs that inflation may have peaked in the US and the eurozone, with countries including Mexico, Hungary, and Turkey launching large bond sales.

“Last year, patience didn’t really pay off, the market continued to get worse as it went on,” said Stefan Weiler, head of CEEMEA debt capital markets at JPMorgan. “So this year, many sovereign borrowers have jumped through this window of opportunity as quickly as they could.”

Fourteen emerging market sovereign borrowers raised a total of $41bn from the start of January up until Thursday, according to data from Dealogic. That far outpaces the early days of any previous January, typically a busy month for debt sales, according to Bank of America strategists — the only year with a larger amount raised across the entire month was 2021 with $48.7bn.

The flurry of sales has come as emerging market bond prices rebound from 2022’s heavy losses. A JPMorgan gauge of emerging market foreign currency debt is up 1.7 per cent so far in January, having fallen by 17.8 per cent last year. Investors have dialled back their expectations of further interest rate increases in big developed economies, removing a headwind for emerging market debt.

Traders are now betting that the Federal Reserve will now increase rates by just a quarter of a percentage point next month after US inflation declined to the lowest annual pace in more than a year.

The reopening of China’s economy — a crucial engine of growth in the developing world — as draconian Covid-19 restrictions are lifted has added to the sense of optimism.

“The scrapping of the zero Covid policies has happened much faster than most people expected,” said Uday Patnaik, head of emerging markets debt at Legal & General Investment Management. “While [developed] countries are expected to go into recession, if you look at large EM economies, the only one forecast to be in recession this year is Russia.”

The scale of issuance also reflects demand from end investors who are warming to fixed income after last year’s bloodbath, according to Patnaik, who participated in recent bond sales by Israel, Turkey and Mexico. He said: “We are seeing interest in new mandates coming into EM partly because yields are so much higher. There is money that needs to be put to work, and issuers are taking advantage of that.”

Still, a global downturn could mean the current calm does not last, particularly for riskier emerging debt, some analysts argue. That prospect has made this month’s emerging market borrowing dash all the more urgent, argues Cristian Maggio, head of portfolio strategy at TD Securities.

“Some issuers may have decided to front-load,” he said. “If we are right that there will be a recession in several key economies I don’t think market conditions are necessarily going to stay benign.”

>>> Stoxx 600 Pre-Market Indications

United Internet (UTDI TH) +7.4%
- *UNITED INTERNET IS SAID TO MULL KICKING OFF IONOS IPO NEXT WEEK
Legal & General (LGI TH) +2%
Vodafone (VODI TH) +1.4%
BAT (BMT TH) +1.2%
Fuchs Petrolub (FPE3 TH) +1.1%
ING (INN1 TH) -0.6%
- Watch European Lenders Ahead of Busy Day for US Bank Earnings
Qiagen (QIA TH) -0.7%
Novo Nordisk (NOVC TH) -0.7%
Telefonica Deutschland (O2D TH) -0.8%
Eni (ENI TH) -0.8%
CTS Eventim (EVD TH) -1%
BBVA (BOY TH) -1.2%
Hugo Boss (BOSS TH) -2.1%
Bouygues (BYG TH) -2.6%
- Bouygues Cut to Underweight at Morgan Stanley; PT 30 euros

>>> TradeGate Pre-Market Indications

DAX:

No major mover

MDAX:

United Internet (UTDI TH) +7.4%
- UNITED INTERNET IS SAID TO MULL KICKING OFF IONOS IPO NEXT WEEK
TAG Immobilien (TEG TH) +2.1%
Hugo Boss (BOSS TH) -1.9%

SDAX:

Elmos Semiconductor (ELG TH) +3.2%
Shop Apotheke (SAE TH) +3%
1&1 (DRI TH) +1.3%
SGL (SGL TH) +1%
Ceconomy (CEC TH) -1.1%

>>> What to look at today - 13th of January 2023

A benchmark of global stocks headed for a weekly gain amid easing inflationary pressure in the US and expectations for smaller interest rate hikes. Shares were mostly higher in Asia despite choppy trading, putting a gauge of the region’s equities on course for the highest level since June. Hong Kong-listed tech companies swung between gains and losses as investors digested a report that China plans to take “golden shares” in the local units of Alibaba and Tencent, a move that may give the government more control of the strategic sector.

Japan’s Topix fell as the outlook for exporters dimmed with the yen’s recent surge. Sentiment was also damped by a slump in Fast Retailing’s shares after its profit missed estimates. The nation’s 10-year bond yield rose above the Bank of Japan’s 0.5% ceiling amid speculation the BOJ will review the side effects of its ultra-loose monetary policy. The yen was little changed after its 2.5% rally Thursday. Some US officials have signaled openness to making a 25 basis-point rate increase right at their next meeting, while also stressing the Fed still has more work to do to tame prices — and not anticipating any rate cuts this year. oil headed for a weekly gain and gold was set for a fourth weekly advance after breaching the $1,900-an-ounce mark in the wake of the release of the US inflation data. US After Hours HBI +8.7% higher on guidance; LC +4.4% on guidance and plan to streamline ops; SPCE +16.3% as it updates leadership structure and commercial spaceline ops are on track

Nikkei -1,25% Hang Seng +0,72% CSI +1,18% Shanghai +0,87% Shenzen +0,73%

Eur$ 1,0849 CNH 6,7386 CNY 6,7294 JPY 128,57 GBP 1,2206 CHF 0,9297 RUB 67,9250 TRY 18,7816 WTI$ 78,14 -0,30% Gold 1,897 BTC 18,857 ETH 1411

S&P -0,15% Nasdaq -0,22% EuroStoxx -0,02% FTSE +0,01% Dax +0,03% SMI +0,01%

Macro :
- Gold Giant JPMorgan Looks to Start Clearing Trades in Zurich

- Gemini, Genesis Sued by SEC for Rules Breach With ‘Earn’ Program

- China’s $7 Trillion ‘Hidden Debt’ Is Back in Focus: China Today

Keep an eye on :

- BOSH : Bosch Deepens Bet on China With $1 Billion Factory for EV Parts

- BP/ LN : BP Picks Oliver Stanford as New Head of US Crude Oil Trading

- CAV1V FH : Caverion Says Triton’s Crayfish Now Holds 9.8% of Shares

- CLNX SM : Cellnex Faces Hiring Dilemma as CEO Who Piloted Growth Departs

- HLE GY : Mahle Preparing Sale of Air Conditioning JV: WirtschaftsWoche

- IFCN SW : Inficon Prelim FY Sales About $581M, Est. $574.6M

- JMT PL : J. Martins FY Sales Beats Estimates

- KDEV SS : Karolinska Development Gets FDA Orphan Status for Golexanolone

- MRNA US : Moderna Covid Shot Price Hike Plan Hard to Justify: Jean-Pierre

- OVH FP : OVH 1Q Revenue EU216M Vs. EU187.2M Y/y
- PGHN SW : Partners Group Assets Under Management $135B Vs. $127B Y/y

- ROG SW : *TAMIFLU RELEASED FROM US STOCKPILE AMID MEDICINE SHORTAGES

- SAN FP : *PHARMACY BENEFIT MANAGERS ALSO SUED BY CALIFORNIA OVER INSULIN

- TOBII SS : Tobii Prelim 4Q Operating Profit Beats Estimates

- UTDI GY : Ionos, Euro Group Set to Reopen Europe’s Moribund IPO Market

- VOD LN : Vodafone Plans Hundreds of Job Cuts, Mostly in London: FT

- WG/ LN : Sparta Says Wood Group Guidance Shows ‘Underlying Strength’

>>> Europe : Brokers Upgrades & Downgrades - 13th of January 2023