Gapping up
In reaction to earnings/guidance:
- HCA +5.7%, CSX +2.6%, OZK +2.5%, PG +2.1%, VMI +2% (also $400 mln share repurchase reauthorization and a 9% dividend increase), ASB +2%, HTH +1.7%, SAP +1.6%, FFBC +1.3%, PPG +0.8%
Other news:
- WISH +17.7% (authorizes new $50 mln share repurchase program)
- CANG +5.3% (authorized $50 mln new share repurchase program)
- MDXH +4.9% (received notice that its Select mdx for Prostate Cancer test has successfully completed a rigorous technical assessment process with the Molecular Diagnostics Services (MolDX) Program developed by Palmetto GBA.)
- AMTD +3.6% (secured $93.6 mln of investment at 21.07% premium above prior day's closing price)
- LMAT +3.4% (to distribute AZYO's cardiovascular patches in the US)
- SPRY +2% (stock offering byselling shareholders)
- ASPN +1.6% (suing Korean supplier for patent infringement)
- JANX +1.6% (first patient dosed in Phase 1 trial of JANX008)
- AXTA +1.5% (in sympathy with PPG earnings)
Analyst comments:
- T +0.9% (upgraded to Buy from Hold at HSBC Securities)
Gapping down
In reaction to earnings/guidance:
- ALV -4.3%, CNXN -3.7%, WRB -3%, OCFC -2.7%, GBCI -0.9%, XM -0.9%, KNX -0.7%
Other news:
- BHP -3.5% (provides nine-month operations update)
- BAM -1.8% (exploring possible counterbid for Network Intl according to WSJ)
- PKE -1.8% (enters into cooperation agreement with activist firm)
- PFG -1.5% (reports March AUM)
- SSL -1.5% (provides quarterly update and provides outlook)
- NAVI -0.7% (files mixed shelf securities offering)
Analyst comments:
- BIG -6.4% (downgraded to Underweight from Neutral at Piper Sandler)
- OSTK -3.2% (downgraded to Neutral from Overweight at Piper Sandler)
Early premarket gappers
- Gapping up:
- WISH +22.8%, MDXH +8.6%, AMTD +8.3%, CANG +6.1%, ASB +4.6%, LMAT +3.4%, VMI +3.2%, SPRY +2%, HTH +1.7%, CSX +1.7%, ASPN +1.6%, JANX +1.6%, FFBC +1.3%, SAP +1.3%, OZK +1.2%, AXTA +0.9%, UAL +0.6%, TMUS +0.5%
- Gapping down:
- CNXN -4%, ALV -3.8%, BHP -2.9%, OCFC -2.7%, WRB -2.4%, BAM -1.8%, PKE -1.8%, RF -1.6%, PFG -1.5%, SSL -1%, GBCI -0.9%, XM -0.9%, NAVI -0.7%, KNX -0.7%
>>> Up
* Arjo Raised to Hold at Pareto Securities; PT 42 kronor
* IMI Raised to Buy at HSBC; PT 1,960 pence
* IMI Raised to Buy at HSBC; PT 1,960 pence
* Mediobanca Raised to Hold at Deutsche Bank (+)
* Mensch und Maschine Raised to Buy at Bryan Garnier; PT 62 euros (+)
* Nokia Raised to Buy at Inderes; PT 4.80 euros
* TUI Raised to Buy at Redburn
* Veolia Raised to Buy at Deutsche Bank; PT 33 euros (+)
>>> Down
* DNB Bank Cut to Neutral at Citi; PT 213 kroner
>>> Down
* DNB Bank Cut to Neutral at Citi; PT 213 kroner
* GenSight Biologics Cut to Neutral at Chardan Capital Markets
* GenSight Biologics Cut to Neutral at Bryan Garnier (+)
* Seagate Cut to Equal-Weight at Morgan Stanley; PT $60
* Severn Trent Cut to Hold at Deutsche Bank (+)
>>> Initiation
* Adyen Rated New Outperform at CICC; PT 1,770.35 euros
>>> Initiation
* Adyen Rated New Outperform at CICC; PT 1,770.35 euros
* Alfen Rated New Buy at Deutsche Bank; PT 100 euros (+)
* Elementis Resumed Equal-Weight at Barclays; PT 141 pence (+)
* Fastned GDRs Rated New Buy at Deutsche Bank; PT 50 euros (+)
* XXL Reinstated Sell at Nordea; PT 1.80 kroner
>>> Call
* Swedbank Gets Positive Catalyst Watch at Citi, DNB Downgraded
>>> Call
* Swedbank Gets Positive Catalyst Watch at Citi, DNB Downgraded
* Tele2’s 1Q Ebitda Miss Driven by Sweden, Morgan Stanley Says
* TUI Gains as Redburn Lifts to Buy on Much-Improved Business (+)
- Mercedes (MBG TH) +2.9%
- Mercedes Beats Earnings Estimates by Charging More for Its Cars
- BMW (BMW TH) +1.4%
- Tesla Price Cut Concern for BMW, Mercedes as Supply Normalizes
- Anglo American (NGLB TH) +1.2%
- Watch European Miners as Iron Ore Price Slips to December Low
- Porsche Automobil (PAH3 TH) +1.1%
- VW (VOW3 TH) +0.8%
- Tesla Price Cut Concern for BMW, Mercedes as Supply Normalizes
- Renault (RNL TH) +0.8%
- Stellantis (8TI TH) +0.8%
- Thyssenkrupp (TKA TH) -0.8%
- Aurubis (NDA TH) -0.8%
- HelloFresh (HFG TH) -0.9%
- HelloFresh Reader Interest Increases
- Repsol (REP TH) -1.1%
- Telefonica Deutschland (O2D TH) -1.4%
- SAP (SAP TH) -2.1%
- SAP Sees Full-Year Profit Beating Estimates on Cloud Gains (1)
- Genmab (GE9 TH) -3.2%
- Genmab: Tribunal Dismissed Claims vs Janssen Over Daratumumab
DAX:
- Mercedes (MBG TH) +3%
- Mercedes Beats Earnings Estimates by Charging More For Its Cars
- Porsche Automobil (PAH3 TH) +1.4%
- BMW (BMW TH) +1.3%
- Continental (CON TH) +1.3%
- SAP (SAP TH) -1.9%
- SAP Sees Full-Year Profit Beating Estimates on Cloud Gains (1)
MDAX:
- No major mover
SDAX:
- MorphoSys (MOR TH) -1.5%
>>> Up
* Arjo Raised to Hold at Pareto Securities; PT 42 kronor
* IMI Raised to Buy at HSBC; PT 1,960 pence
* IMI Raised to Buy at HSBC; PT 1,960 pence
* Nokia Raised to Buy at Inderes; PT 4.80 euros
>>> Down
* DNB Bank Cut to Neutral at Citi; PT 213 kroner
>>> Down
* DNB Bank Cut to Neutral at Citi; PT 213 kroner
* GenSight Biologics Cut to Neutral at Chardan Capital Markets
* Seagate Cut to Equal-Weight at Morgan Stanley; PT $60
>>> Initiation
* Adyen Rated New Outperform at CICC; PT 1,770.35 euros
>>> Initiation
* Adyen Rated New Outperform at CICC; PT 1,770.35 euros
* XXL Reinstated Sell at Nordea; PT 1.80 kroner
>>> Call
* Swedbank Gets Positive Catalyst Watch at Citi, DNB Downgraded
>>> Call
* Swedbank Gets Positive Catalyst Watch at Citi, DNB Downgraded
Asian equities followed losses on Wall Street after US data showed a softening in manufacturing and the labor market. The dollar and yen strengthened on concern of rising tensions between America and China. Shares in China, Australia and Japan all fell. South Korea’s tech-reliant Kospi Index pulled back after getting close to a bull market, tracking Thursday’s decline in the Nasdaq 100. Futures for US equity benchmarks were little changed. The dollar advanced against most of its Group-of-10 peers, with a gauge of its strength set for its first weekly gain in six weeks. The yen outperformed as rising geopolitical tension spurred traders to buy the haven currency before the weekend. US President Joe Biden aims to sign an executive order in the coming weeks that will limit investment in key parts of China’s economy by US businesses, people familiar with the internal deliberations said. Recurring claims for US unemployment benefits jumped to the highest level since November 2021, adding to signs the labor market is beginning to cool. Sales of previously-owned homes fell in March by more than economists forecast, underscoring a housing market that’s still on shaky footing despite some signs of stabilizing. US mortgage rates rose for the first time since early March. The data led traders to pare bets on more Federal Reserve rate hikes. The policy-sensitive two-year Treasury yield dropped one basis point to 4.13% after sliding 10 basis points on Thursday. In China, Contemporary Amperex Technology Co. shares rallied after the battery maker’s revenues surged in the first quarter. oil extended declines after dropping by the most in more than a month on Thursday, wiping out almost all of the gains stemming from OPEC+’s output cut on signs of a global economic slowdown. Gold was little changed around a $2,000 an ounce. US After Hours VMI +3.4%, CSX +2.4% higher on earnings; CNXN -6.3% lower on guidance.
Nikkei -0.32% Hang Seng -0.64% CSI -1.04% Shanghai -1.11% Shenzen -1.71%
Eur$ 1.0960 CNH 6.8940 CNY 6.8877 JPY 133.89 GBP 1.2430 CHF 0.8935 RUB 81.5938 TRY 19.4040 WTI$ 77.34 Gold 2,000 -0.24% BTC 28,235 +0.10% ETH 1,939 +0.07%
S&P -0.01% Nasdaq +0.08% EuroStoxx +0.14% FTSE +0.06% Dax +0.01% SMI +0.04%
Macro :
- Fed Officials Back Another Hike While Watching Banking Fallout
- UK Confidence Jumps to Highest Since War Triggered Price Surge
- Taiwan Quietly Urges US to Calm Rhetoric on China Chip Risk
Keep an eye on :
Keep an eye on :
- ALMA FH : Alma Media 1Q Adjusted Operating Profit Meets Estimates
- BAMI IM : Banco BPM Not Planning to Pursue M&A: CEO Castagna to Sole
- BVI FP : Bureau Veritas 1Q Organic Revenue Beats Estimates
- CARM FP : Carmila 1Q Net Rental Income EU86.4M Vs. EU81.9M Y/y
- ACA FP : Credit Agricole Reached Settlement to Sidestep ‘Cum-Cum’ Probe
- CTT PL : CTT Says Shareholders Reappoint CEO Bento for 2023-2025 Term
- EDPR PL : EDPR Secures 109 Mwac Long Term PPA for Italy Solar Portfolio
- EFGN SW : EFG 1Q Profit Exceeds CHF90m vs CHF202m in Full Year of 2022
- ENGI FP : Engie, EDP Give Go-Ahead for £2 Billion UK Offshore Wind Farm
- EL FP : EssilorLuxottica 1Q Revenue Beats Estimates
- FLOW NA : Flow Traders 1Q Normalized Net Trading Income EU110.4M
- FNAC FP : Fnac Darty 1Q Like-for-Like Sales -0.1%
- GFC FP : Gecina 1Q Like-for-Like Rental +7.3%
- GMAB DC : Genmab: Tribunal Dismissed Claims vs Janssen Over Daratumumab
- GTT FP : GTT 1Q Revenue EU79.9M Vs. EU68.2M Y/y
- HEN3 GY : Henkel Divests Business Activities in Russia
- HOLN SW : Holcim Lifts Full-Year Outlook After Surprisingly Strong Quarter
- IPS FP : Ipsos 1Q Organic Revenue -2.8%
- MBG GY : Mercedes-Benz 1Q Prelim Results Exceed Expectations
- MERY FP : Mercialys 1Q Rental Rev. EU43.6M
- MERY FP : Mercialys 1Q Rental Rev. EU43.6M
- MTRS SS : Munters 1Q Ebit Beats Estimates
- NETW LN : Brookfield Said to Explore Counterbid for Network International
- META US : Meta Plans to Cut More Than 10% of UK Workforce: FT
- NHY NO : Norsk Hydro: Shipping of Products to Customers Will Be Resumed
- 1913 HK : Prada Looks to Buy Italian Suppliers to Shorten Supply Chain
- SFER IM : Salvatore Ferragamo 1Q Revenue Misses Estimates
- SAP GY : SAP 1Q Non-IFRS Revenue Beats Estimates
- GLE FP : SocGen’s ALD Delays EGM to May 22 Pending EC Remedy Decision
- S30 FP : Solutions 30 FY Adjusted Ebitda Misses Estimates
- SUR LN : Sureserve to Disclose £200m Takeover Bid by Cap10: Sky
- TKTT FP : Tarkett 1Q Net Sales EU698.4M Vs. EU684.7M Y/y
- TEL2B SS : Tele2 1Q Adjusted Ebitda After Leases Misses Estimates
- TKO FP : Tikehau 1Q Group AUM Reach €39.7 Billion, Up 12% YoY
- URW NA : Hammerson, Unibail in Talks on Croydon Project Stake Sale: Sky
- VONN SW : Vontobel Assets Under Management CHF211.7B Vs. CHF204.4B Q/Q
- VOW GY : Volkswagen Gets $10 Billion Pledge From Canada for Battery Plant
- WHA NA : Wereldhave 1Q EPS EU0.46 Vs. EU0.39 Y/y
- YIT FH : YIT Sees FY Adj. Oper Profit at Least EU50M, Saw Below EU110M
Credit Suisse Investors Challenge Switzerland’s $17 Billion Bond Write-Down
A group of creditors have filed legal action against the country’s financial regulator, arguing it violated Swiss law when it wrote down around $17 billion of bank bonds
Credit Suisse Group AG bondholders have launched a legal challenge in Switzerland against regulators’ decision to write down $17 billion in securities as part of UBS Group AG’s rescue of the troubled bank last month.
Bondholders holding about 4.5 billion Swiss francs ($5 billion) of Credit Suisse’s canceled debt want the decision to write down their bonds revoked or amended, according to an outline of their appeal made in a Swiss administrative court and reviewed by The Wall Street Journal. The bondholders are alleging the total write-down was disproportionately punitive to them and violated their property rights, according to the summary of the legal filing.
The legal action opens a new front in sorting out the financial wreckage from Credit Suisse’s abrupt rescue last month, which has done considerable damage to Switzerland’s reputation for safeguarding wealth.
Markets were stunned when Swiss authorities wiped out the $17 billion in Additional Tier 1 bonds as part of UBS’s $3.25 billion purchase of Credit Suisse in March. Typically, shares in a bank would have to be written down entirely before creditors would have to take losses or be bailed in.
But Switzerland’s financial regulator, Finma, determined the $17 billion Additional Tier 1 debt contractually could be written down in the rescue because the government backstopped the $3 billion purchase of Credit Suisse by UBS in March. Additionally, Swiss lawmakers gave Finma emergency authority to write down the AT1 bonds on March 19, the same day that UBS took over the bank. Shareholders of Credit Suisse are to receive more than $3 billion in UBS shares for their stock in the bank, however.
Bondholders bringing claims against the Swiss government allege the bond write-down didn’t serve the purpose of restoring Credit Suisse to financial health and damaged international investors’ trust in Switzerland.
“Tuesday’s filing was the first in a series of steps we will be taking to seek redress for our clients who have been unlawfully deprived of their property rights,” said Richard East, a London-based partner with Quinn Emanuel Urquhart & Sullivan LLP, the law firm that filed the Swiss complaint.
The Swiss regulator said last month that the design of the AT1 bonds meant they could be written down before stock was wiped out. If the regulator had put the bank into resolution and recapitalized it, the bank’s equity likely would have been entirely written down before bailing in bonds, according to earlier statements made by the Swiss regulator about its procedures.
Regulators created the class of AT1 bonds after the 2008 financial crisis as a type of bank capital, meant to help financial institutions absorb losses in a downturn. AT1 bonds can be converted into common equity or written off in cases of extreme stress, depending on their terms.
Sometimes called contingent convertible bonds, or Cocos, the securities surged in popularity in Europe over the past decade as a regulator-approved way to build buffers that could protect banks in times of trouble without having to tap taxpayer funds. For investors, AT1 bonds offered high yields during a decade of low and sometimes negative interest rates, recently paying annual percentage interest rates of mid-to-high single digits.
The write-down by Swiss regulators has curbed market demand for AT1 securities across Europe and Asia, even though other national regulators have said they would respect traditional creditor hierarchies ranking bonds ahead of stocks. Banks across Europe and Asia meet their capital requirements with AT1 bonds, which have gotten more expensive for borrowers as investors fear they too could be forced to swallow losses.
However, the market is showing signs of reviving. Japan’s Sumitomo Mitsui Financial Group issued $1 billion of AT1 bonds this week, the first major bank to issue this type of bond since the write-down of Credit Suisse’s bonds.
The cost of borrowing for banks has started to decrease “on the perception that Credit Suisse was an idiosyncratic case, but the market remains skittish,” wrote CreditSights analysts in a research note this month. “We see more volatility in the short term but a gradual improvement over the long term.”