>>> What to look at today - 18th of November 2022

Asian equities advanced, with tech shares in Hong Kong leading gains as investors grew more optimistic about a further easing in China’s Covid restrictions. A gauge of Chinese tech stocks jumped as much as 4.4% while the MSCI Asia Pacific Index headed for a third weekly gain. Goldman Sachs strategists upgraded Hong Kong stocks to market-weight on bets for a reopening of China’s economy.  Stocks climbed in Japan, Australia as well as South Korea, suggesting little reaction to news that North Korea had launched a missile. Treasury yields were steady after the previous day’s jump when St. Louis Fed President James Bullard said policymakers should increase interest rates to at least 5% to 5.25% to curb inflation. He also warned of further financial stress ahead. The dollar slipped after rallying on Thursday. Oil was poised for a weekly loss as concerns over a worsening demand outlook filtered through the crude market. Yesterday, fresh data showing weekly jobless claims came in below the forecast further underscored the strength of the labor market. US mortgage rates posting their biggest weekly decline since 1981 briefly improved sentiment, even though Freddie Mac’s chief economist said there’s a long road ahead for the housing market. In Japan, inflation hit its fastest clip in 40 years in October. The outcome puts the Bank of Japan in an even more awkward position as it tries to explain the need to stick with monetary stimulus to pursue stable price growth. gold edged higher as the dollar dropped. Bitcoin was on course for a weekly gain even as the collapse of Sam Bankman-Fried’s FTX empire continues to rattle the crypto market. US After Hours CLFD +16%, ROST +13.8%, STNE +10.6%, GPS +8.2%, PANW +5.7%, AMAT +2.9% higher on earnings; FTCH -10%, WSM -9.3%, DLB -9% lower on earnings.

Nikkei -0.11% Hang Seng -0.58% CSI -0.41% Shanghai -0.56% Shenzen -0.52%

Eur$ 1.0365 CNH 7.1367 +0.35% CNY 7.1283 JPY 140 +0.21% GBP 1.1893 +0.47% CHF 0.9523 RUB 60.4525 TRY 18.60 WTI$ 82.42 +0.94% Gold 1,761.70 +0.08% BTC 16,817 +0.81% ETH 1,221 +1.28%

S&P -0.12% Nasdaq -0.06% EuroStoxx +0.52% FTSE +0.15% Dax +0.39% SMI

Macro :
- Musk to Be Invited to EU Parliament: Politico
- UK Oil Industry Says £80 Billion Tax Burden Will Hurt Investment
- FTX’s New Boss Reveals Chaos Left Behind by Bankman-Fried
- Here’s What Investors Touted at Sohn Australia Conference (2)

Keep an eye on :
- ANE SM : Acciona Energia Maintains in ‘Broad Terms’ Outlook for FY 2022
- AIR FP : Boeing Max 7 Unlikely to Be Certified by Dec. Deadline: FAA
- ASML NA : Munro Partners’ Griffin Tips ASML as Top Pick at Sohn Australia
- BAVA DC : Bavarian Nordic Signs Procurement Pact for Monkeypox Vaccine
- BEKB BB : Bekaert 9M Revenue EU4.34B Vs. EU3.56B Y/y
- BWO NO : BW Offshore 3Q Ebitda Meets Estimates
- EDR SM : Holiday Spending Showing Signs of Weakening, Trivago Chief Says
- EXO NA : Exor Jumps After Ideas Swap at Special Situations Conference
- FTCH US : Farfetch 3Q Revenue Misses Estimates --> -15% in After Hours
- FDJ FP : Perpetual’s Anthony Aboud Pitches FDJ at Sohn Australia
- FLOW NA : Flow Traders CFO Mike Kuehnel to Become CEO Effective Feb. 1
- FNAC FP : Fnac Darty to Repay £89.6M Related to Sale of Comet by Kesa
- GPS US : Gap 3Q Total Comparable Sales Beats Estimates --> +9% in After Hours
- HOLN SW : Holcim Group Names Nestle’s Steffen Kindler as CFO
- KARN SW : Kardex Cuts FY22 Ebit Margin Outlook; Will Sell Robomotive Stake
- KWS LN : FACT Capital’s Meng Tips Keywords Studios at Sohn Australia
- NYR BB : Nyrstar Says Appeals Court Rules Expert Probe ‘Not Justified’
- REVOLUT : Fintechs Still Pushing Crypto But Distancing Themselves From FTX
- SAN FP : Sanofi: EC Approves Enjaymo for Some Hemolytic Anemia Patients
- SGRE SM : Siemens Gamesa OK’s Siemens Energy Bid, Appoints New Chairman
- TEF SM : Telefonica Plans Broad Spanish Price Hikes in Bid to Boost Sales
- TIT IM : Telecom Italia Picks Ericsson for 5G Core Network: Sole
- VOW GY : German Labor Union Wins 8.5% Wage Hike to Counter Inflation
- WBD IM : Webuild Grouping Gets €441m Rail Contract in Romania
- MF FP : Wendel Said to Mull Sale of €2 Billion Packaging Firm Constantia
- ZURN SW : Zurich Insurance to Launch Previously-Announced Buyback Nov. 21

>>> After Hours Summary: CLFD +16%, ROST +13.8%, STNE +10.6%, GPS +8.2%, PANW +5.7%, AMAT +2.9% higher on earnings; FTCH -10%, WSM -9.3%, DLB -9% lower on earnings


After Hours Summary: CLFD +16%, ROST +13.8%, STNE +10.6%, GPS +8.2%, PANW +5.7%, AMAT +2.9% higher on earnings; FTCH -10%, WSM -9.3%, DLB -9% lower on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: CLFD +16%, ROST +13.8%, STNE +10.6%, GPS +8.2%, PANW +5.7%, KEYS +3.5%, POST +3.3%, AMAT +2.9%, ESE +0.2%, BRBR +0.1%

Companies trading higher in after hours in reaction to news: ISEE +20.4% (FDA grants breakthrough therapy designation), PANW +5.9% (to acquire Cider Security), LPRO +4.5% (authorizes $75 mln repurchase program), EVH +2.6% (to acquire NIA from Centene), RXT +2% (appoints new CFO), CSIQ +1.6% (Japan flagship mega-project reaches commercial operation), DDS +1.5% (declares special dividend), AMD +0.6% (resolves patent litigations with ADI), CNC +0.6% (to sell Magellan Specialty Health to EVH), V +0.2% (appoints new CEO), CHRW +0.2% (increases quarterly dividend), DOCN +0.1% (appoints new CFO), SON +0.1% (expands Sonopost manufacturing in Europe)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FTCH -10%, WSM -9.3%, DLB -9%, GLOB -0.5%

Companies trading lower in after hours in reaction to news: GTHX -18.1% (commences public offering), RAPT -8% (announces public offering of $75 mln), VERX -6% (launches proposed public offering of 1.5 mln shares), INO -4.3% (provides update on Lassa Fever and MERS programs), KEY -1.4% (increases quarterly dividend, CFO to retire), AMED -0.8% (CEO to depart; Chairman named interim CEO), MET -0.3% (files mixed shelf), MIR -0.2% (files $1.0 bln mixed shelf)

TechCrunch : Binance’s CZ on FTX: ‘We were the last straw that broke the camel’s

Binance’s CZ on FTX: ‘We were the last straw that broke the camel’s back’

Binance co-founder and CEO Changpeng Zhao, also known as CZ, commented on the collapse of FTX at TechCrunch Sessions: Crypto 2022. He played down his personal role in the series of events that ultimately led to FTX filing for bankruptcy.

“I still don’t think I have that much influence. I think we were the last straw that broke the camel’s back. It’s not a straw that is really strong,” he told TechCrunch’s Anita Ramaswamy. “There’s a whole bunch of stuff that built up to it. I just may have happened to be the last thing that pushed it.”

He repeated some of the concerns that he has already expressed over the past few days. CZ believes the implosion of FTX is a negative event in the short term, but it will have a positive effect over the long term.

“Many consumers are really hurt financially, they have money stuck on FTX, etc. That’s going to really shake confidence and credibility in the industry,” CZ said. “We will have a lot more education to do. We do need to increase transparency of our businesses — significantly. That itself is actually probably a good thing.”

In many ways, CZ tried to differentiate Binance from FTX, saying that they are very different exchanges by design. But what makes Binance different?

“We still run a profitable business today, we’re okay,” CZ said. “I was very surprised by the amount of money that [FTX] lost, and the amount of customer funds they moved, and the state of things there.”

But Binance is still very dependent on transaction fees on its main crypto exchange. CZ said Binance generates around 90% of its revenue from that activity. And it changes vastly depending on the price of bitcoin.

If the crypto winter lasts longer than expected, Binance could start generating revenue from its other products, such as CoinMarketCap and Trust Wallet.

“When we acquired CoinMarketCap, they were making $3 million per month in ad revenue. We removed all ads so there’s no banners, no pop-ups,” CZ said. “It’s a much cleaner experience. But we can turn that back on. That’ll give us $40 million a year. But we don’t need to today. We have many products we provide for free just to increase the speed of adoption. But if we want to monetize those we could.”

The second concern with Binance is that Binance also has its own token with BNB. FTX’s demise all started with concerns about the value of FTX’s own token FTT.

“Fair concern, but we have proof of reserve and are working with auditors, regulators. We want to be as transparent as possible. We are in a very different situation than FTX,” CZ said.

The industry recovery fund
During the interview, Changpeng Zhao also talked about his plans to launch an industry recovery fund. It sounds like the fund is still very much a work in progress.

“It’s not set in stone. Different numbers have been thrown around. I’ve seen numbers around $2 billion and I’m not sure if that’s enough or too much,” he said.

While it sounds like a relief effort, Binance is approaching the fund with a business mindset. “There’s different ways to get compensation. We can get equity or ask for other things,” CZ said. Binance could also help open source projects if they don’t have enough funding. In that case, it would be traditional grants.

Yesterday, Genesis halted customer withdrawals for its institutional client base dealing with Genesis Global Trading. According to their website, they have $2.8 billion in total active loans.

Could Genesis benefit from some help from Binance’s industry recovery fund. “I can’t comment on specific deals. I would assume that there would be NDAs in place but we are looking at a large number of projects. Almost all projects you hear about in the news, they will have talked to us,” CZ said.

Going forward, there is a lot of work to do to rebuild trust. Sure, CZ said Binance has 100% reserve for user assets. But a simple statement like that is no longer enough given FTX’s former CEO Sam Bankman-Fried’s recent statements.

“Publishing a cold wallet address is a short-term temporary method. It doesn’t mean that you’re 100% guarantee. And as we have seen in certain cases, it actually increases the amount of questions when things don’t really add up,” CZ said. “How secure is the wallet infrastructure? What kind of technologies do you use for your custody solution? How do you handle customer disputes? In which situations do you compensate users or not compensate users?”

Of course, he believes Binance is a cutting-edge exchange on all those questions. “And we actually would like to share many of them to make them industry standards — like how we manage wallets. I think we have one of the most secure technologies for managing wallets. We also manage the largest wallets in the world,” he said.

Many people believe FTX’s collapse will lead to more decentralization. In that case, FTX was a single point of failure. Many users lost some money because of that centralization.

But CZ doesn’t necessarily see that as an existential risk. According to him, there will always be centralized entities and decentralized technologies in the crypto industry.

“Today, if you ask everybody in the world who does not have crypto to hold crypto on their own, they are not technically capable of doing that,” he said. “So if we just force people to go from banks directly to DeFi, Most of them will lose their own money because they misplaced it, or they lost their keys, or they don’t know how to encrypt it, etc. That’s not the best way to grow the industry.”

FT : Adler inflated balance sheet by €3.9bn and earnings by €543mn, BaFin finds

Adler inflated balance sheet by €3.9bn and earnings by €543mn, BaFin finds
Second time this year real estate group has had 2019 accounts questioned by German watchdog

Adler inflated its balance sheet by €3.9bn and its earnings by €543mn in 2019, according to Germany’s financial regulator, which could have allowed the struggling real estate group to report a profit for the year.

BaFin on Thursday said that Adler incorrectly consolidated Luxembourg-based peer ADO Properties despite controlling just a third of voting rights, which the regulator argued was too low to guarantee control over the company.

By consolidating ADO Properties’ €4.4bn in assets, Adler inflated its balance sheet by a net €3.9bn, according to BaFin. Adler’s total reported assets in 2019, with ADO included, were €10.7bn.

As a consequence, Adler’s reported net profit in 2019 was inflated by €543mn, BaFin said. The group reported a net profit of €299mn for the year, implying that without the boost from ADO Properties it could have potentially made €244mn in losses.

Adler, which owns 26,000 flats in Germany and has come under sustained pressure from short sellers, does not agree with the regulator’s assessment and is appealing against the decision.

“Adler and BaFin have different opinions on this matter, which are now being clarified by taking legal action,” the company said in a statement, adding it was in “good and constructive dialogue with BaFin despite opposing positions”.

It this the second time this year that BaFin has flagged mistakes in the group’s 2019 accounts. In August, the watchdog said that the sale of a property project in Düsseldorf was booked at roughly double its fair valuation, inflating Adler’s accounts by up to €233mn.

The case is the first test of BaFin’s new competencies to probe listed firms’ accounts. The regulator’s powers were significantly expanded after the collapse of fraudulent German payments group Wirecard in 2020.

Thorsten Pötzsch, the head of BaFin’s new accounting division told the Financial Times in August that the watchdog would operate a zero-tolerance policy adding that “the risk of getting caught has never been as high as it is today”.

The new findings deepen Adler’s accounting woes as it struggles to find a new auditor after KPMG refused to sign off the 2021 financial results and then ditched the company as a client earlier this year.

Adler was plunged into crisis after short-selling firm Viceroy Research in October 2021 accused the company of widespread fraud, inappropriate related-party transactions and accounting manipulations. Adler denied any wrongdoing.

The Frankfurt-listed shares of its Luxembourg-based holding company plunged 85 per cent over the past 12 months even as it has divested large chunks of its portfolio in an attempt to lower its debt.

BaFin on Thursday also said that Adler’s 2019 annual report, which was signed off by German audit group Ebner Stolz, downplayed the risks arising from the lack of control over ADO, in particular that indebtedness could be significantly higher. “Without the full consolidation, the loan to value ratio would have been risen significantly to about 70 per cent,” BaFin said in a statement. The reported number just stood at 51.4 per cent.

Moreover, BaFin publicly rebuked Adler for not keeping records about potential related party transactions in a violation of German accounting laws. “The accounting documents were incomplete in that regard”, BaFin said.

Viceroy’s report last year claimed to identify a series of transactions between a nexus of closely related parties that it alleged had carried out to “systematically enrich themselves” to the detriment of other investors. Adler rejected the allegations.

The BaFin probe into the group’s accounts is continuing.

FT : Siemens: tech tactics are not priced into the valuation

Siemens: tech tactics are not priced into the valuation
Digital industries provide most of the optimism for the German conglomerate’s outlook

Ill winds from the energy crunch are doing little to buffet Siemens. The German industrial titan reported results on Thursday well ahead of expectations. Full-year profits from the industrial business hit a record high of €10.3bn. New orders and revenues were both a tenth better than analysts were expecting. A bullish outlook from management helped push shares up more than 7 per cent in morning trade.

Chief executive Roland Busch will continue the legacy of his predecessor of streamlining the conglomerate to focus on core digital products. As part of the former, Busch wants to combine five businesses involving drives and motors into a new company next year with 14,000 employees and annual revenues of €3bn.

A spin-off or sale can be expected once that is complete. Assuming similar earnings and valuation as competitor ABB, this motors/drives unit might be worth €9bn. That is roughly a tenth of Siemens’ market value.


But it is Siemens’ digital industries division, which house software and automation businesses, that provide most of the optimism for Siemens’ outlook. Revenues in the most recent quarter grew 18 per cent year on year and a €14bn order book is a record high.

Automation revenues up 23 per cent outpaced those at divisions of rivals Schneider and ABB in the latest quarter, notes Jefferies. A company growth target of 12 per cent next year is three times higher than consensus had been pencilling in.

Recurring revenues of €3.6bn were 14 per cent higher than last year. Importantly cloud revenue growth was stronger; these represent 15 per cent of the total up from just 5 per cent a year ago.

At 14 times forward earnings the valuation is in line with its 10-year average but well below peers trading closer to 20 times. The strength of the German group’s free cash flow can help close that gap. Analysts have already forecast the group will increase free cash flow by more than half by 2025 to more than €10bn, which should mean more dividends to shareholders.

Siemens’ restructuring appears to be working. Its valuation discount plus the secular growth from its automation business should support the shares.

HighSnobiety : LOUIS VUITTON IS TURNING ITS PARIS HQ INTO A HOTEL

LOUIS VUITTON IS TURNING ITS PARIS HQ INTO A HOTEL

Louis Vuitton plans to transform its corporate headquarters in Paris into a hotel "within the next five years," according to CEO Michael Burke.
In a recent interview, Burke explained that the headquarters — located in Paris' 2nd arrondissement near the famed Pont Neuf bridge — will undergo a massive revamp over the next decade. In addition to a hotel, the sprawling space will also house the world's largest Louis Vuitton store.

While Burke predicted that his vision for the brand's HQ will likely take anywhere from 10 to 15 years to execute, Louis Vuitton has already taken a first step towards transforming the building into a cultural hub.
Starting December 12, the 400,000-square-foot building will play host to LV Dream, an experiential installation exhibiting Louis Vuitton's long list of artist collaborations (Takashi Murakami, Richard Prince, and Yayoi Kusama included).
The attraction will also feature a gift shop, cafe, and chocolate shop run by Maxime Frédéric, head pastry chef at Cheval Blanc Paris, a luxury hotel operated by — surprise! — LVMH.
Despite the fact that Cheval Blanc is located just across the street from LV's headquarters and future hotel, Burke doesn't anticipate the two clashing. "[The Louis Vuitton hotel] would be its own identity, and own segment and own service — a completely different experience," he told WWD.
“Food and beverage and lodging are clearly in the future of Louis Vuitton," Burke elaborated, suggesting that the company's existing roster of restaurants and cafés will expand.