TheChek News Flow

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

WFRD +4.3% (guidance) MATX +3.9% (guides Q3 EPS above dual analyst consensus), AAL +0.4% (guidance)

Other news:

TARA +19.4% (announces FDA clearance of investigational new drug application for TARA-002 for the treatment of non-muscle invasive bladder cancer)

QTRX +12.8% (receives Breakthrough Device designation from the FDA for Simoa pTau-181 blood test)

SLI +10% (announces positive preliminary economic assessment)

WWR +9.2% (provides results from Definitive Feasibility Study)

PSTX +8.9% (announces research collaboration and exclusive license agreement with Takeda Pharmaceutical (TAK) )

TIPT +6.9% (announced a $200 million strategic investment in its insurance subsidiary, The Fortegra Group from Warburg Pincus)

IFRX +6.7% (completes enrollment of Vilobelimab Phase III study in severe COVID-19 )

AERI +6.4% (reports Phase 3 topline results for Netarsudil Ophthalmic solution 0.02% clinical trial in Japan)

PAGS +4.4% (Board of Directors has appointed Mr. Alexandre Magnani as Chief Operating Officer)

GERN +3.7% (announces publication of analyses comparing real world data to IMbark Phase 2)

SIG +3.1% (to acquire Diamonds Direct USA for $490 mln in an all cash transaction; raises guidance)

NRXP +2.9% (announced that a revised Investigational New Drug module on the manufacturing of ZYESAMI (aviptadil) was submitted to the FDA)

XP +2.6% (reports performance highlights for Q3)

TGB +2% (reports Q3 copper production increased 29%)

Analyst comments:

ABNB +2.4% (upgraded to Outperform from Market Perform at Cowen)

GFI +2.1% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)

KEX +1.8% (upgraded to Buy from Hold at Stifel)

AYI +1.1% (upgraded to Neutral from Sell at UBS)

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

AVTR -1.2% (guidance) FAST -0.8%

Other news:

RLAY -10.2% (commences $350 mln public offering)

NDAQ -2.5% (reports Sept metrics)

AESE -2.3% (names ew CFO)

FTI -1.8% (awarded long-term charter and services contract by Petrobras)

APAM -0.4% (reports Sept AUM)

Analyst comments:

ATUS -2.1% (downgraded to Hold from Buy at Deutsche Bank)

AMKR -2.1% (downgraded to Neutral from Outperform at Credit Suisse)

CTXS -2.1% (downgraded to Mkt Perform from Outperform at William Blair)

>>> US Early premarket gappers

Early premarket gappers

Gapping up:
QTRX +14.8%, WWR +10.3%, GERN +7.5%, MATX +4.3%, XP +2.6%, RKLB +2.4%, PAGS +1.5%, ACGL +1.4%, TGB +1%, AESE +0.6%

Gapping down:
RLAY -9.2%, NDAQ -2.5%, FTI -1.6%, APAM -0.5%

FT : China’s bellicose behaviour is the driver of tensions in Asian waters

China’s bellicose behaviour is the driver of tensions in Asian waters

Region has become world’s busiest staging ground for military rivalry between Beijing and liberal democracies

This autumn is a hot one in Asian waters: varying groups of countries mostly allied with the US are holding military exercises in an area that China views as its backyard.

Two American and one British aircraft carrier held an exercise with 15 other warships from Japan, New Zealand, Canada and the Netherlands near Okinawa and in the Philippine Sea on October 2 to 3. Then the three carriers moved into the contested South China Sea, where they operated with Australian, Canadian, Japanese and New Zealand warships.

By now, the vessels from the UK, Australia and New Zealand are holding drills with those from Singapore and Malaysia. The American and Japanese warships and some Australian ones are sailing in the South China Sea and the Bay of Bengal as part of Malabar, a drill started by India and the US but now combining the navies of all four Quad countries.

The string of manoeuvres is a harbinger of the region’s future. As competition between China and liberal democracies intensifies, east and south-east Asia is becoming the world’s busiest staging ground for the two sides’ military rivalry.

Analysts say China’s use of its growing military clout to assert expansive territorial claims against its neighbours and pursue regional dominance will compel outside powers to become more and more involved.

Japan is converting its helicopter carrier Kaga into an aircraft carrier and could deploy it to the South China Sea carrying F-35 jets in the years to come.

Last month, the US, UK and Australia stunned China by announcing Aukus, a security partnership that will enable Australia’s navy to project power into the entire Indo-Pacific with nuclear-propelled submarines. Huong Le Thu, a senior analyst at the Australian Strategic Policy Institute, a think-tank backed by the Australian defence ministry, expects a multitude of similar arrangements between small groups of countries to emerge aimed at pushing back against China.

“The regional architecture was designed around the Association of Southeast Asian Nations, but Asean has a hard time being effective in times of crisis, tension and potential conflict,” she said. “Minilaterals are easier and faster mechanisms because countries are more like-minded and more focused. The Biden administration is likely to seek similar arrangements with other countries.”

The growing presence of external powers complicates things for China’s People’s Liberation Army.

When the Queen Elizabeth sailed in the South China Sea last week, a Chinese maritime survey vessel, which had repeatedly operated in the exclusive economic zones of other South China Sea claimant states, had to abruptly change its course to avoid the British aircraft carrier.

Beijing has given its adversaries a first taste of how it could eventually push back: during the six-nation naval exercise near Okinawa, almost 150 Chinese warplanes flew threatening manoeuvres in international airspace close to Taiwan.

In the South China Sea, Beijing’s reactions have been less drastic so far. Normally the PLA tracks US or allied warships in those waters with a small number of destroyers or frigates — enough to put the western ships into high alert, but dangerous incidents are comparatively rare.

“Operations against Japan and Taiwan are the PLA’s bread and butter, partly because they are closer to the Chinese mainland,” said Alexander Neill, an expert on Asian security affairs who runs a strategic consultancy in Singapore. “The South China Sea is still further out for the PLA.”

But that is changing. China has cemented several South China Sea reefs into artificial islands and built runways and other military installations. Security experts believe that these bastions, equipped with modern communications gear, have drastically expanded the PLA’s ability to track enemy ships and aircraft in the region and provide targeting data for missiles. Moreover, Beijing has stepped up military deployments on Hainan, including electronic warfare, early warning and anti-submarine warfare aircraft and large naval vessels.

“China’s eyes and ears are getting closer — their electronic and signals intelligence reach as far as Singapore now, and we may start seeing them use the newly deployed ships and aircraft soon,” said Neill.

South-east Asian countries have a harder time sitting on the fence. The PLA flew 16 fighter aircraft towards the coast of Borneo in June, triggering an angry response from Malaysia, a country normally trying to keep good relations with Beijing.

External powers are investing big to empower China’s neighbours to push back. The US, Japan and South Korea have all given coast guard ships to Vietnam. India has helped train Vietnamese sailors and offered financing for defence purchases.

“It is China’s coercion and self-isolating behaviour which contributes to this,” said Neill.

(BN) *GLAXO'S $54B CONSUMER UNIT IS SAID TO ATTRACT BUYOUT INTEREST

FT : Ministers plan to overhaul capital raising rules to boost London market

Ministers plan to overhaul capital raising rules to boost London market

Review will seek to include more retail investors in secondary placings

Ministers are planning to make it easier for UK-listed companies to raise capital as part of a wide-ranging strategy to boost London’s stock market after Brexit.

Officials want to give companies more options to tap into deeper pools of money when raising funds through so-called secondary transactions such as selling new shares in a rights issue. They are also seeking to help companies access a more diverse range of investors.

Secondary fundraisings are often used when companies want money for emergencies or to finance investment in growth strategies that require cash quickly.

Chancellor Rishi Sunak said plans to boost UK markets go beyond attracting companies to list. “We want to make sure companies who already tap our world-leading capital markets can raise finance efficiently and include their current shareholders in the process,” he said.

Most companies that took more than £30bn last year in secondary raisings did so through private placings, using only a small number of institutional investors. This route is typically faster and costs less but excludes existing shareholders and dilutes other investors’ stakes in the company.

In contrast, only nine rights issues occurred. Like open offers of new shares to all existing shareholders, these tend to involve greater cost, time and uncertainty and involve the publication of a prospectus. Between January and August this year, £9.5bn was raised in 393 secondary transactions.

The new review will consider whether to relax the rules around rights issues — which preserve the interests of existing investors in the company — to make them more attractive.

Officials also want to open up fundraisings to retail investors, who in the past have been locked out of these institutional processes.

The Treasury has appointed Freshfields Bruckhaus Deringer partner Mark Austin as the independent chair of a new group that will make recommendations for improving the capital-raising process.

Austin said he would look at overseas markets such as Australia, where secondary raisings can be quicker and involve more retail investors.

Last year, investors allowed companies to raise up to 20 per cent of their share capital without first giving original shareholders a right of refusal, up from 10 per cent before Covid-19 hit. This was with a view to raising money rapidly, helping businesses survive the pandemic. Austin said this threshold would also be looked at in the review.

“We want to reform the capital raising process to make it cheaper, quicker and more easily involve existing shareholders, and especially more retail investors,” he said.

He will also look at whether the greater transparency around short selling that was introduced after the financial crisis has benefited the rights issue process.

The new review was one of the key recommendations of Lord Jonathan Hill, who was asked by the government to find ways to boost initial public offerings and fundraising on London’s stock markets.

The review will ask for perspectives from investors, advisers and companies about whether technology can be used to speed up the information flow to shareholders and help them exercise their rights. It will report to the government in spring next year.

Improving “the efficiency of secondary capital raisings by listed companies is an important element of making the UK an even more attractive place for businesses to list”, said Austin.

A number of other recommendations from the Hill review have already been implemented, including rule changes to boost the number of special purpose acquisition companies in London, blank cheque companies that buy businesses in a fast-tracked way to take them public.

>>> Europe : Brokers Upgrades & Downgrades - 12th of October 2021 V3(+)

>>> Up

* Alfa Financial Raised to Overweight at Barclays; PT 205 pence (+)

* ASML Raised to Buy at Banco Sabadell; PT 805 euros

* Avast Cut to Equal-Weight at Barclays (+)

* BEWi Raised to Buy at Nordea; PT 65 kroner (+)
* Industrivarden Raised to Hold at ABG; PT 290 kronor

* Interparfums Raised to Outperform at Oddo BHF; PT 63 euros (+)

* Fagron Raised to Buy at KBC Securities; PT 19.50 euros (+)

* Lancashire Raised to Add at Peel Hunt; PT 630 pence

* LVMH Raised to Buy at Banco Sabadell; PT 706 euros

* LSE Raised to Outperform at KBW; PT 8,700 pence

* Netcompany Raised to Buy at ABG; PT 775 kroner (+)

* Norway Royal Salmon Raised to Buy at Handelsbanken

* Orsted Raised to Buy at ABG; PT 1,025 kroner

* SocGen Raised to Buy at Banco Sabadell; PT 31.26 euros

* Sodexo Raised to Outperform at Bernstein; PT 94 euros

* Stemmer Imaging Raised to Buy at Berenberg; PT 42 euros

>>> Down

* Ahold Delhaize Cut to Neutral at Goldman; PT 30.50 euros

* Equinor Cut to Underweight at Morgan Stanley; PT 200 kroner

* Fevertree Drinks Cut to Hold at HSBC; PT 2,550 pence
* Mapfre Cut to Neutral at CaixaBank BPI; PT 1.95 euros

* Swedbank Cut to Sell at Goldman; PT 170 kronor

* TeamViewer Cut to Hold at Deutsche Bank; PT 16.50 euros

>>> Initiation

* EUTELSAT RATED NEW EQUAL-WEIGHT AT MORGAN STANLEY, PT EU14
* Infineon ADRs Rated New Buy at President Capital Management

* Metso Outotec Rated New Buy at Berenberg; PT 10.50 euros

* OKEA Rated New Buy at Arctic Securities; PT 31 kroner

* SES SA RATED NEW EQUAL-WEIGHT AT MORGAN STANLEY, PT EU9.5

* Vitesco Rated New Inline at Evercore ISI; PT 60 euros

* Weir Rated New Buy at Berenberg; PT 2,060 pence

>>> Call

* Ahold Delhaize Cut to Neutral at Goldman With Upside Now Limited

* Airbus Deliveries ‘Not Great’ But FY Target in Sight, Citi Says

* DSV 3Q Beat Bigger Than Expected, Says Citi; Watch Peer Kuehne (+)

* Givaudan 3Q Organic Sales Beat Masks a Miss in Fragrances: Citi (+)
* Lancashire Raised at Peel Hunt as Better Profit Absorbs Risks

* Lonza’s Extended Growth Outlook Ahead of Expectations: Jefferies (+)

* Outokumpu Higher 3Q Outlook Supports Acerinox, Aperam: Jefferies (+)

* Polymetal Rated New Hold at Deutsche Bank; PT 1,200 pence

* Sodexo’s Fortunes to Turn Around, Bernstein Says Time to Buy (+)

* TeamViewer Downgraded; Structural Trends Reversed: Deutsche Bank

* Weir, Metso Outotec Both Seen Undervalued and Buys at Berenberg

>>> Europe : Brokers Upgrades & Downgrades - 12th of October 2021 V2(+)