FT : EU prosecutors investigate alleged frauds worth €4.5bn

EU prosecutors investigate alleged frauds worth €4.5bn
Luxembourg-based office aims to bring first indictment by year-end

Billion-euro sleuthing
Since its creation on June 1, the European Public Prosecutor’s office has opened 300 investigations with an estimated €4.5bn at stake, according to EPPO spokesperson Tine Hollevoet. “It’s quite an important sum,” she said.

Unlike the EU’s antifraud office, Olaf, the EPPO has the power to lead its own investigations and prosecute cases in 22 of the bloc’s countries. Poland, Hungary, Sweden, Denmark and Ireland do not participate in the project (though Sweden is expected to join next year).

Hollevoet said prosecutors aim to bring their first indictment by the end of the year, meaning that the first cases brought by EPPO prosecutors could be tried in national courts next year.

Some of these cases are ongoing investigations handed over by national authorities when EPPO started its activity, where the cross-border dimension and the EU money targeted gave the Luxembourg-based office the power to investigate. But quite a lot are new cases, including based on tips coming from the public, the EPPO said.

In one case in the Czech Republic, three people and three companies are under suspicion of defrauding the EU by filing fake invoices for alleged scientific projects subsidised by the bloc. The main suspect, a Czech national who is in police custody, is accused of setting up a complex web of offshore companies which he used to create fictitious offers and tenders to draw several million euros in EU grants from 2011 until this year. Czech authorities have frozen his bank accounts and seized his assets, which include more than a thousand model trains.

In total, authorities have seized assets worth €10m in the 300 cases EPPO is investigating.

In a separate case, concerning alleged cross-border VAT fraud worth €14m, police have raided the premises of businesses in Germany, the Netherlands, Slovakia, Bulgaria and Hungary. Hungarian suspects can be investigated and brought to court in a different country if the case is cross-border.

For now, none of the cases are related to the bloc’s €800bn post-pandemic borrowing programme known as Next Generation EU. “It’s too early still, money has just started flowing and contracts still have to be awarded,” Hollevoet said.

As for internal matters, EU chief prosecutor Laura Kovesi has returned €3.5m to the European Commission, as it was earmarked for non-staff expenditure. “We still need 120 staff — case officers, financial investigators — and she doesn’t want to spend the money on office plants,” her spokeswoman said.

>>> What to look at today - 14th of September 2021

Most Asian stocks were steady Tuesday while U.S. and European futures climbed ahead of inflation data that could color expectations about the Federal Reserve’s likely timeline for paring stimulus. Crude oil gained.
The energy sector was the top performer in MSCI Inc.’s Asia-Pacific index amid the oil rally. Japan’s Nikkei 225 Stock Average was set for its highest close since 1990. Hong Kong and China wavered as traders evaluated the troubles of China Evergrande Group, Beijing’s regulatory curbs and a virus flareup.
U.S. equity futures rose after the S&P 500 snapped a five-day drop. Treasury yields and the dollar were steady. The focus is firmly on price pressures, with a gauge of commodities at a decade-high and a report later Tuesday expected to show a fourth month of U.S. inflation at 5% or more.
Indebted developer Evergrande, one of the biggest financial worries in China, said it hired advisers to explore solutions for its cash crunch. The company is facing mounting protests by home-buyers, retail investors and even employees as it struggles to meet its obligations.
US After Hours Summary: ORCL -1.3% ticks lower on earnings; INTU +2.3% higher on deal to acquire Mailchimp; HLF -8.8% falls on guidance

Nikkei +0,62% Hang Seng -0,05% CSI -0,29% Shanghai +0,05% Shenzen +0,73%

Eur$ 1.1812 CNH 6.4450 CNY 6.4472 JPY 110.08 GBP 1.3840 CHF 0.9219 RUB 72.6558 TRY 8.4340 WTI$ 70.97 +0.74% Gold 1,793 -0.05% BTC 45,250 +63 ETH 3,290

S&P +0,17% Nasdaq +0,13% EuroStoxx +0,24% FTSE +0,06% Dax +0,23% SMI

Macro :
- JPMorgan’s Kolanovic Says Time to Cut Tech in Reopening Revival
- Hedge Funds End Most Persistent Short Tech Streak Since 2008
- SpotOn Raises $300M in Series E Funding Led by Andreessen
- Most Stock Investors See at Least 5% Correction By Year-End: DB
- Bitcoin Could Double ETF Revenue in Five Years to $20 Billion
- Evergrande Market-Contagion Risk Seen as Manageable: China Today

Keep an eye on :
- ALLFG NA : Allfunds $1b Share Sale by Holders Order Book Is Covered: Terms
- AGAS NO : Hemen Makes Mandatory Offer for Avance Gas at NOK43 Per Share
- AAPL US : It May Take More Than a New iPhone to Ease Pressure on Apple
- BDEV LN : Strong Demand Helps Barratt, Peers' Plans for Help-to-Buy Ending
- CAP FP : Oracle Falls After Sales Miss Estimates on Cloud App Growth
- CNHI IM : CNH Industrial Names Francesco Tanzi Iveco CFO
- DANSKE DC : Danske Bank Foreign Ownership Falls to a Third of Total: Borsen
- DLG IM : De Longhi to Sell 4% of Capital, De’ Longhi Share Sale by Holders Order Book Is Covered: Terms
- DWNI GY : Vonovia Waives All Offer Conditions in Bid for Deutsche Wohnen
- DEZ GY : Deutz Boosts FY Revenue Forecast
- EBS AV : Erste Primes Warchest as Rate Crunch Pressures East Europe Banks
- KAPE LN : Kape Technologies Proposed $936m Purchase of Expressvpn
- DNUT US : Krispy Kreme Holder JAB Holdings Bought 1.78m Shares
- NESTE FH : Kinder Morgan Partners With Neste for Renewable Fuel Hub
- NOKIA FH : Nokia to Resume Work With O-RAN Alliance After Rule Changes
- PLT NO : PoLight Offering of 1.14m Shares Prices via Pareto Securities
- SAP GY : Oracle Falls After Sales Miss Estimates on Cloud App Growth
- SHL GY : Siemens Healthineers Plans to Raise Medium-Term Goals: HB
- SMS LN : Smart Metering to Raise GBP175m Via a Placing
- SW FP : Sodexo Buys Majority Stake in Wedoogift: Statement
- SQ US : Square Joins Cryptocurrency Non-Aggression Pact on Patent Suits
- SSE LN : Elliott Is Said to Push for Breakup of British Power Firm SSE
- SNH GY : Steinhoff Offers 370m Pepkor Shrs via Goldman, Investec
- 7203 JP : Toyota Objects to ‘Exorbitant’ Tax Breaks for Rich in EV Plan
- VNE US : Veoneer Confirms Receiving Offer From Qualcomm for $37/Shr Cash
- VG US : Vonage Is Said to Work With Advisers on Review, Possible Sale
- FHZN SW : Zurich Airport Aug. Passengers 1.59M Vs. 725,337 Y/y

>>> Europe : Brokers Upgrades & Downgrades - 14th of September 2021

>>> Up
* Aker BP Raised to Buy at DNB Markets; PT 285 kroner
* Hapag-Lloyd Raised to Buy at Deutsche Bank; PT 265 euros
* Kuehne + Nagel Raised to Buy at Deutsche Bank
* Maersk Raised to Buy at Deutsche Bank; PT 23,500 kroner
* Telia Raised to Neutral at Citi; PT 37 kronor

>>> Down
* BHP Group PLC Cut to Equal-Weight at Barclays; PT 2,000 pence
* Cairn Energy Cut to Hold at Investec; PT 210 pence
* Carlsberg Cut to Sell at Berenberg; PT 883 kroner
* Delivery Hero Cut to Neutral at Oddo BHF; PT 135 euros
* IAG Cut to Neutral at Exane; PT 170 pence
* Kering Cut to Reduce at AlphaValue/Baader
* LVMH Cut to Reduce at AlphaValue/Baader
* Tecnicas Reunidas Cut to Neutral at JPMorgan; PT 9.50 euros

>>> Initiation
* 2020 Bulkers Rated New Buy at HC Wainwright; PT 181 kroner
* Fluidra Maintained Hold at Grupo Santander
* OEM International Rated New Buy at SEB Equities; PT 201 kronor
* Tethys Oil Rated Buy at Pareto Securities

>>> Call
* Carlsberg Double-Downgraded at Berenberg on ‘Inflation Storm’
* Inditex Upgraded Amid Strong Fashion Recovery: Jefferies
* ITM Power Cut to Sell at Berenberg as Risks Playing Out
* Telia Raised to Neutral at Citi on Better Market Conditions (1)

WSJ : Uranium Stocks Jump as Reddit’s WallStreetBets Goes Nuclear

Uranium Stocks Jump as Reddit’s WallStreetBets Goes Nuclear
Investors count on demand for the nuclear fuel to rise amid shift toward less carbon-intensive energy sources

Shares of uranium mining companies surged Monday as retail traders from Reddit’s WallStreetBets forum focused their energies on the rallying radioactive metal.

Companies tied to uranium in Australia and the U.K. powered higher Monday, while shares of U.S.-listed companies also rose.

Sydney-listed uranium miners Peninsula Energy Ltd. , Energy Resources of Australia Ltd. and Bannerman Energy Ltd. all closed more than 25% higher. U.K.-listed miner Aura Energy Ltd. jumped more than 35% and London-listed Yellow Cake PLC, a company that acts as an exchange-traded fund for uranium, rose 13%.

Meanwhile, Canada’s Cameco Corp. has become the third-most-discussed company on WallStreetBets, after tech giants Apple Inc. and Alibaba Group Holding Ltd., according to SwaggyStocks, a website that tracks mentions of ticker symbols on the forum

New York-traded shares of the uranium miner surged in premarket trading before ending the day up 0.1%. Uranium Royalty Corp. shares surged 24%.

Recent posts on WallStreetBets, the message board at the heart of the meme-stock frenzy earlier this year, have put forward bullish arguments in favor of uranium prices and related mining stocks, complete with the forum’s typical mix of memes and humor.

One post on the site last week pondered whether there was “A GME Like Opportunity In Uranium?,” using the ticker symbol for GameStop Corp. , the original meme stock.

The WallStreetBets activity follows a sharp price rise for the physical metal used largely to fuel nuclear power plants. New York-traded uranium futures have surged roughly 40% in the past month to $42.40 a pound, their highest level in about seven years.

Huge purchases of the metal by the Sprott Physical Uranium Trust, a newly created fund that gives investors direct exposure to the metal, have been a significant driver of the rally and have helped to tighten an already tight market, said Andre Liebenberg, chief executive of Yellow Cake.

The fund, which trades on the Toronto Stock Exchange, has amassed almost 25 million pounds of the metal since it was first launched in July and bought 850,000 pounds on one day alone last week, according to Sprott. The total mined supply of uranium was roughly 120 million pounds in 2019, according to the World Nuclear Association.

Investors are also betting that demand for the metal will rise amid a global shift toward less carbon-intensive sources of energy. Governments including the U.S. and China have pushed for a role for nuclear power in global efforts to mitigate climate change, helping to broaden the appeal of uranium among investors, said Mr. Liebenberg.

“The uranium market is quite niche and small but the interest I have seen from generalist investors has been much broader than I used to see in the past,” said Mr. Liebenberg.

A page on Reddit called UraniumSqueeze has attracted more than 13,000 members since it was created in February. It describes itself as “dedicated to all the investors and traders passionate about the uranium market.”

FT : Chip shortage drags on as plant closures hit carmakers

Chip shortage drags on as plant closures hit carmakers
Semiconductor manufacturers struggle to get on top of backlog of orders

Every day Laurent Valy hopes his phone will bleep, alerting him to a text message that says his colleagues can go back to work.

He heads a union representing 600 car workers at a Peugeot factory in Rennes, north-west France, closed because of semiconductor shortages that have slashed vehicle production and shut plants around the world.

“There are colleagues who are struggling with the situation psychologically and who are vulnerable,” said the CFDT union organiser at the Brittany plant, adding that workers lose a sixth of their pay while they are at home.

For Valy and other car workers, the news last Friday that Toyota, the world’s biggest carmaker, had cut annual production forecasts will have come as a further blow, signalling the chip crisis is far from over.

With a cascade of factory closures across Europe, North America and Asia, the shortages are likely to continue well into next year.

The pandemic and natural disasters in the US and Asia have left chip manufacturers struggling to get on top of an order backlog, with deliveries not helped by disruptions in global shipping and the supply chain.

Estimates of the likely hit to car production because of the shortages have shot up in recent days.

Data provider AutoForecast Solutions forecast 9.5m vehicles could be lost because of the crisis in its latest survey, nearly 1m higher than a prediction only a week earlier.


The situation is most stark in Asia, where AFS calculates that 3.4m could be trimmed from production by the start of 2022.

An even bigger worry for carmakers is that the trend could become permanent as manufacturers, which make semiconductors for a range of vehicle components, drastically cut production of the chips that auto groups tend to use as they give priority to more lucrative tech and telecoms contracts.

Car groups have already been pushed to the back of the queue by the tech and telecoms companies, which need more advanced and expensive chips that make semiconductor companies more money.

Even Toyota, which has typically avoided the problems because of its ties with suppliers and its large inventories, has started to feel the pinch.

It was forced to cut its annual output target by 3 per cent on Friday because of factory shutdowns in Malaysia, which make chips for brake systems, and Vietnam, which manufactures semiconductors for wire harnesses used in cars. 

Teruaki Nakatsuka, chief executive of Nissan parts supplier Jatco, told the Financial Times the industry had been caught off guard by the extensive reach of chip parts that are scattered across an increasingly electrified automotive supply chain.

“There are components at every level even in places that you would least expect. I think there was not enough spotlight on the fragility of the supply chain, including the concentration of the semiconductor industry in Malaysia.”

There has been no reprieve for factory workers in the US, either. Ford and General Motors have cut shifts at multiple factories across the country for up to two weeks in August and September, including ones that make large, profitable pick-up trucks.


This meant big falls in sales, with Ford reporting a 33 per cent drop in August compared with a year earlier.

However, so far the car groups have managed to weather the crisis relatively well as they raised prices and gave priority to the manufacture of higher-margin models to keep the profits rolling in.

In Europe, Stellantis, Ford, Volkswagen and Nissan all posted stronger than expected results over the summer and increased full-year forecasts. Profit margins have been about 10 per cent in the first half of the year, up nearly 5 per cent on normal times.

Some carmakers have even shaved costs to boost profits by shipping cars without all their advertised features.

Stellantis, which was formed from the merger of Peugeot owner PSA and Fiat Chrysler at the start of the year, has also reassured investors that it expects to see a clear improvement by winter.

Referring to the Rennes factory closure, it said the crisis was affecting the “whole automotive world” and that it had been adapting activity at its plants since the beginning of the pandemic.

Daimler, VW and BMW said they believed supply would begin to normalise in 2022.

But some warn carmakers may be about to hit a rockier period.

Philippe Houchois, an analyst at Jefferies, said they were reaching the “end of the goldilocks period” as they have little room left to manoeuvre on pricing, making them vulnerable to further cuts to car production.

Seiichi Nagatsuka, vice-chair of Japan Automobile Manufacturers Association, said uncertainty surrounding the bottlenecks in chip supplies would persist.

“It is difficult to foresee the impact of the Covid-19 resurgence beyond autumn,” he said. 

To Valy, sitting outside the closed plant in Rennes, carmakers have to accept some of the blame for not adequately anticipating structural changes in the market — but they are not the only ones who have been negligent. 

“Where has the state been?” he asked. “Just like with paracetamol [which is mainly produced in Asia], we should have realised earlier that our semiconductors are made in Asia and that poses a problem of sovereignty.”

>>> US After Hours Summary: ORCL -1.3% ticks lower on earnings; INTU +2.3% highe

After Hours Summary: ORCL -1.3% ticks lower on earnings; INTU +2.3% higher on deal to acquire Mailchimp; HLF -8.8% falls on guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SBRA +0.9% (reaffirms guidance, also to expand relationship with Recovery Centers of America, provides business update)

Companies trading higher in after hours in reaction to news: KERN +22.4% (to acquire 365 Cannabis in a $17 mln deal), NRXP +8.5% (IQV to collaborate with NRXP on potential medical support for novel COVID-19 treatment), AVNT +4.8% (expects double-digit revenue in its composite solutions), ANGI +2.9% (report monthly metrics for August), INTU +2.3% (to acquire Mailchimp for approx. $12 bln in cash and stock), SENS +1.8% (announces collaboration with the University Hospitals), VMEO +1.2% (provides metrics for August; subscribers increased 15% yr/yr), INCY +1.1% (Ruxolitinib Cream data accepted for presentation at EADV), RWT +1% (increases dividend), MNR +0.3% (reinitiates exploration of strategic alternatives), VIAC +0.2% (announces leadership changes at Paramount Pictures), LUV +0.2% (announces leadership changes), LMT +0.2% (awarded Navy contracts valued at $2.0 bln and $410 mln), MGA +0.2% (VNE is evaluating a non-binding $37/sh acquisition proposal from QCOM), GLDD +0.1% (announces receipt of several major dredging awards totaling $261.3 mln), T +0.1% (FOXA acquires TMZ platform and properties from AT&T's (T) WarnerMedia, according to Reuters), VNE +0.1% (VNE is evaluating a non-binding $37/sh acquisition proposal from QCOM), FMC +0.1% (announces favorable ruling in patent infringement case)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: HLF -8.8% (issues downside revenue guidance for Q3 and FY21), AVO -3.4%, ORCL -1.3%

Companies trading lower in after hours in reaction to news: JAMF -5.6% (announces private placement of $325 mln in convertible notes), PAR -5.1% (stock offering and convertible notes offering), BRP -4.4% (to acquire Jacobson, Goldfarb & Scott), OPEN -4.1% (stock offering), MP -3.6% (stock offering), SNPS -2.8% (names new COO), RENN -1% (names new CFO), REGI -0.6% (provides update on renewable diesel plant in Louisiana following Hurricane Ida), QCOM -0.3% (VNE is evaluating a non-binding $37/sh acquisition proposal from QCOM), FOXA -0.2% (FOXA acquires TMZ platform and properties from AT&T's (T) WarnerMedia, according to Reuters), DBRG -0.1% (partners with ImpactData to help build colocation data centers for colleges and universities), IVZ -0.1% (reports August AUM), AB -0.1% (reports August AUM)

>>> US Close Dow +0,76% S&P +0,23% Nasdaq -0,07% Russell +0,59%

Closing Stock Market Summary

The S&P 500 snapped a five-session losing streak on Monday with a 0.2% gain, although it closed well off session highs. The Nasdaq Composite decreased 0.1%, while the Dow Jones Industrial Average (+0.8%) and Russell 2000 (+0.6%) outperformed amid strength in energy and financial stocks. 

Shortly after the open, the S&P 500 was up as much as 0.8% amid gains across all 11 sectors (the Nasdaq was up 0.7%). The positive start was attributed to buy-the-dip efforts and some positive-minded analyst coverage on the mega-cap stocks. 

The benchmark index softened up on no specific news catalyst and traded sideways for most of the day, until a modest bump into the close. Eight of the 11 S&P 500 sectors ended the session in positive territory, led by energy (+2.9%) and financials (+1.1%) with 3% and 1% gains, respectively. 

Energy stocks outpaced the rise in WTI crude futures, which settled above $70 per barrel ($70.47/bbl, +0.72, +1.0%). Bank stocks showed strength despite some minor curve-flattening activity. The 10-yr yield decreased two basis points to 1.32% while the 2-yr yield was unchanged at 0.21%. The U.S. Dollar Index increased 0.1% to 92.64.

The health care sector (-0.6%) was today's laggard as investors digested a report published in The Lancet about COVID-19 booster shots. Briefly, a group of international scientists said current evidence doesn't appear to show a need for the general population to receive a booster. 

Shares of Pfizer (PFE 44.58, 1.01, -2.2%) fell 2.2% while shares of Moderna (MRNA 419.72, -29.66, -6.6%) fell 6.6%. 

Highlighting today's notable analyst recommendations, Goldman Sachs initiated coverage on Amazon.com (AMZN 3457.17, -11.98, -0.4%), Alphabet (GOOG 2869.30, +20.88, +1.1%), and Facebook (FB 376.51, -2.18, -0.6%) with Buy ratings. Only Alphabet keyed off the recommendation, though.

Nike (NKE 159.52, -4.07, -2.5%) was downgraded to Neutral from Buy at BTIG due to challenging supply dynamics. On a related note, 3M (MMM 185.23, +0.68, +0.4%) said inflation has been higher than previously thought in the third quarter and that raw material costs are its biggest supply issue. 

Reviewing Monday's economic data:

  • The Treasury Budget for August showed a $170.64 bln deficit in August, versus a $200.01 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the August deficit cannot be compared to the July deficit of $302.05 bln. August marked the 23rd consecutive month that the Treasury has seen a budget deficit.
    • The fiscal year-to-date budget deficit is $2.71 trln versus a deficit of $3.01 trln for the same period a year ago.

Looking ahead, investors will receive the Consumer Price Index for August and the NFIB Small Business Optimism Survey for August on Tuesday. 

  • S&P 500 +19.0% YTD
  • Nasdaq Composite +17.2% YTD
  • Dow Jones Industrial Average +13.9% YTD
  • Russell 2000 +13.5% YTD