After Hours Summary: Pretty quiet after hours; Solar stocks in focus as US may block some products, according to Bloomberg; SCS +5.8% higher on earnings while KBH -3.8% falls on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SCS +5.8%, WOR +0.4%, FUL +0.1%
Companies trading higher in after hours in reaction to news: DHX +27.6% (announces additional $12 mln authorization under share buyback program), AGTC +14.1% (to host call on June 24 to discuss Achromatopsia 12-month data), RCUS +9.8% (Phase 2 ARC-7 study with domvanalimab-based combinations showed encouraging clinical activity), FSP +6.3% (authorizes the repurchase of up to $50 mln), FSLR +1.5% (US to block some solar goods made in Xinjiang region, according to Bloomberg), CSIQ +1.2% (US to block some solar goods made in Xinjiang region, according to Bloomberg), PACB +1.1% (announces collaboration for whole genome sequencing), BIIB +0.6% (Biogen and Eisai receive FDA Breakthrough Therapy designation for lecanemab), MPW +0.3% (MPW to acquire five hospitals from THC for $900 mln), TAN +0.2% (US to block some solar goods made in Xinjiang region, according to Bloomberg), CE +0.1% (acquries certain technology assets from Grupa Azoty)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: KBH -3.8%, CNXC -0.2%
Companies trading lower in after hours in reaction to news: PRTG -23.3% (files for $200 mln mixed securities shelf offering), DQ -9.4% (US to block some solar goods made in Xinjiang region, according to Bloomberg), TALO -6.3% (stock offering), BNL -3% (commences 10 mln share offering; files mixed securities shelf offering; also provides an update on its recent business activities), JKS -2.2% (US to block some solar goods made in Xinjiang region, according to Bloomberg), HIW -1.6% (sells property), DX -0.1% (files $750 mln mixed shelf offering), IPI -0.1% (announces increase to potash and Trio pricing), QTWO -0.1% (announces collaboration with NYDIG to offer integrated Bitcoin solutions)
Berlin under fire over attempt to interfere with Wirecard inquiry
Finance ministry official asked BaFin vice-president to provide potential questions which he wanted to pass to MPs
Germany’s finance ministry has come under fire over an attempt to secretly interfere with the questioning of a key witness during a parliamentary inquiry into Wirecard, a potential breach of parliamentary etiquette.
The collapse of the once-highflying German payments company last summer sent shockwaves through Germany’s financial and political elite. An excruciating parliamentary inquiry has exposed multiple regulatory failures and led to the departure of the heads of three supervisory agencies.
Days ahead of Friday’s final parliamentary debate on the committee’s final report, the finance ministry disclosed that one of its senior officials tried to intervene in the inquiry’s work in the run-up to the questioning of Munich chief prosecutor Hildegard Bäumler-Hösl, a key witness.
The government revealed this in a written answer to a question raised by Fabio De Masi, an MP for the hard-left Die Linke party, which was seen by the Financial Times.
The ministerial official was not named, but can be identified by the description of his role, as Reinhard Wolpers, the head of the subdivision financial market stability. Wolpers is one of three finance ministry employees who are members of BaFin’s administrative council. The finance ministry declined to comment on his identity.
In the run-up to the questioning of Bäumler-Hösl in January, Wolpers approached BaFin’s then-vice president, Elisabeth Roegele, and asked her to provide questions for Bäumler-Hösl which he then would pass on to MPs.
The government has no constitutional role in the inquiry, which is being pursued by parliament and has powers akin to a court. Moreover, Roegele was also nominated as a witness and had not yet been questioned by MPs at that point. She was forced out of her job by the government alongside President Felix Hufeld in late January.
“Wolpers’ behaviour is a clear violation of rules,” De Masi told the Financial Times, adding that the government official showed a “lack of respect for the Bundestag”.
BaFin and Munich prosecutors are embroiled in a blame game over the controversial 2019 short selling ban which investors regarded as a vote of confidence in the disgraced company. BaFin imposed the ban after receiving information from Munich prosecutors about an allegedly imminent short selling attack against Wirecard.
Several BaFin employees told MPs that Munich prosecutors had stated that the information was highly credible. Bäumler-Hösl denied that and said she just passed it on to BaFin without commenting about its validity.
The short selling ban is potentially toxic for German finance minister Olaf Scholz, who is the Social Democrats’ candidate for chancellor in September’s federal election.
The finance ministry scolded the watchdog publicly for the short selling ban, saying it was based on poor and insufficient analysis.
The ministry’s response to De Masi disclosed that Wolpers approached Roegele via email and text messages days ahead of Bäumler-Hösl’s testimony. The ministry said Wolpers “acted upon his own, personal initiative and did not co-ordinate with other employees of the finance ministry”. It added that the executive level “at no point” was informed about the behaviour but only became aware of the matter because of De Masi’s inquiry.
“The communication of [our] employee with Ms Roegele was eventually without a result, as Ms Roegele did not submit such suggestions for questions,” the ministry said, adding that “no information” was passed on to members of the inquiry committee from the ministry.
Lisa Paus, a Green MP, said that the “authority of the finance ministry” was misused for the political interest of the Social Democrats. “That’s an absolute no-go.”
Florian Toncar, an MP for the pro-business Free Democrats, said that it would be “very surprising” if Wolpers’ actions were “not approved or even requested by the ministry’s senior level”.
Jens Zimmermann, the SPD’s frontman on the inquiry, said he was unable to comment on internal procedures at the ministry “as I don’t have any insights [into them]”, adding that his only contact was with the ministry’s official representatives in the committee. “I did not receive any suggestions for potential questions to Ms Bäumler-Hösl,” Zimmermann said.
Wolpers and Roegele did not respond to FT requests for comment. Munich prosecutors declined to comment.
Pent-up demand sends homebuyers looking for a piece of Ibiza
Properties are selling fast in the Balearic resort but UK nationals face a hurdle with a new permit requirement
Earlier this year, while waiting to complete on a home purchase in Ibiza, UK-based buyers David and his wife received an unwelcome surprise. Since the end of the Brexit transition period in January, British buyers have been required to secure a military permit for homes in most rural and coastal locations on the island, thanks to a General Franco-era rule that designated much of Ibiza of strategic military importance.
“We had never heard of [the permit rule]. The delay caused us to miss the deadline agreed with the seller,” says David, who did not want to give his real name. The couple had to add another 10 per cent — roughly €90,000 — to their deposit to reassure the seller. The permit-approval process, which included checks in the UK, took four months.
Spain’s lockdown closed the Ibiza property market between March and June last year and travel restrictions and quarantine requirements curtailed foreign buyer activity significantly following that. This year, thanks to pent-up demand, Engel & Völkers has sold roughly 50 per cent more homes by value compared with the same period in 2019, according to Florian Fischer, who runs the company’s Ibiza business.
As the competition for homes increases, the permit requirement, which applies to all buyers except residents of the EU or Schengen area countries, is placing many at a disadvantage. Ignacio Rodríguez, a lawyer for PwC in Palma, Mallorca, says he saw roughly 20 deals in Ibiza for homes priced between €1m and €8m fall through for this reason, and the same number in Mallorca.
Sales requiring mortgage finance are particularly at risk since banks will not approve a mortgage until the permit has been obtained, he says. “The industry was caught unaware. Many local notaries didn’t know about the permit requirement.”
Meanwhile, buyers are returning to Ibiza. Those from the Spanish mainland, German-speaking countries and the Netherlands are particularly active and the time between viewing and sales is shorter than before the pandemic, according to Fischer.
Traditionally, buyers would make two visits to the island, returning to favoured homes for a second viewing before making an offer. Today, many buy on their first visit, wary of travel bans preventing a return, or losing out to other keener buyers.
Since the pandemic, much of the demand has been for larger, higher-value homes. The average price of a home sold by E&V last year was up 29 per cent on the year before.
New buyers and existing owners are using their homes for longer. Alain Heinz, 53, from Luxembourg, typically spends six weeks at his villa in the north of the island in Benirrás. Last year he stayed there between May and October.
Foreign buyers seeking large family homes have a range to choose from — both original fincas and new constructions — across the island. In Ibiza’s centre, the area around Santa Gertrudis de Fruitera is popular thanks to its proximity to the Morna International College, which follows the English curriculum.
In the north, popular villages include San Lorenzo, San Juan and Benirrás, while in the south, demand has increased for gated communities such as Roca LLisa, near the Golf Ibiza golf course, and Vista Alegre near Es Cubells. Ibiza living can be relatively discreet by super-rich standards, with most of the finest estates and smartest villas hidden from view down long untarmacked roads.
Morna International College has received record numbers of inquiries in recent months as families seeking safe remote working relocate from primary homes mainly in the UK, the Netherlands and the Spanish mainland, according to Julie Anne Harwood, the school’s business manager.
The gains made up for sharp falls in pupil numbers last spring when many families with tourism-related businesses realised they would be unable to pay the fees, and others with homes abroad returned for safety. “Few of the children of local business owners have come back,” says Harwood, noting Ibiza’s summer tourist season still hangs in the balance thanks to travel restrictions.
The exodus caused a flood of rental homes to come to market, triggering a welcome fall in rental prices. Donovan Garnett runs a Facebook page with 43,000 members, matching landlords with those seeking rooms in houses and apartments in Ibiza. In typical years, renters outnumber adverts on the page by 10 or 20 to one, he says. Over the winter there were more homes on offer than renters. Rents fell on average between 10 and 20 per cent.
“You had two or three couples sharing apartments who have each been able to move out and find small studio apartments,” he says, adding that local families who had to rent out rooms to cover their own rental costs no longer need to. Rents have now returned close to pre-pandemic levels, he says, but with most rental contracts in Spain effectively binding for five years, many local workers have seen lasting improvements.
Short-term rental income in the peak summer months is an important source of revenue for many owners in Ibiza, including Heinz. He typically rents his home — a coastal detached house with five bedrooms, a pool and a gym — during July and August. Even after agents’ costs of between 15 per cent and 20 per cent, it provides a considerable income, he says.
Toni Guasch provides maintenance services to 20 high-end villas across Ibiza, which earn their owners between €4,000 and €20,000 weekly during the peak summer season of July and August.
“A lot of this year’s bookings are rolled over from last year,” he says. He predicts occupancy of roughly 80 per cent this summer but says that travel restrictions remain a threat. Typically, owners use revenue to meet the considerable running costs on homes for the rest of the year, he says.
Elsewhere, Ibiza’s economy is desperate for a summer season untroubled by travel restrictions. “All moorings for July and August are now reserved,” says Isabel Teruel from the company that operates Botafoc Ibiza, one of several marinas in Ibiza Town.
Excepting a short period in June and July, revenues from sales of fuel and mooring fees following the pandemic were well down on last year, with the surrounding restaurants and shops also severely impacted, Teruel says.
But many of the bookings this summer are for boats with UK owners, who may well cancel or postpone without a change to the current requirement to quarantine for 10 days upon their return from the Balearic Islands. “One has the feeling that nothing is for sure these days,” she says.
Meanwhile, buyers requiring a military permit to complete a home purchase remain nervous, too. They may be tempted by local companies offering to fast track the process in four to six weeks. But the rules giving the military up to four months to complete the process mean such claims cannot be trusted, says Rodríguez. “I don’t believe they can speed up the process. The application must go to Barcelona or Madrid, and wait for a signature by a military officer.”
Regardless of where you come from, purchasing a rural home on Ibiza requires careful research. In most cases, additions and extensions are likely to have been made to original buildings, and often permissions have not been obtained. Nearly every detached home in Ibiza will have some small addition that has not received the required permits, with porches, pools, garages and basements the most common, says Rodríguez.
In case illegal additions are detected by authorities, he advises buyers of a €5m home to budget between €50,000 and €150,000 in fines and demolition costs. “But the emotional damage may be much greater if you have fallen in love with a property because of the pool and the porch and you then have to demolish it.”
Gapping down
In reaction to earnings/guidance:
- PDCO -10.9%
Other news:
- GMTX -29.3% (reports initial data from Phase 2a study of GEM103)
- EYES -16.9% (prices offering of 10 mln shares of common stock at $5.00 per share)
- BTAI -11.3% (stock offering)
- OSW -9.9% (announces proposed secondary public offering of common shares)
- BSY -4.5% ($500 mln convertible notes offering)
- KROS -3.2% (reports preliminary results from Phase 2 trial for KER-050)
- WSC -2.7% (stock offering)
- SOLO -1.9% (files for $750 mln mixed securities shelf offering)
- GLPG -1.8% (CSO to depart; also retains all guidance for FY21 news flow)
- SMED -1% (files for $35 mln mixed securities shelf offering)
Analyst comments:
- SDC -2.2% (downgraded to Hold from Buy at Loop Capital)
- RPM -2.1% (downgraded to Underweight from Neutral at JP Morgan)
- CVNA -1.9% (downgraded to Neutral from Overweight at JP Morgan)
- PLUG -1.8% (downgraded to Hold from Buy at Canaccord Genuity)
- BWXT -1.3% (downgraded to Neutral from Outperform at Credit Suisse)
- HMY -1.3% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
Gapping up
In reaction to earnings/guidance:
- WGO +0.6%
Other news:
- TLSA +10% (enters collaboration with FHI clinical to conduct a Phase 2 clinical trial for treating hospitalized severe COVID-19 patients with intranasal Foralumab)
- LOOP +8.9% (entered into ~$56.5 mln Securities Purchase Agreement with SK global chemical Co)
- CDR +4.4% (closes on sale of shopping ctr for $89.7 mln)
- GSK +4% (provides long-term targets for investor update; GSK aims to deliver sales of more than £33 bln by 2031)
- VBIV +3.9% (VBI Vaccines and Brii Biosciences reports completed Phase 1b/2a study on BRII-179)
- PEI +3.8% (Pennsylvania R.E.I.T. highlighted several factors contributing to its optimism about the recovery of its communities)
- CFMS +3.6% (receives exclusive distribution agreement in China)
- SCR +3% (Canada passes bill to allow for single-game wagering)
- NKLA +2.8% (to invest $50 mln in Wabash Valley Resources)
- BGNE +2.1% (receives NMPA approval for Tislelizumab)
- BTBT +2% (Wise Gain Inv discloses 12.28% stake)
- HOLX +1.9% (receives CE Mark for molecular assay to quantify human cytomegalovirus)
- SHAK +1.8% (to open 10 new Shacks in territories in China by 2031)
- CLNE +1.7% (forces conversion of BP's Class B Units into Class A Units relating to joint venture)
- VAL +1.4% (wins contract with North Oil Company offshore Qatar)
- ARWR +1.3% (resented positive interim results from AROHSD1001)
- NTNX +1.2% (names new board chair)
- AZN +1.2% (HUTCHMED and AstraZeneca's (AZN) Orpathys receives approval China)
- DHC +1% (files mixed securities shelf offering)
- MGA +1% (MGA discloses 7.4% stake in FSR related to vested warrants)
- KBR +1% (won a follow-on $58.1 million task order to provide sustainment engineering services for U.S. Air Force systems) .
Analyst comments:
- TH +7.2% (upgraded to Outperform from Perform at Oppenheimer)
- PTEN +2.4% (upgraded to Outperform from In-line at Evercore ISI)
- ACN +2% (upgraded to Outperform from Neutral at Exane BNP Paribas)
- KGC +2% (upgraded to Outperform from Neutral at Credit Suisse)
- URI +1.6% (upgraded to Buy from Neutral at Citigroup)
- PH +1.3% (upgraded to Overweight from Sector Weight at KeyBanc Capital Markets)
Early premarket gappers
- Gapping up:
- TLSA +11.7%, SCR +11.2%, LOOP +10%, CDR +4.4%, BTBT +4%, NKLA +3.9%, BGNE +2.1%, HOLX +1.9%, GSK +1.7%, FSR +1.6%, BIIB +1.4%, VAL +1.4%, TEVA +1.3%, INFO +1.2%, CLNE +1.1%, AZN +1.1%, DHC +1%, MGA +1%, KBR +1%, DMTK +0.8%, DKNG +0.7%, SHAK +0.7%
- Gapping down:
- GMTX -29.4%, EYES -17.3%, BTAI -8.5%, KROS -3.2%, WSC -1.8%, GLPG -1.3%, SMED -1%, SOLO -1%, BSY -0.9%