>>> Europe : Brokers Upgrades & Downgrades - 15th of June 2021

>>> Up
* Air Liquide Raised to Buy at HSBC; PT 166 euros
* Dufry Raised to Outperform at Oddo BHF; PT 80 Swiss francs~
* Future PLC PT Raised to 3,321 pence at Deutsche Bank
* InPost Raised to Buy at HSBC; PT 21 euros

>>> Down
* Anglo American Cut to Sector Perform at RBC; PT 3,400 pence
* Castellum Cut to Sell at Handelsbanken; PT 215 kronor
* CCC Cut to Hold at HSBC; PT 125 zloty
* Fastighets AB Trianon Cut to Hold at Handelsbanken
* John Laing Group Cut to Hold at HSBC; PT 403 pence
* K2a Knaust & Andersson Fastigheter Cut to Hold at ABG
* Kungsleden Cut to Hold at Handelsbanken; PT 120 kronor
* Pagegroup Cut to Underweight at Morgan Stanley; PT 545 pence
* Pandox Cut to Hold at Handelsbanken; PT 180 kronor
* Platzer Cut to Hold at Handelsbanken; PT 140 kronor

>>> Initiation
* Adler Group Rated New Overweight at JPMorgan; PT 32 euros
* ITM Power Rated New Sector Perform at RBC; PT 310 pence
* Nel Rated New Outperform at RBC; PT 27 kroner
* TCS Group GDRs Reinstated Buy at Goldman; PT $94

>>> Call
* Anglo American Ripe for Some Profit-Taking, RBC Cuts Rating
* ConocoPhillips, EOG Among Potential Shell Permian Buyers: RBC
* Glaxo Needs to Provide Confidence on Pipeline, Analysts Say
* Pagegroup Cut at Morgan Stanley on Valuation After Outperforming
* Valuations of Some Swedish Real Estate Stocks Now a Risk: SHB

>>> What to look at today - 15th of June 2021

Asian stocks traded mixed Tuesday after their U.S. peers closed at a record and a bond rally stalled ahead of a key Federal Reserve meeting. Commodities retreated.
Japanese shares gained, while Australian stocks outperformed after a holiday. Chinese equities declined on concerns about liquidity and as metals prices slid led by copper. U.S. futures edged higher after gains in technology shares pushed the S&P 500 to a record Monday. Still, three stocks fell for every one that rose. The 10-year Treasury yield pulled back under 1.5%, while the dollar was steady.
Bitcoin continued to gyrate amid a barrage of comments, briefly climbingabove $41,000 only to pull back. The digital currency got a boost after veteran hedge fund manager Paul Tudor Jones re-endorsed the coin in a television interview.
US After Hours No notable earnings today; several fall on offerings: PDSB -21.1%, PTGX -6.2%, PING -6.1%, CCCC -4.9%, VRM -4.6%

Nikkei +1% Hang Seng -0.70% CSI -1.00% Shanghai -0.72% Shenzen -0.62%

Eur$ 1.2125 CNH 6.4035 CNY 6.4046 JPY 110.08 GBP 1.4114 CHF 0.8994 RUB 72.0299 TRY 8.4695 WTI$ 71.07 +0.27% Gold 1,865.27 -0.05% BTC 40,350 +150 ETH 2590 +11

S&P +0.19% Nasdaq +0.14% EuroStoxx +0.41% FTSE +0.25% Dax +0.37% SMI +0.37%

Macro :
- EU, U.S. Must Remove Trade Tariffs as Quickly as Possible: Maas
- EU Set to Lift Travel Curbs for U.S. Residents This Week
- Goldman Expands in Crypto Trading With Plans for Ether Options
- Uranium Stocks Drop on Report of China Power Plant Leak
- GOP Senators Tell SEC to Reject New Climate Disclosures
- Land Rover Tests Defender SUV Prototype With Hydrogen Fuel-Cell

Spacs :
- Goldman SPAC Said in Talks on $2.5 Billion Deal for Mirion Tech
- SEC Gets a New Leader for Unit That Reviews SPACS, Climate Rules
- Lordstown Motors Slumps Most Ever on CEO Exit, Errant Statements

Keep an eye on :
- A2A IM : A2A: LGH Minority Shareholders Accepted Prelim Merger Proposal
_ BMPS IM : ECB Seeks Details on Monte Paschi EU2.5B Cap Hike Timing: Ansa
- BNP FP : BNP Paribas and Virtu Matchit ATS Post Biggest OTC Volume Gains
- DECB BB : Sofina Cuts Deceuninck Holding to 4.97% as of June 8
- DLG LN : Direct Line Completes First GBP50m Tranche of Buyback Program
- DNB NO : DNB Bank Has Acceptances for 81% of Sbanken Shares
- EDF FP : EDF Flags Fuel Issue at Chinese Nuclear Plant Near Hong Kongni
- EQNR NO : Equinor to Raise Quarterly Cash Div to 18c/Share, Plans Buyback
- GALP PL : Galp Won’t Invest in Rovuma Until Security Guaranteed: Rtrs
- GLJ GY : Grenke: Chair Antje Leminsky Resigns, Michael Bücker to Succeed
- KESKOB FH : Kesko Sees FY Comp Oper Profit EU650m-EU750m, Saw EU570m-EU670m
- LGEN LN : Legal & General to Divest From Insurer AIG Over Climate Policies
- LEON SW : Leonteq Sees Record Profits for 1H, Capital Base of ~CHF800m
- LHA GY : Lufthansa Mandates Banks for Possible Capital Increase
- EGL PL : Mota-Engil, Partner Win $357m Mining Contract in Mali
- PRX NA : Tencent Investor Prosus Puts Further $257 Million in Edtech Firm
- SHOT SS : Scandic Hotels Sees Occupancy Rate of at Least 35% in June
- SIGNB SS : Signatur Fastigheter Offers Up to 5.9m Shares
- SUN SW : Sulzer Boosts FY Revenue Forecast
- TLW LN : Tullow, Partners to Invest $4.2b in Ghana Over 10 Yrs.: Citi FM
- UBSG SW : $1 Billion Ex-UBS Team Goes Independent With LPL, Gladstone -- Barrons.com
- VIV FP : Third Point Said to Have Vivendi Stake Amid Ackman UMG Deal

FT : Hedge funds expect to hold 7 per cent of assets in crypto within 5 years

Hedge funds expect to hold 7 per cent of assets in crypto within 5 years
Forecast could equate to about $312bn in digital currencies across the industry, survey finds

Hedge funds plan to significantly increase their exposure to cryptocurrencies by 2026, a new survey shows, in a major vote of confidence for digital assets after recent large price falls and plans for punitive new capital rules.

A survey of 100 hedge fund chief financial officers globally, conducted by fund administrator Intertrust, found that executives expect to hold an average of 7.2 per cent of their assets in cryptocurrencies in five years’ time.

If replicated across the sector, that could equate to a total of about $312bn of assets in cryptos, based on data group Preqin’s forecast for the total size of the hedge fund industry, Intertrust estimated. Seventeen per cent of respondents expected to have more than 10 per cent in crypto.

This would represent a large increase in appetite among hedge funds. Current holdings in the sector are unclear, but a number of big-name managers have already committed small amounts to crypto assets, attracted by soaring prices and market inefficiencies that they can arbitrage.

Man Group trades bitcoin futures in its computer-driven AHL unit, while Renaissance Technologies last year said its flagship Medallion fund could invest in bitcoin futures. Hedge fund manager Paul Tudor Jones has bought into Bitcoin, while Brevan Howard has been shifting a small portion of funds into crypto and its co-founder, billionaire Alan Howard, is a major backer of the industry.

Bitcoin is the largest contributor to gains this year at US fund firm SkyBridge Capital, set up by former White House communications director Anthony Scaramucci, which started buying it late last year and then trimmed its holding going into April — just before the price of the token fell.

Hedge funds “are well aware not only of the risks but also the long-term potential” of cryptos, said David Miller, executive director at Quilter Cheviot Investment Management.

The growing enthusiasm shown by hedge funds stands in sharp contrast to widespread scepticism among more traditional asset managers, many of whom remain concerned about cryptocurrencies’ huge volatility and uncertainty over how they will be regulated.

“For the moment, crypto investments remain limited to clients that have a high risk tolerance and, even then, investments are typically a low proportion of investable assets,” Morgan Stanley and Oliver Wyman, the consultancy, said in a recent report on asset management.

Some hedge funds remain wary. Paul Singer’s Elliott Management wrote to investors earlier this year that cryptocurrencies could possibly become “the greatest financial scam in history” in a letter seen by the Financial Times.

Cryptos have experienced a wild ride again this year. Bitcoin soared from less than $29,000 at the end of last year to more than $63,000 in April, but has since fallen back to just over $40,000.

While the future regulation of cryptos remains unclear, last week the Basel Committee on Banking Supervision said they should carry the toughest bank capital rules of any asset.

Intertrust’s survey, whose respondents include CFOs globally of funds that on average manage $7.2bn in assets, also showed that all the executives surveyed in North America, Europe and the UK expect to have at least 1 per cent of their portfolio in crypto.

North American funds expect to have exposure of 10.6 per cent on average, while those in the UK and Europe expect 6.8 per cent on average.

WSJ : Bitcoin on the Balance Sheet Is an Accounting Headache for Tesla, Others

Bitcoin on the Balance Sheet Is an Accounting Headache for Tesla, Others
Tesla and other companies that hold the notoriously volatile cryptocurrency often must record impairment charges when its value falls

Elon Musk reignited his curious Twitter relationship with bitcoin on Sunday, giving the cryptocurrency a small boost.

More pertinent to Tesla Inc. shareholders, however, is the hit to the company’s bottom line this quarter from Mr. Musk’s sometimes hot, sometimes cool attitude toward bitcoin.

Mr. Musk is widely blamed by investors for starting the digital currency’s most punishing slide of the year after announcing on Twitter that Tesla would stop accepting bitcoin as payment for its electric vehicles. He added fuel to the fire earlier this month, tweeting breakup memes with “#bitcoin” and a broken-heart emoji. Bitcoin had slumped 30% since the original May 12 tweet.

On Sunday, Mr. Musk said Tesla would resume bitcoin transactions when miners increase use of renewable energy sources.

The price jumped about 8% from its Friday 5 p.m. EDT level to trade at about $39,816 Monday. He also said that Tesla had sold only about 10% of its bitcoin holdings earlier this year to confirm that the cryptocurrency “could be liquidated easily without moving market.”

Tesla had about $1.3 billion in bitcoin parked in its treasury at the end of the first quarter and announced the bitcoin purchase in February to “diversify and maximize returns on our cash.”

Software developer MicroStrategy Inc. and a handful of other companies, including payment app provider Square Inc., have made similar investments. Some have touted bitcoin as a store of value, or a more modern version of gold.

But companies holding bitcoin in their treasuries face an accounting risk: Because bitcoin and other digital assets are considered “indefinite-lived intangible assets,” rather than currencies, any decrease in their value below what the company paid for them—even a temporary one—can force a company to write down the value and take an impairment charge.


Such assets must be tested for impairment at least annually, or if the price falls below the company’s carrying value. The volatile nature of bitcoin makes quarterly revaluations routine. Once the company takes the charge, that resets the fair value of the asset. Conversely, if the price has gone up, the company can’t record a gain. It can do that only when it sells the asset.

Tesla, which didn’t respond to a request for comment, is projected to post a profit of 96 cents a share in the second quarter, according to analysts polled by FactSet.

Bitcoin’s volatility, combined with this accounting treatment, makes it hard for corporate officers to manage crypto holdings as cash, which makes it less useful as a reserve asset, said Jennifer Stevens, an accounting professor at Ohio University.

“The accounting is a little bit incongruous with the underlying purpose,” she said.

Few other companies have been eager to jump into bitcoin. A February survey from research firm Gartner found only 5% of chief financial officers questioned planned to hold bitcoin as a corporate asset this year. Of the finance chiefs surveyed, 84% said they never planned to hold it.

Tesla initially disclosed a $1.5 billion investment in bitcoin on Feb. 8 but didn’t specify how many bitcoins it held or the average price it paid. The change to its investment policy, however, was made in January, and the price of bitcoin averaged about $35,400 between Jan. 1 and Feb. 8, according to data from CoinDesk.

That means Tesla likely held around 37,000 bitcoins after slightly trimming its position in the first quarter.

As of Monday afternoon, bitcoin hovered just below $40,000, although it dropped as low as $30,202 last month.

Tesla will likely take an impairment charge on its bitcoin holdings this quarter, said Wedbush Securities analyst Dan Ives.

He added that the company was likely buying across January and at least some of those holdings are now being held at a loss.

“If bitcoin is below $30,000, or in the low $30,000s [at the end of the second quarter], the impairment would have to be large,” he said. It could end up being similar in size to the $101 million gain Tesla posted for the first quarter on the sale of some of its holdings, he said.

“It went from a tailwind to a real headwind,” he said.

Tesla’s results in recent periods have been propped up by one-time gains. In addition to the gain on the bitcoin sale in the first quarter, the company recorded a $518 million gain on the sale of regulatory credits to other auto makers to help them meet emissions mandates.

That pushed the company into the black for the period—Tesla posted net income of $438 million, or 93 cents a share.

Tesla wouldn’t be the first company to take a big charge on its bitcoin holdings.

MicroStrategy, which sells business software and holds about 92,000 bitcoins valued at more than $3 billion, already has posted quarterly losses because of this accounting treatment, both in last year’s third quarter and this year’s first.

Last week, it said it expects to take a charge of at least $285 million on its bitcoin investment in the current period, which will push it to another quarterly loss.

For now, MicroStrategy is just accepting the accounting practice, Chief Executive Michael Saylor said in an interview. He said he sees bitcoin as a better value than the dollar and has made buying and holding it as much of a company priority as software sales.

“This looks risky to a person who doesn’t understand bitcoin,” he said, “but it is by far the least risky way to grow the company.”

The company’s bitcoin strategy has made Mr. Saylor a hero in cryptocurrency circles but has also made MicroStrategy’s stock as volatile as bitcoin. The shares were trading at $135 last August when the company announced its new bitcoin strategy. They skyrocketed to a record $1,273 by September but have been falling since then, closing Monday at $598.49.

It is harder to determine how much Tesla’s stock price has been affected by its bitcoin strategy since it is a far smaller part of the company’s holdings, but the stock has been falling since the February announcement. It closed at $617.69 Monday.

>>> US After Hours Summary: No notable earnings today; several fall on offerings

After Hours Summary: No notable earnings today; several fall on offerings: PDSB -21.1%, PTGX -6.2%, PING -6.1%, CCCC -4.9%, VRM -4.6%

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: RAPT +19.7% (extends momentum from +116% move on Monday; also commences $125 mln stock offering), LEU +6.2% (US Nuclear Regulatory Commission approves license amendment request to produce HALEU), FUSN +6.1% (announces preliminary data from FPI-1434 Phase 1 study), CMRE +4% (acquires 16 dry bulk vessels), CLLS +3% (announces four new product candidates under pre-clinical development; also announces .HEAL, its genome surgery platform), BRP +2.4% (to acquire RogersGray), RC +2% (increases dividend), POLY +1.1% (names new COO), TROW +0.7% (declares special cash dividend of $3.00/sh), SAVE +0.7% (provides upbeat Q2 guidance and operational trends; leisure demand has continued to improve throughout Q2), RIG +0.7% (files mixed securities shelf offering), CSCO +0.6% (awarded $1.2 bln Defense Informations Systems Agency contract), FDX +0.3% (increases dividend), MSTR +0.3% (stock offering), NVAX +0.1% (reports "positive results" from first study of influenza vaccine and COVID-19 vaccine candidate administrated at same time)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: None

Companies trading lower in after hours in reaction to news: PDSB -21.1% (stock offering), PTGX -6.2% (stock offering), PING -6.1% (stock offering), CCCC -4.9% (stock offering), VRM -4.6% (convertible notes offering), EARN -4% (commences offering of 575,000 shares; also files for 2.675 mln offering by selling shareholder), ARE -3.9% (stock offering), CBRL -2.6% (convertible notes offering), ABR -2.3% (stock offering), NEP -2% (convertible notes offering), BIIB -0.5% (Phase 3 STAR study did not meet primary or key secondary endpoints), HEAR -0.3% (enters two new market segments with Recon Controller and Velocityone Flight simulation control system)

FT : EDF seeks data review on report of possible China radiation leak

EDF seeks data review on report of possible China radiation leak
French utility group calls for board meeting as Chinese partner says reactors are operating normally

EDF, the French state-backed utility, said it was seeking to hold an extraordinary board meeting of its joint venture nuclear power plant in southern China after a report of a possible radiation leak.

In a statement on Monday, EDF said it had been “informed of the increase in the concentration of certain noble gases” in the first reactor at Taishan Nuclear Power Plant, which is majority held by China General Nuclear Power Corp. Noble gases are inert gases, such as helium, xenon and radon.

It added that such increases were “a known phenomenon, studied and provided for in reactor operating procedures” but said it was calling for the extraordinary board meeting to review all available data.

In a statement posted on its website on Sunday night, the Taishan Nuclear Power Plant said its two reactors were operating normally. “The [plant’s] environmental indicators and its surroundings are normal,” the plant said.

It added that the plant’s second reactor had recently completed a scheduled overhaul and had been reconnected to the electricity grid on June 10.

Taishan is 70 per cent owned by CGN, with the remainder held by EDF. It is the first nuclear plant in the world to operate a European Pressurised Reactor — a Franco-German technology that had been haunted by delays and cost overruns for two decades.

The Taishan plant’s first reactor began commercial operations in December 2018, with its second reactor coming on stream in September 2019.

Taishan, population 1m, is about 75km west of the Pearl River Delta, the most densely populated part of southern Guangdong province. Hong Kong is about 140km from the power plant.

CGN and EDF are also collaborating on an EPR nuclear plant in the UK, which is under construction at Hinkley Point in Somerset.

Citing unidentified sources and documents, CNN reported on Monday that EDF unit Framatome had recently informed the US government of a potential “imminent radiological threat to the site and to the public”.

“Framatome is supporting resolution of a performance issue with the Taishan Nuclear Power Plant,” Framatome said in a statement on Monday, adding that “according to the data available, the plant is operating within the safety parameters”.

The French government is following the situation, according to officials.

CNN said President Joe Biden’s National Security Council was monitoring the situation but did not yet think that a “crisis level” had been reached.

CGN declined to comment. The Taishan municipal government and China’s National Nuclear Safety Administration were not immediately available for comment on Monday, a Chinese public holiday.

Nuclear power is central to President Xi Jinping’s ambitious environmental goals, which include achieving net zero carbon dioxide emissions by 2060.

There are about 50 nuclear reactors operating in China, accounting for about 5 per cent of total power generation.

>>> US Gapping down

Gapping down

Select metals and mining related names showing early weakness:

  • GFI -2.2%, AG -2.1%, GDX -1.5%, GLD -1.2%, GOLD -1.2%, NEM -1.2%, IAG -0.8%, SLV -0.7%

Other news

  • ATXI -48.9% (receives FDA Complete Response Letter for IV Tramadol)
  • RIDE -11.8% (announced several changes to its executive mgmt team as company transitions out of R&D phase and into commercial production; also responds to Hindenburg report)
  • NKLA -1.9% (entered into a purchase agreement and a registration rights agreement with Tumim Stone Capital on June 11 - Tumim has committed to purchase up to $300 million of common stock)
  • HTBX -1% (files for 403,025 share common stock offering related to warrants

Analyst comments:

  • RACE -3.4% (double-downgraded to Sell from Buy at Goldman)
  • PGRE -1% (downgraded to Underperform from In-line at Evercore ISI)
  • CRH -0.8% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
  • KMI -0.6% (downgraded to Sell from Neutral at Goldman)
  • DEO -0.5% (downgraded to Mkt Perform from Outperform at Bernstein)