TheChek News Flow

Cette sulfureuse affaire qui déstabilise BPCE

Par Grégoire Pinson le 14.10.2020 à 10h00ABONNÉS

Laurent Mignon, directeur général de BPCE, tente de limiter les dégâts causés par la filiale de gestion d’actifs H20. Mais la banque et sa filiale Natixis sont de nouveau traversées de rumeurs et de doutes.

Cantonner le problème H2O : telle est la rude tâche à laquelle s'attelle Laurent Mignon, directeur général de BPCE (Banques Populaires – Caisses d'Epargne), avec sa filiale Natixis. Ce 13 octobre, une étape a été franchie, puisque H2O, détenue par Natixis, a pu rouvrir aux investisseurs ses fonds épinglés pendant l'été par l'Autorité des marchés financiers (AMF) en raison de leur manque de liquidité. Un comble pour une société qui s'est choisi un nom si fluide ! Quelque 10 milliards avaient en effet été bloqués le 28 août, puis passés au peigne fin. Objectif : séparer le bon grain de l'ivraie, c'est-à-dire d'une part les investissements des huit fonds incriminés qui s'avèrent présentables aux marchés ; et d'autre part les investissements qui, eux, ne trouveront pas preneur avant longtemps, ou à prix cassés.

"Un problème H2O a été soulevé ; il a été adressé", répètent en écho les porte-paroles de BPCE et Natixis. Ils soulignent que H2O n'est qu'une boutique de gestion d'actifs parmi les 23 que compte Natixis. Mais aussi que les fonds en question pèsent peu au regard des 900 milliards d'euros comptabilisés au total par Natixis dans la gestion d'actifs.

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Bets laid that earnings boosts for companies that rode lockdown best will fade faster than many anticipate

Some hedge funds are betting that the best days for the stock market’s coronavirus winners are in the past.

Shares linked to home computing and gym equipment, grocery retail and healthcare soared when the pandemic forced countries into lockdown earlier this year. Many were lifted by hopes that changing behaviour and shopping patterns as a result of Covid-19 would feed through into stronger, long-term earnings growth, even though some companies have until recently been unprofitable.

But some hedge fund managers are now betting against those stocks, in the belief that the boost to company earnings will fade away faster than many investors anticipate.

“We have begun shorting some of the Covid over-earners, companies where we feel the current trajectory of earnings is just not sustainable,” said Tim Campbell, co-founder and chief investment officer at hedge fund firm Longlead Capital Partners in Singapore, which manages A$300m ($215m) in assets.

Mr Campbell pointed to PC and laptop manufacturers whose growth had previously been flat or negative, but which had enjoyed “three fantastic quarters of growth” this year with employees and students working from home. “We think they will return to their pre-Covid growth rate at some point,” he added.

Some of the biggest risk-taking by hedge funds in recent weeks has been in the IT sector, driven by new short positions, according to a recent Goldman Sachs note to clients seen by the Financial Times.

But technology has not been the only hunting ground. Longlead’s Mr Campbell has also been looking for possible short ideas in companies producing as varied items as hand sanitiser, home gym equipment and fishing rods and reels. 

Investors have spent the pandemic hunting Covid winners and placing positive bets on their stocks, especially in the face of 2020’s strong market rebound. Short positions — borrowing a stock and selling it in the hope of buying it back later at a lower price — can lead to theoretically unlimited losses. Sceptics argue that determining the true value of such stocks is difficult in an environment of ultra-low borrowing costs and huge government and central bank stimulus that keeps equities supported even in a downturn.

Hedge funds have made gains from short positions in companies such as cinema chains, bricks-and-mortar retailers and airlines, betting their earnings would be hammered by lockdown restrictions. However, such bets have looked less attractive after sharp price falls, or after governments stepped in to provide support to companies — leading funds to look for other targets.

Andrew Sheets, chief cross asset strategist at Morgan Stanley, said the greatest risk of overpriced equities was in technology and related sectors.

“This year will be the peak year for working from home, so it will be the peak year for relative growth and earnings for companies that benefit from that,” he said.

“If we’re successful in getting a vaccine and the market thinks 2021 looks more normal, investors may think ‘let me sell companies where it’s as good as it gets now and buy companies with more cyclical earnings’.”

Another target for short sellers has been German meal-kit provider HelloFresh. The stock has been one of the standout winners during the pandemic, rising more than 150 per cent this year, driven by surging demand from consumers stuck at home during lockdown.

The company made a pre-tax loss in both 2018 and 2019, but posted a €172.1m profit in the first half of this year and said in August that it was seeing “exceptional” growth.

The value of bets against the company, as measured by stock borrowing, rose from less than €50m in late May to more than €170m in early October, having briefly risen above €230m in August, according to data group IHS Markit.

HelloFresh declined a request for comment.

Tiger Management, which holds the biggest short bet, took its position in late May, while Lone Pine Capital and Palestra Capital have put on positions more recently, taking disclosed short bets to near their highest on record, according to analysis by data provider Breakout Point.

And in healthcare, some funds have been taking on some of the US market’s most high-profile winners: vaccine companies whose shares have soared during the pandemic.

Barry Norris, chief investment officer at Argonaut Capital, has begun shorting stocks including Novavax, which is up about 2,900 per cent this year, as well as Moderna and Inovio Pharmaceuticals, both up more than 280 per cent. Overall hedge fund bets against Moderna, for instance, have been volatile this year, rising from less than 5 per cent of shares outstanding in May to more than 9 per cent in August, and are now at 6.7 per cent, according to IHS Markit.

Mr Norris said that vaccines were “highly experimental” and that, as the number of patients in trials rose, “there will inevitably be significant negative side-effects discovered”.

He added: “The bigger question is, given we know only a small proportion of the population is subject to symptomatic infection and an even smaller cohort mortality risk, whether the risks of mass vaccination relative to focusing on improving hospital treatment is really worth it.”

David Hockney on his Norman conquest

Two years ago, the British artist fell in love with a ramshackle house in Normandy. The pictures in a new Paris show are the result

Stock slides after indebted Chinese developer raises just over half its $1bn target

Shares in China Evergrande sank 17 per cent after the latest effort by the world's most indebted property developer to shore up its balance sheet fell flat.

China’s largest developer said in a filing on Wednesday that it raised $555m from a share placement priced at a discount of 14.7 per cent to the stock’s last close — far short of its target of just over $1bn.

Andy Maynard, a Hong Kong-based trader at China Renaissance, said the placement was “testament to negative sentiment for the stock and potentially the sector”, adding: “Most share placements, follow-ons, secondaries, IPOs have gone well [this year]”.

Evergrande said in the filing that the proceeds would be used for the “refinancing of existing indebtedness” as well as general working capital. It did not immediately respond to a request for further comment.

The share placement comes as the developer is struggling to reduce a debt pile of more than $120bn at a time when Chinese regulators have drafted new measures to curb leverage within the sector.

Market scrutiny of Evergrande has also increased in recent weeks after a letter circulated on Chinese social media in late September, purporting to show the company petitioning the government in Guangdong, where it is based, for help to stave off a potential cash crunch.

The document purportedly sought aid in securing regulatory approval to list its mainland subsidiary. A failure to proceed with the listing by January would enable investors to ask for their investments back, an amount totalling about Rmb130bn ($19bn).

The company furiously denied the letter, which it said was fabricated, and subsequently announced it had struck a deal with a majority of the investors that they would not ask for repayment.

But the weak reception for the share placement has triggered renewed volatility in Evergrande’s shares, which are down 26 per cent this year following Wednesday’s tumble.

The company’s US dollar bonds maturing in 2025 were trading at 77.6 cents on the dollar on Wednesday, edging down 0.6 per cent from 78 cents.

In March, Evergrande unveiled a plan to reduce debt by Rmb150bn ($22.3bn) annually to 2022. Between March and September, it said it reduced its total indebtedness by Rmb53.4bn.

The company is considering other steps to raise cash, include spinning off its property management business, recently valued at about $11bn. Hong Kong’s stock exchange approved the proposed spin-off last month.

China’s heavily indebted property developers, in which foreign entities hold huge volumes of outstanding debt, have been in the spotlight following the coronavirus pandemic. House prices in the country have risen sharply in recent months as the country’s economic rebound has accelerated.

Last month Evergrande discounted its new properties in China by 30 per cent, but said that was “normal sales strategy” during the peak buying season in the country.

Credit Suisse, UBS, BofA Securities and Huatai International were joint bookrunners for the share placement.

* Culti Milano Raised to Outperform at EnVent S.p.A.

* Glaxo Raised to Buy at Intron Health; PT 1,700 pence

* Go-Ahead Raised to Buy at HSBC; PT 775 pence

* Hapag-Lloyd Raised to Overweight at JPMorgan; PT 62.80 euros

* IHG LN PT Raised to 5,000 pence at Deutsche Bank

* Landis + Gyr Raised to Neutral at JPMorgan; PT 50 Swiss francs

* Sartorius Raised to Hold at LBBW; PT 385 euros

* SKF Raised to Equal-Weight at Barclays; PT 190 kronor

* Stagecoach Raised to Buy at HSBC; PT 60 pence

* Standard Life Aberdeen Raised to Buy at HSBC; PT 300 pence

* Telenet Raised to Buy at Berenberg; PT 40.30 euros

>>> Down

* Accor Cut to Hold at Deutsche Bank; PT 27 euros

* DSV Panalpina Cut to Neutral at JPMorgan; PT 989.80 kroner

* FirstGroup Cut to Hold at HSBC; PT 60 pence

* Intrum Cut to Hold at ABG; PT 253 kronor

* Melia Hotels Cut to Sell at Deutsche Bank; PT 3.10 euros

* Proximus Cut to Underweight at Barclays; PT 17 euros

* Repsol Cut to Hold at HSBC; PT 7.10 euros

* VST Building Technologies Cut to Accumulate at SRC Research

* Wartsila Cut to Neutral at Goldman; PT 6.90 euros

>>> Initiation

* Campari Rated New Buy at SocGen; PT 10.80 euros

* Engie Resumed Hold at Deutsche Bank; PT 13 euros

* Erste Reinstated Equal-Weight at Morgan Stanley; PT 25 euros

* Hochtief Reinstated Hold at MainFirst; PT 81 euros

* Kooth Rated New Buy at Panmure Gordon; PT 290 pence

* RBI Reinstated Equal-Weight at Morgan Stanley; PT 15.30 euros

* Reckitt Reinstated Underperform at Bernstein; PT 6,800 pence

>>> Call

* Bayer’s Odds for Successful Appeal ‘Improved’, Susquehanna Says

* Bawag Is Preferred Pick Among Austrian Banks: Morgan Stanley

* Melia Hotels Cut to Sell at Deutsche Bank; PT 3.10 euros

* Telenet Capex Worries Overdone, Berenberg Says, Upgrading to Buy

* *UK PHARMA & BIOTECH SECTOR CUT TO NEUTRAL AT CITI

Nikkei +0.13% Hang Seng -0.12% CSI -0.78% Shanghai -0.69% Shenzen -0.68%

Eur$ 1.1746 CNH 6.7334 CNY 6.7385 JPY 105.45 GBP 1.2918 CHF 0.9150 RUB 77.2070 WTI$ 40.09 -0.32%

S&P +0.21% EuroStoxx +0.15% FTSE +0.40% Dax +0.17% SMI -0.

Macro :

- U.K. Labour Calls For Short National Lockdown to Slow Virus

- London’s Wealthy Are Paying Top Dollar for City’s Mega-Mansions

- France’s Le Drian: No Deal Brexit Looks Likely at This Point

Keep an eye on :

- ASML NA : ASML Sees 4Q Net Sales EU3.6 Bln to EU3.8 Bln, Est. EU3.72 Bln

- AMAST SS : Amasten Makes Public Takeover Offer to SSM Shareholders

- ATL IM : Atlantia Ready to Discuss Sale of Its 88% of Autostrade to CDP

- BOOM LN : Audioboom Has Agreed to Sell 10% Stake to Singapore Investor:Sky

- BARC LN : Barclays Hires M&A Banker Gauthier Le Milon from BNP Paribas

- BAYN GY : Bayer Expects EPA Approval for Dicamba Soon in Herbicide Battle

- BOSN SW : Bossard Sees Full Year Sales CHF780 Mln to CHF800 Mln

- 1COV GY : Covestro to Offer Up to EU450m Shares to Trade On Oct. 16, Prices 10.2m Shares at EU43.85/Share

- DNP GY : Dermapharm Holder Themis Beteiligungs-AG to Offer 5.38m Shrs

- EDPR PL : EDPR Says It Agrees to Sell Energy From Solar Projects in Ohio

- GSK LN : GSK Split Should Unlock Significant Value, Intron Raises to Buy

- NK FP : Magris Resources to Buy Imerys’ N. America Talc Assets for $223m

- KESKOB FH : Kesko Sept. Sales From Continuing Operations EU927.8 Mln

- MMB FP : Bernard Arnault continue de monter au capital de Lagardère

- MB IM : Adviser ISS Backs Mediobanca’s List of Board Candidates: Sole

- MCOVB SS : Medicover 3Q Prelim. Rev €262.5M, Est. €240.5M

- MCPHY FP : McPhy to Offer Shares via Bryan Garnier & Company, McPhy Offering Prices at EU23.50/Share

- MCPHY FP : New Strategic Partnerships & Simultaneous Launch of Anticipated € 150m Capital Increase

- NRS NO : Norway Royal Salmon, Midt-Norsk Havbruk Hold Merger Talks

- OR FP : L’Oreal Set to Name Hieronimus New CEO, Le Figaro Reports

- SALM NO : Icelandic Salmon Primary Offering Increased to About NOK500m

- SAS SS : SAS Drops Amid Rights Issue That DI Reports Investors Avoiding

- SKFB SS : Demand for Green Transport Powers Growth at Bearings Giant SKF

- TKWY NA : Just Eat Takeaway 3Q Orders Rose 46% as Dealmaking Drives Growth

- TES FP : Tessi to Sell Most of Its Spanish Business to Servinform

- TOM2 NA : TomTom 3Q Location Technology Revenue Beats Estimates (1)

- UCG IM : UniCredit Names Padoan to Board as Chairman Designate

- VOWG GY : VW Crushed the Iconic Beetle to Make Room for This Little SUV