>>> Europe : Brokers Upgrades & Downgrades - 17th of June 2020

>>> Up
* Glanbia PT Raised to 12.50 euros at Morgan Stanley
* JM Raised to Hold at Handelsbanken; PT 220 kronor
* Pandora Raised to Buy at HSBC; PT 480 kroner
* Prosus Raised to Buy at HSBC; PT 93 euros
* Recordati Raised to Buy at Goldman; PT 51.80 euros
* RWE Raised to Buy at HSBC; PT 37 euros
* Titan Cement International Raised to Neutral at Exane
* UCB Raised to Reduce at AlphaValue
* WPP Raised to Buy at Goldman; PT 800 pence

>>> Down
* BNP Paribas Cut to Sell at SocGen; PT 30 euros
* Continental AG Cut to Hold at LBBW; PT 90 euros
* Demant Cut to Hold at Berenberg; PT 190 kroner
* Lindt & Spruengli Cut to Sell at MainFirst
* Pharma Mar Cut to Neutral at JB Capital Markets; PT 8.10 euros
* Neste Cut to Hold at Handelsbanken; PT 36 euros
* Software AG Cut to Add at Baader Helvea; PT 36.50 euros

>>> Initiation
* AB InBev Rated New Hold at Renaissance Capital
* Kingspan Rated New Buy at SocGen; PT 63 euros
* Rockwool Rated New Sell at SocGen; PT 1,500 kroner
* Ubisoft Rated New Buy at Stifel; PT 80 euros

>>> Call
* Demant Now Priced More Fairly After Share Rally: Berenberg
* Hugo Boss New CEO’s Distant Arrival Is Not Great for Stock: Citi
* Short Covering Can Push Up Europe, U.K. Equities, JPMorgan Says
* RWE Top Pick in Utilities on Renewables Potential: Berenberg
* Software AG Upside Now More Limited, Cut to Add: Baader Helvea

>>> What to look at today - 17th of June 2020

Asian stocks drifted Wednesday with European and U.S. equity futures as investors weighed encouraging signs on policy stimulus against worrying increases in coronavirus cases.
Earlier gains in the dollar petered out, while Treasuries showed a modest rise. Shares in Japan slipped, with benchmark indexes flat in South Korea, Hong Kong and China. The won slid as tensions with North Korea escalated. Crude oil gave up some recent gains. S&P 500 futures were steady after the index rose Tuesday following data showing a rebound in U.S. retail sales for May.
US After Hours ORCL -3.8% down on earnings but GRPN +4.2% is an earnings mover; travel stocks are weak after hours, especially cruise lines

Nikkei -0.58% Hang Seng -0.15% CSI -0.29% Shanghai -0.17% Shenzen -0.17%

Eur$ 1.1275 CNH 7.0836 CNY 7.0919 JPY 107.22 GBP 1.2556 CHF 0.9500 RUB 69.6412 WTI$ 37.43 -2.48%

S&P -0.15% Nasdaq -0.12% EuroStoxx -0.37% FTSE -0.17% Dax -0.30% SMI

Macro :
- France’s Le Drian Says No Deal Brexit Can’t Be Excluded
- Fed’s Harker Says U.S. Won’t Return to Pre-Virus Economy in 2021
- Short Covering Can Push Up Europe, U.K. Equities, JPMorgan Says

Keep an eye on :
- ABI BB : Molson Coors Hires Bank for Likely European Sale: Dealreporter
- ADS GY : Some Adidas Staff Ask Board to Investigate HR Chief
- AZA IM : Italy Set to Launch New Company to Run Alitalia: Messaggero
- ASAI SS : Artificial Solutions International Offering Prices
- AZN LN : AstraZeneca CEO Says Vaccine Likely Effective For a Year: Rtrs
- ATL IM : Italy’s Antitrust Starts Probe on Autostrade
- ATL IM : Italy Govt. to Conclude Autostrade Issue by End-June: Stampa
- POST AV : Austrian Post to Boost Stake in Aras Kargo to 80% From 25%
- BA SU : Senate Panel Adds Father of Max Crash Victim to Wed. Hearing
- BOO LN : Boohoo to Report Purchase of Oasis, Warehouse Brands: Sky
- COLR BB : Colruyt Full Year Retail Comp Sales +1.4% Vs. +2.20% Y/y
- DHER GY : Delivery Hero to Restore Just Eat Takeaway.com Holding to 10.6%
- JB7 GY : Deutsche Industrie Offering Prices 2.73m Shares at EU20/Share
- DTE GY : Deutsche Telekom Sees High Costs in Case of Huawei Ban: HBT
- ERICB SS : Ericsson Sees No Pandemic Disruption in North America: DI
- FER SM : Ferrovial’s Dividend at Risk on Heathrow’s Woes, Citi Says
- GALP PL : Galp Says It Has Restarted Production at Its Sines Refinery
- BOSS GY : Hugo Boss Names Daniel Grieder as New CEO Starting June 2021
- IVACC SS : Intervacc Offering Prices 6.54m Shares at SEK22.50/Share
- IPN FP : Ipsen: FDA Approves Fast Track For Liposodomal Irinotecan
- IQ US : Tencent Eyes Stake in Video Service IQiyi, Reuters Says (1)
- KER FP : Kering: Emma Watson, Tidjane Thiam, Jean Liu Join Board
- LHA GY : Lufthansa Shareholder Thiele Increases Stake to 15%: FAZ
- NAS NO : Norwegian Air to Reopen 76 Routes, Add 12 Aircraft to Operations
- METSO FH : Valmet Buys Shares in Future Neles at EU8/Shr or EU179M Total
- NEXI IM : Nexi, SIA Advisers Working on Valuations for Possible M&A: Sole
- NOVN SW : FDA Grants Approval of Ilaris to Novartis Pharmaceuticals
- PNDORA DC : Pandora Has Reopened 60% of Stores Globally: Jyllands-Posten
- PNL NA : PostNL Forecasts Normalized Ebit
- 1913 HK : -3.78%
- RDSA LN : Shell, IBM Team up to Accelerate Digitalization in Mining Sector
- RBREW DC : Royal Unibrew Sees Full Year Ebit DKK1.25 Bln to DKK1.38 Bln
- SAP GY : Oracle Expects Flat Sales on Fewer Corporate Software Deals --> -3.8% in after hours
- SBBB SS : SBB Targets 15% Annual Profit Growth in New Financial Goals
- LIGHT NA : Signify Jumps 8.5% After UV-C Light Source Zaps Covid-19 Virus
- SLDZ FH : Solidium Oy: Solidium Divests Its Future Neles Stake to Valmet
- SF SS : Stillfront Offering Prices 1.56m Shares at SEK770/Share
- SNI NO : Stolt-Nielsen Issues NOK1.25b Senior Unsecured 3 Year Bond
- SQN SW : Swissquote Sees 1H Pretax Profit >CHF56m vs. CHF25.1m in 1H ‘19
- TELIA SS : Telia Confirms Talks on Selling Turkcell Stake For About $530m
- METN SW : V-Zug Shares to Be Traded on SIX Exchange From June 25
- WMH LN : William Hill to Place Up to 20% of Shares to Finance Growth
- WDI GY : Wirecard urges UK High Court to dismiss fraud lawsuit, German payments group is accused of wrongdoing in €326m acquisition of a company sold for €36m - FT - https://on.ft.com/3d8su48

>>> US After Hours Summary: ORCL -3.8% down on earnings but GRPN +

After Hours Summary: ORCL -3.8% down on earnings but GRPN +4.2% is an earnings mover; travel stocks are weak after hours, especially cruise lines

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: GRPN +4.2%

Companies trading higher in after hours in reaction to news: FLGT +11.8% (receives EUA from FDA to provide at-home testing services for SARS-CoV-2), AMRN +5.2% (announces settlement with Apotex), CHGG +2.4% (authorizes repurchase of $500 mln of stock and/or convertible notes), KGC +1.4% (files for $1 bln mixed securities shelf offering), ARI +1.3% (lowers dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: GAN -5.8%, ORCL -3.8%, HRB -0.1%

Companies trading lower in after hours in reaction to news: NCLH -11.6% (extends suspension of certain voyages through Sep 30), CCL -7.6% (down in sympathy with NCLH), CUK -7.0% (down in sympathy with NCLH), RCL -7.0% (down in sympathy with NCLH), PRVB -6.3% (commences public offering of 5.5 mln shares), DKNG -6.3% (files for 14 mln share offering plus 19 mln share offering by selling shareholders), LUV -2% (announces plans to keep middle seats open through at least Sep 30), IR -1.8% (offering of 12.1 mln shares by selling stockholder), NSTG -1.2% (announces new products to be used for COVID-19 research)

Travel Stocks are Lower:

  • Airlines / Boeing down on LUV's plan to keep middle seats open through at least Sep 30, see 17:38 comment: SAVE -4.6%, UAL -3.5%, DAL -3.2%, ALK -3.2%, AAL -3.1%, BA -2.5%, LUV -2.3%, JBLU -2.2%
  • Cruise lines lower on NCLH announcing it will extend suspensions of certain voyages through Sep 30, see 16:36 comment: NCLH -11.6%, CCL -7.6%, RCL -7.0%, CUK -7.0%

FT : Wirecard urges UK High Court to dismiss fraud lawsuit

Wirecard urges UK High Court to dismiss fraud lawsuit
German payments group is accused of wrongdoing in €326m acquisition of a company sold for €36m

Wirecard has asked the High Court in London to dismiss a civil suit in which the German payments specialist is accused of fraud in its largest takeover.

A separate complaint over the 2015 deal to buy an Indian payments business for €326m, just weeks after it changed hands for €36m, is being examined by Munich prosecutors. 

Tuesday’s hearing came as the high-flying technology group prepares to release delayed full-year results on Thursday. The Dax-30 member faces legal and regulatory questions after a KPMG special audit failed to resolve whistleblower claims of large-scale accounting fraud. 

That special audit was unable to identify the beneficial owners of a Mauritius fund central to the allegations in the UK civil action. In September 2015, the fund paid €36m for Hermes, an Indian payments business. The following month Hermes was sold to Wirecard for €326m. 

Former minority shareholders in Hermes, who sold their shares at the lower valuation, allege the back-to-back sales involved a conspiracy to defraud them, and have asked for a full civil trial. Stephen Midwinter QC, acting for the claimants, said “to put it simply, there is something about this transaction that does not add up. It is deeply suspicious”.

Wirecard has denied any wrongdoing. Jeffrey Chapman QC, acting for the company, said the claims were “hyperbole” and the “case is just tissue thin because it does not have any documentary foundation for it”. 

Wirecard’s position is that Hermes was sold by its founders to the Mauritius Fund, Emerging Markets Investment Fund 1A, which stripped out the travel operations of Hermes and so made the company an attractive takeover target when bundled together with two small, related payments businesses. It has said it does not know the identity of the beneficial owners of the fund.

“EMIF was represented by Linklaters, who we can assume made the necessary enquiries,” Mr Chapman said.

The former investors have also sued Hermes’ founders and their advisors. Their claim against the Indian founders was dismissed on jurisdictional grounds last year. Litigation against the advisors, who have denied any fraudulent conduct, continues. 

Wirecard’s evidence contradicts statements made by the defendants in those suits, the claimants allege. Speaking in the online hearing on Tuesday, Mr Midwinter said the documents formulating the two sales were negotiated in parallel, and “there are serious disputed questions of fact about what the defendant did, about what it knew, and when”. 

Mr Chapman said: “Wirecard executives are truthful men who have signed witness statements.” 

One of those executives was Jan Marsalek, Wirecard’s chief operating officer, who negotiated the Indian takeover. He is also one of four senior executives under investigation by Munich prosecutors on suspicions of market manipulation in relation to statements made by the company ahead of publication of KPMG’s report. They have all denied any wrongdoing. 

Sir Ross Cranston, the High Court judge hearing Wirecard’s application to dismiss the suit, said the parties could expect his decision in the next two weeks.